Wow. Someone actually didn't like what I had to say. Tried to warn you.
Chesapeake Energy (CHK), a Williams Cos. customer, has reportedly hired lawyers to help restructure a $9.8 billion debt load.
I agree. Was listening to recent weekly Podcast, 2-1-16, by Tortoise Capital Advisors, which is a leading player in energy investing. Basically stated that Mr. Market is rewarding discipline in cutting spending even if net results in lower future growth. I personally wouldn't mind a 50% divy cut and 10-20% Capex cut (just suspending projects until better environment).
They need to do something quickly or this deal won't happen anyway if this stock is like at 3-4 dollars. Can't see WMB voting on a merger with ETE at 3-4, unless Management wants WMB to back out without losing the upfront money. Probably could get a better deal by waiting a little longer. GLTA
It is all about uncertainty. Mr. Market is punishing ETE about that. KMI has had it earnings and provided guidance and plans on what is being done to cope with low oil. ETE has not. Plus, alot of uncertainty about the merger. Typical Wall Street movie. Spread fear while shorting and covering at much lower prices.
R U aware that as of last earnings, only 18% of roughly 10.6 billion in revenue came from crude sales. The other % came from NG/LNG sales, refined products, etc. They have a downstream network of refined products pipelines and retail gasoline stations that offer a counter-cyclical offset by benefiting from lower oil and gas prices. Like XOM and Chevron do.
There is roughly about a 2 million barrels a day oversupply problem. US alone produces about 9 million barrels a day. I doubt the US will be the only country cutting and that all the oil being cut is flowing through ETEs pipelines. ETE can easily have capex cut or sell nonproducing assets if needed.
Avoid those MLPs which pay IDRs (Incentive Distribution Payments) to their general partner. This diabolical invention allows the general partner to skim off as much as 50% of the partnership's cash flow. Follow the insiders