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Energy Transfer Partners, L.P. Message Board

harehau 422 posts  |  Last Activity: Apr 28, 2016 5:06 PM Member since: Oct 10, 2006
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  • Reply to

    WMB playing hard ball with K Warren

    by pjhatbpi Apr 14, 2016 5:32 PM
    harehau harehau Apr 15, 2016 8:40 AM Flag

    Not so sure. Not a lawyer but if court decides the plan breaches merger agreement, then WMB can refuse to let it come to a vote with no penalty. Since Warren doesn't want merger, wouldn't want to contest it. Problem is he would be in a lawsuit for a period of time for damages. Today, my guess is the deal is dead. If oil retests the $20s, this is not going to be pretty.

  • Reply to

    50% Yielder Is Ripe For The Picking

    by chappaquiddick_ted Apr 14, 2016 9:19 AM
    harehau harehau Apr 14, 2016 9:58 AM Flag

    Amazing to me that people read these SA articles which are mostly a rehash of the company's latest presentation but because some self proclaimed expert publishes it, investors buy it. The question for CEQP is whether they cut dist, the market is betting yes. The co is undervalued even without a dist. The rational decision is to cut the dist a bunch, will see. If the market won't give you a decent valuation, probably left with no choice.

  • harehau harehau Apr 13, 2016 6:28 PM Flag

    At the moment, I'm indifferent. I own a bunch more WMB than ETE and WMB is getting more growth with the merger. The issue is the $6 billion, hard to finance when the cost of equity is teens for ETE. Today, I'm leaning toward it happening. But I'm ok with it folding. ETE has more growth but WMB has some good potential with Transco. The merger won't go through with a law suit hanging which claims breach of contract, WMB won't let it get to a vote. And rising comm prices will only help the deal.

  • harehau harehau Apr 13, 2016 3:42 PM Flag

    Seems ETE is trading as if a dead deal is imminent. Both moving but ETE more than WMB. The rest of the sector is so so. Has something leaked or are the shorts unwinding.

  • harehau harehau Apr 13, 2016 3:37 PM Flag

    He can't make that statement, has to support the merger otherwise risks the penalty payment.

  • harehau harehau Apr 13, 2016 2:45 PM Flag

    My feeling which could be wrong is OPEC is now irrelevant and think most of the market thinks so. The important thing is supply is falling and demand hasn't cratered yet. Saw an analysis today that thinks global surplus is gone next year and their is a call on US production of 400kb/d, price and activity will have to move up to accomplish that. Still see ranges of $40 to $85 oil for next year. I would think it has to get back to $60s and stay there for a while before cos start ramping up. I do think the worst is behind but some are calling for a retest of $20s, that doesn't feel right but who knows, if that happens, the merger would be shaky. Bottom line though is both cos are undervalued currently because of the deal, ETE more than WMB, and I think Warren knows that and that's why he is trying to scuttle the deal. He does seem to be fairly shrewd, not sure I'd vote against him, time will tell, the WMB board is not a match.

  • harehau harehau Apr 13, 2016 2:24 PM Flag

    I was thinking the same thing. Factors, ?, comm prices coming back helps everyone. The CHK development takes that risk off the table, probably forever. The assets still fit together well, but the cash payment when equity still cost teens % still remains. WMB vaue is $22 in deal, probably high $20s on their own merits. ETE should be $15 without the deal, that's 66% apprec potential. WMB apprec potential to high $20s is around 50%. The longer this plays out, more chance of deal going through, that is assuming oil keeps rising. The lawsuit probably works in favor of WMB merging vs owners voting it down. The 50% appreciation in ETE in past few days changes complexion of deal, CHK and oil price did it??? $50 oil and ETE gets to $13, 9% yield, WMB value $28, everyone should be happy. Oll is $75 by end of year, ETE at $18, WMB value at $36. And two years from now, this is all a distant memory. Will wish you had bought more WMB at $12.

  • Reply to

    CHK is rocking and rolling, up 30% last I looked

    by pjhatbpi Apr 12, 2016 12:45 PM
    harehau harehau Apr 12, 2016 3:52 PM Flag

    The CHK bk risk is not a reality. WMB should be $25 on its own. ETE at $14, WMB value is $30. Financing the $6 billion is the issue. ETE is paying less than 6% on the two year commitment. In two years, ETE could be yielding 6% or less. Seems the deal is a coin flip with rising comm prices.

