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Energy Transfer Partners, L.P. Message Board

equityboy46 2 posts  |  Last Activity: Aug 4, 2015 2:51 AM Member since: Oct 24, 2001
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  • Reply to

    If hedges in place Why losses

    by d_neely Aug 3, 2015 9:08 PM
    equityboy46 equityboy46 Aug 4, 2015 2:51 AM Flag

    The problem is if you remove the realized hedging gains, there would be negative DCF at last quarter's prices. But today's commodity prices are even lower than those of last quarter. Not only would DCF be negative, but VNR would violate debt covenants with 4 quarters of no hedges and current oil/gas prices.

    Then there is less hedging in 2016 than 2015. In 2017 there are no oil hedges. In 2018 there are no gas hedges. Not to mention, production is probably declining without acquisitions. And making accretive acquisitions with VNR's stock below $10 and VNR in lots of debt is probably impossible.

    To be long VNR, you are betting that oil/gas prices in 2016+ will be much higher than current prices. Higher prices probably happen, but nobody knows if prices will be enough higher fast enough as to justify the current stock price.

  • With WMB in play, I wonder how long it will take for someone to make an offer for CPGX. Especially when you consider CPGX's assets are higher quality than WMB's.

    Sentiment: Strong Buy

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