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Energy Transfer Partners, L.P. Message Board

harehau 231 posts  |  Last Activity: 5 hours ago Member since: Oct 10, 2006
  • Reply to

    Free Cash Flow

    by wonwood Oct 15, 2014 9:49 AM
    harehau harehau Oct 15, 2014 10:55 AM Flag

    Looked at CS projection of DNR cash flow, there's not that much free cash. But they show the div increasing to 55c next year, 61c in 16 and 71c in 17. At $12 share price, that's almost 6% yield in 17. They would be generating $1.3 billion in cash and spending $1 billion in capex. And growing prod mid single digits down to low single digits by 17. They were assuming $85 oil so not a bad yield play. And possible upside for oil, today that doesn't seems likely but who knows. If you assume 4% yield in 17, stock would be $18, so you make 50% plus yield. Looks like a good by not great bet.

  • harehau harehau Oct 15, 2014 10:29 AM Flag

    Just looked at Saudi Arabia's GDP $900 billion, heavily oil, a $30 /b drop, $100 to $70, $110 billion less in revenues. My guess is that SA can't afford to dry up US shale production. This could last for a short term but they will blink soon is my guess. They need $100 much more than we do, although energy investors need it also.

  • Reply to

    ARP

    by parkridge77 Oct 13, 2014 5:27 PM
    harehau harehau Oct 15, 2014 10:21 AM Flag

    Good stuff. One factor it seems is what is SA trying to do in the market, are they trying to drive out a bunch of US production. If you believe SA has a couple of million barrels of surplus and they are serious, this could last a long time, but then how much can they endure at $70 oil, pundits have assumed that they need $100. At 10mm b/d, that's $300mm/d, that's $110 billion annually if I did my math right. The GDP of SA is around $900 billion plus. Not sure they can afford $70 oil. This fear that the Saudis will drive out our shale growth is not a reasonable argument. I would bet that they blink soon.

    Saudi Arabia has an oil-based economy with strong government controls over major economic activities. It possesses about 16% of the world's proven petroleum reserves, ranks as the largest exporter of petroleum, and plays a leading role in OPEC. The petroleum sector accounts for roughly 80% of budget revenues, 45% of GDP, and 90% of export earnings.

  • harehau harehau Oct 15, 2014 9:58 AM Flag

    cbd must be buying, BCEI is green. Great value at $90 oil.

  • Reply to

    ARP

    by parkridge77 Oct 13, 2014 5:27 PM
    harehau harehau Oct 15, 2014 9:34 AM Flag

    Going to be an ugly day.

    Jerry, TRGP is up again, seems if you have a couple of year time frame, going to be a good bet. The ATLS deal should add to DCF, not sure why the market isn't giving them more credit.

  • Reply to

    Conference call highlights

    by marklibera Oct 13, 2014 7:56 PM
    harehau harehau Oct 15, 2014 9:32 AM Flag

    Is the growth in spinco, I assume it's the entity with $1.25 DCF initially, going to $1.53 to $1.73 is impressive, at 4% and $1.73, that's $43, that would make the deal worth $79, assuming TRGP at $150. How do they get that growth, ARP? Doesn't seems plausible to me. And I'm somewhat suspicious of Cohen's forecasts, they haven't played out the past couple of years. I don't think you grow ARP with the iDR, so the growth must be coming from the spinco. Any enlightenment would be great.

  • harehau harehau Oct 15, 2014 9:19 AM Flag

    cbd. long term futures in high $70s. Seems the Saudis didn't want $100 oil. Feels like they are trying to curb US activity. Cheniere CEO sees $60, assume that's WTI. Hamm, $70s, almost there. Still think the globe needs $90 oil to supply global demand but who knows short term. I forget sometimes that oil was $10 or thereabouts 15 years ago. And nat gas will be $4 forever. GPOR reported prod this am, beat guidance, 70% gas. There's a bunch oil and gas in this country. Figuring out the long term oil price right now is difficult. If it's $90s, buys now will look great. I think that is the answer, but I'm not smart enough to know, another thought, the Canada oil sands can't make money in the $70s. Most type curves you see show profitability at $80, but it's not that 50% returns you get at $100.

  • Reply to

    ARP

    by parkridge77 Oct 13, 2014 5:27 PM
    harehau harehau Oct 15, 2014 9:04 AM Flag

    Have tried to imagine a black swan event and something like ebola wasn't on the screen. The Saudis could turn this around in a heartbeat. Also, seems moving to exports quickly might be an outcome.

  • Reply to

    ARP

    by parkridge77 Oct 13, 2014 5:27 PM
    harehau harehau Oct 15, 2014 9:01 AM Flag

    That is a wild card, the fear.

    Park, GPOR reported production, seems they should be a winner in the Utica, whether we need more gas is questionable.

    Gulfport produced oil and natural gas sales volumes of 3,894,511 barrels of oil equivalent ("BOE"), or 42,332 barrels of oil equivalent per day ("BOEPD") during the quarter ended September 30, 2014, compared to the company's previously estimated guidance of 40,000 BOEPD.

    For the third quarter of 2014, Gulfport's production mix was approximately 71% natural gas and 29% oil and natural gas liquids. Net production for the third quarter of 2014 by region was 3,507,325 BOE in the Utica Shale, 372,374 BOE in Southern Louisiana and an aggregate of 14,812 BOE in the Bakken, Niobrara and other areas.