  • Reply to

    CHK borrowing base

    by artist_formerly_known_as_pooch Apr 11, 2016 1:25 PM
    harehau harehau Apr 11, 2016 2:57 PM Flag

    WMB has contracts which specify minimum volumes for gathering and processing, those could be renegotiated in bk. WMB believes there contracts have covenants that run with the land and can't be disposed of. Obviously, not a simple issue but enough to get investors concerned about the $300 mm of ebitda coming from CHK. IMO CHK won't be bk anytime soon and probably never, if prices recover. CHK also has assets they can sell.

  • harehau by harehau Apr 11, 2016 12:49 PM Flag

    CHK amended bank revolver, next redeterm date 6/17, $4 billion capacity. CHK is not going bk any time soon. This lessens the fear of a CHK bk and the risk to the WMB midstream contract. Warren is going to have to pay something to get out of the deal. Not sure how WMB Board recs deal with the conv pref plan in place. And how long that takes to be resolved. And $75 oil by the end of the year. The longer this goes, the more likelihood of a merger. Both cos undervalued, ETE more than WMB.

  • harehau by harehau Apr 11, 2016 11:34 AM Flag

    Looks like the amendment to the revolver gives CHK room, next redeterm date 6/17. The midstream contract is less of an issue. CHK has $4 billion on the revolver and can sell first lien bonds. This should help the ETE deal. The longer this goes, the better for closing the deal.

  • Reply to

    WMB lawsuit against ETE

    by lorisue1 Apr 6, 2016 9:28 AM
    harehau harehau Apr 11, 2016 9:03 AM Flag

    Not so sure, Warren doesn't want it and WMB management doesn't, and some of the Board doesn't. Warren's antics with the conv pref plan could do the trick. Don't see how WMB Board can recommend yes vote with the plan still in place and not sure Warren will agree to end it. Seems the market is betting it won't be completed today. Would bet he has to pay the $500mm that WMB paid WPZ for terminating their deal. And with oil firming, both stocks could continue to move up. Whatever the outcome, I think both are good buys. And the 10 yr T note at 1.75%.

  • harehau by harehau Apr 9, 2016 6:08 PM Flag

    An interview in USA Today, Cornerstone Analytics guy forecasts $85 oil by end of year, my guess which I thought was going to be high was $75. If that we get to $80s, and Warren is forced to merge, it could look like a brilliant move. Timing is everything.

  • harehau harehau Apr 9, 2016 10:42 AM Flag

    Enterprise value is $3.3 billion, $500mm ebitda. 8% interest on $3.3 billion, $265mm, leaves over $200 mm surplus.

  • harehau harehau Apr 8, 2016 4:35 PM Flag

    FR should buy the 77% they don't own. Easy math, at $15 per unit, $800mm cost to get $385 mm of ebitda, 77%. Borrow the $800 at 8%, $64 mm, pay it off little over 2 years. Same would apply to cutting the dist to zip and buying back shares.

  • Reply to

    optimistic case

    by zooplankton200 Apr 8, 2016 8:49 AM
    harehau harehau Apr 8, 2016 12:02 PM Flag

    You guys are still moving deck chairs around on the sinking ship. This will never recover. Will be interesting to watch MLP investors paying tax on debt buy backs with no distribution, at least with ARP, you have a few pennies to pay the tax. This is a disaster.

  • harehau by harehau Apr 8, 2016 11:53 AM Flag

    Clear that the market is not believing the current dist will be sustained or that they think it should be cut. Either way, I guess they could stay the course, moves up after the next dist and the next or they cut and the units go up. Either way, if comm prices are coming back, this is a good long term bet just to get back to something reasonable. They could cut it $2.50 and fund all of the capex this year. $3 remaining dist at 15% yield would be $20. Hard to see how this is not a $20 plus value. We need an analyst or two to move it up. Seems it would be a good trade on the next dist announcement at least.

  • Reply to

    WMB lawsuit against ETE

    by lorisue1 Apr 6, 2016 9:28 AM
    harehau harehau Apr 8, 2016 11:47 AM Flag

    They are on the hook for damages for breaching contract.

  • harehau harehau Apr 8, 2016 10:44 AM Flag

    ETE also liable for damages, who knows what that could be. Best would be for both to mutually agree to a termination but not sure the WMB Board will do that. But don't see how they recommend a positive vote with breach in the balance. They could call off the deal and sue ETE for damages. ETE would probably counter sue for breach. Could end up in court for a while. Today, I would still bet the deal is dead. Will see what else Warren does to discourage the deal. Is hurting both stocks as comm prices seem to be coming around, most thought April would be the turning point.

  • Reply to

    Crude is on fire today ... could bust thru $40

    by pjhatbpi Apr 8, 2016 9:13 AM
    harehau harehau Apr 8, 2016 9:45 AM Flag

    Simplistically, they probably do, helps their inflation need to raise rates and also helps jobs picture.

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