But for those that have been investors in various Atlas entities for a while - we've seen this play before. This has the look and feel of 2008 all over again. Just keep in mind that in 2008 we lucked out with our Marcellus holdings. I don't see another pot of gold at the end of this rainbow.
In 2008 it was screwing up the hedges twice - the second move from a panic at the worst possible time. That cost us two operating systems sold for about 400 million in 2009 - today those would be worth more than double (not to mention the cash flow).
Sort of similar today - buying two oil acquisitions at the top - not properly hedging that production (claiming we were being "counter cyclical" or something to that effect). Now borrowing from a BCD to stay afloat. And basically praying that energy prices rebound. It certainly appears every producer is playing the same game - drill only your best - production still increases - and everyone is at the ready to boost it even more when the expected rebound happens..... which just ensures there won't be a rebound.
Who knows, maybe some of our land will turn out to hold gold!!! And we'll become gold miners. But short of that type of luck, this may be just the early part of the decline. I hope otherwise, but all new holders should educate themselves to what has happened here previously.
Yes I've received mine. If your having problems with the website might be worth a call. It should be available to you - and if you ever lost the hard copy or wanted to reference it while away from home its convenient to be able to pull up.
This is similar to an convertible they issued in 2009 for APL and was mysteriously bought by an unknown equity fund. Owners were not offered the ability to participate (I called and asked to). It was an outright give away and I'm sure Cohen or his family benefited greatly. If I recall correctly the conversion price was something like 6.50 and when issued the units were trading at $8.50!!!
Its just more of the same and the longer your an owner the more you'll shake your head.
Personally, if oil/NG remain depressed I think we could see this new Atlas get down to the $2-$3 range. There is little reason to believe that operations will improve to the point that the IDR's hold great value. Given the recent performance and sale of APL, I would expect this should yield over 10% in exchange for the executive office risk.
But, they expect MORE production next year from those 7 rigs!
For those that bet on SD I'd say you have to feel good about their ability to lower costs and increase efficiency.
Good news for ARP that we got the covenants changed, though basically lost our liquidity along with it. Not a huge fan of borrowing from a BCD but I guess that was all that is left. Kind of concerning to hear that we borrow 250 MM and then have liquidity of 225MM - means we were in dire straits.
Best news I've heard lately though is that Nigeria is agitating for an earlier OPEC meeting. Means that they are really feeling the pain of lower prices. Though I don't expect an early meeting, there is a possibility that perhaps in June OPEC announces small cuts or perhaps commits to a freeze of current production for next year.