Curious that the IPs reported to TX RRC for the two EF wells tested mid October were averaged 463 boe/d and 542boe/d 24 hour IP. EOG had a 1500 boe/d test in the same county in October, and has had 3000 and 4000 b/d IPs in the EF. No wonder ARP didn't highlight those wells, kind of mediocre for $7mm cost wells. And the comments from Herz make no sense, 3600 boe/d avg when the IPs were 500b/d.
Also noticed that added FBR to the at the market sale of pref stock, good luck selling that. Didn't FBR have a $7 target that someone used to justify the value, I'm sure FBR isn't conflicted by the sale of the preferred's.
I would question that those EF wells are returning 20% with those IPs, stay tuned. Curious that they didn't talk specifics about the wells. Guarantee that if they had a 3000b/d well, it would have been the headline.
All they have is the EF and so far looks questionable to me, can provide tax deductions, they're good at that.
During the third quarter, Atlas drilled and completed its first three Eagle Ford wells. Those wells are producing an average of 3,573 barrels of oil per day, and an average of 313,000 cubic feet of natural gas per day, Herz noted during the earnings call, adding that the company has "shifted entirely to the Eagle Ford."
Here's one of the tough questions asked by the FBR analyst and Eddie's answer, what a funny guy, downplayint that Herz said it is likely the dist will be adjusted. The second tough question was about the revolver and Eddie said there would be substantial relaxation. Not one question about the EF wells which are the company now. And FBR added to the ATM pref stock program after the call, hmmm? Wake up turkeys. Sell side analysts are worthless. Turkey's can fly but not very far.
Just had a quick question on the adjustments in the distribution policy in the near term. Just curious what kind of targets you’re looking for maybe there to help frame that decision in terms of liquidity, leverage ratios, things like that?
Edward Cohen - Chief Executive Officer, ATLS
Well Sam, to tell you the truth, during this call we received a comment from Alan Greenspan, the recent head of the Federal Reserve, who was critical of Daniel for being too explicit in his comments. Seriously, though, I think Daniel laid out the elements of consideration that will come into play, and he made clear that our board is going to consider this and we will have a statement out on this, if and when any action is taken.
The production mentioned in the interview with Herz, that was production from Rangely and EF combined for the q3, not EF wells. I'm sure they tried to correct the potential misimpression. And the 3573b/d for q3 was down from 3890b/d fron q2 and Rangely was flat. Drilling a couple of wells a month at $7 mm per well, jury is sill out, but doesn't look too bullish to me based on IPs of Oct tested wells.
The truth sometimes is hard to take. Hedge book is the book value, not so good. Commodity price curve is dismal for years, not so good. Dist cut coming, not so good. Debt is huge and still trying to sell preferred stock, terrible. EF wells are the company, the jury still out, questionable imo, not so good. ATLS and AGP a burden, not good. Cohen in control, awful. Bottom line, dismal prospects. Based on LINE $2 value, ARP value is better if they do the right things now. How's that for optimism. Doing it, ???
Remember that FBR selling the pref stock is bullish on ARP, $7 target, no conflicts there?
Don't see how LINE stays out of bankruptcy, the debt trade saves $16mm in interest, still $9 billion of debt. LINE going under should have a chilling effect on the sector. As one commentator said, only a rebound in commodity prices would do it and they have less time than ARP. LINE at $2 is probably a gift, won't last long.
Let's see, would guess that EF wells make 10% at best, can sell to the partnerships. Bonds yielding 20% and equity 50%. Someone explain the economics of that. Doesn't take a genius to see what you do, elim dist, buy back bonds, and sell the EF wells to the partnerships at 10% returns, no drilling for ARP outside the partnerships. Eliminate ATLS, AGP. And Cohen. Not rocket science.
Bondholders for ARP won't give up a dime while the equity owners are getting a $130mm annual payout. The ARP distribution will need to be zero before debt holders give up anything. Pref payouts to zero. Dist needs to be cut now. Low information owners can't see past the 50% yield.
Can't hear you turkey but am sure it's relevant, not. I'm sure we're going to have cold winter. And I've explained ignore to you before, you have to do it. Giving the opposite side of the bullish stance is not a waste of time. Don't be concerned.
Someone present the bullish case for investing in ARP, please, would like to know what value you see in the bet and what your premises are. Based on message topics, all I see is preventing shorts from further sales. Is that it, that's all you have, and an irrational 50% yield? Must not like to hold on to your money.
Looked at other MLPs short interest, BBEP 8 days, LINE 5.5, LNCO 8, LGCY 6, EVEP 5. Your efforts are misguided, why not try doing some research instead. And there are a bunch of e and p s that have even higher ratios. Linn at only 5.5 seems low to me for a #$%$ the verge of bankruptcy, but as I've tried to tell you, you don't short a $2 stock, not much opp. ATLS is at 8, guess that would be a better target given your focus.
jbc, it's a lost cause. You have been exposed to Atlas long enough to know his style. Even without Eddie and doing the right thing now, this is going to be a long slog. Linn is toast unless we get much higher gas and oil next year, sub $3 gas and $50 oil won't do it. Everyone else is hunkering down and it's business as usual for Eddie at ARP, to fund ATLS/AGP. If the drill partnerships don't sell in the next few weeks.
To all of the bullish rhymes with truces, I promise I won't forsake you.
Why don't you spend some time checking out what I posted today and try to refute them. That might cause some questioning or doubt on your part. Don't confuse me with facts. I get it. Or just put me on ignore because I promise to be here again.
Can't hear you rhymes with truce. And by the way the Linn experience is not relevant to ARP, which you don't seem to understand. Maybe you should do some more homework instead of posting so much.