  • Reply to

    ARP

    by parkridge77 Oct 13, 2014 5:27 PM
    harehau harehau Oct 15, 2014 8:16 AM Flag

    Long term oil futures in high $70s. Where's the bottom.

  • Reply to

    Conference call highlights

    by marklibera Oct 13, 2014 7:56 PM
    harehau harehau Oct 14, 2014 11:22 AM Flag

    Not that pleased with the deal but considering entry in single digits and my lack of confidence in Cohen, this is a good result, even with the tax hit. Targa is a great co. Analysts think TRGP value is $150 to $180, which pushes the value to $60. Not sure we were going to get there soon absent the deal. They need to merge the GP with ARP and grow the entity, not going to happen without the merger.

  • Reply to

    ARP

    by parkridge77 Oct 13, 2014 5:27 PM
    harehau harehau Oct 14, 2014 11:08 AM Flag

    AREX comments, admittedly undervalued. That's a big differential to other operators. And AREX is not highy leveraged. So much for value investing. For E and P, seems momentum has been the game, will see if it continues.

    Their 2014 production thus far has been admirable and above original guidance. But despite the better production, the stock is down ~40% on the year, underperforming the EPX and Permian peers by a substantial margin. AREX continues to trade at a substantial discount to its Permian peers on ’15 EV/DACF (3.7x vs the peer group at 6.6x (FANG, XEC, CXO, LPI)). We continue to favor others names within the Permian basin even with the company’s discounted valuation in mind.

  • Reply to

    ARP

    by parkridge77 Oct 13, 2014 5:27 PM
    harehau harehau Oct 14, 2014 10:54 AM Flag

    This was spun from FANG, royalty on FANG's properties. VNOM is selling for $17. This could be a decent yield play on Permian activity, FANG is a good operator. The return now is over 100% to target.

    In the report, Wunderlich Securities noted, “In our view, the selling of Viper Energy Partners (VNOM) is simply
    overdone and now presents a compelling valuation. The stock has been harshly punished for not having any hedge protection against commodity price fluctuations. We believe a 10% change in oil price should impact its DCF by 10%, but VNOM stocks are down 32% since its peak in June while WTI is down just 15% over the same period. Although we are raising the discount rate to capture the increased perceived risk in the commodity price and basin differentials, which lowers our price target from $41 to $37, at the current stock price, VNOM has over 60% total return potential and offers a very attractive risk reward opportunity for investors, in our view. We maintain our Buy rating.”

  • Reply to

    ARP

    by parkridge77 Oct 13, 2014 5:27 PM
    harehau harehau Oct 14, 2014 10:38 AM Flag

    Same here, out of bullets. Energy investing was easy when oil went from $10 to $100 and gas to double digits. Now a $10 swing moves the values 30% or whatever. The lesson I have learned is don't ignore the long term futures strip that was saying oil would be in the $80s longer term, turned out to be right. We have a weak globe, a strong dollar and the shales increasing production a million b/d. The increase in supply won't be as much with $80 oil. If I had funds, would be buying WMB, PAGP, TRGP and KMI.

  • Reply to

    ARP

    by parkridge77 Oct 13, 2014 5:27 PM
    harehau harehau Oct 14, 2014 9:06 AM Flag

    Birdog, looked at AREX, don't own any currently. But they are around $725mm ev, 140k acres in Permian, $5k per acre, 2000k well inventory. They show 20% return at $80 oil. Current prod is around 14k/d, $50k per barrel/d. Not the best geology, the So basin vs the No basin, but cheap if oil snaps back.

  • Reply to

    ARP

    by parkridge77 Oct 13, 2014 5:27 PM
    harehau harehau Oct 14, 2014 8:44 AM Flag

    GDP at $7 assumes the TMS isn't viable, could be. HK shows profitable wells at $12mm and $80 oil. But read some that think the Saudis will let the price fall to the $70s. EXXI is selling for 4x ev/dbitda for this year. WLL great value assuming oil stabilizes at $90.

    Jerry, saw a couple of analysts, all calling for TRGP at $150 to $180.

    Feels like yesterday was a bottom, who knows.

  • Reply to

    Per Targa

    by jbcguy Oct 13, 2014 2:32 PM
    harehau harehau Oct 14, 2014 12:10 AM Flag

    Agree, if they don't do that, ARP will be hard pressed to have much growth. Seems they would have announced that with this deal. Maybe they are waiting for ARP to recover some, seems $20 should be minimum value.

  • Reply to

    ARP

    by parkridge77 Oct 13, 2014 5:27 PM
    harehau harehau Oct 13, 2014 8:51 PM Flag

    Didn't listen to the cc but others mentioned that they are looking at ways to improve ARP value including a sale.

  • Reply to

    Anyone figure out exactly how much we get?

    by davidbdc2001 Oct 13, 2014 8:31 AM
    harehau harehau Oct 13, 2014 6:11 PM Flag

    Value is $109 x .18, $20 + $9 cash + new e and p GP, $1.25/6%, $21, $50 value. And TRGP is probably a $150 value next year, another $7. Not pleased with the taxable event but had become concerned about Cohen.

  • Reply to

    ARP

    by parkridge77 Oct 13, 2014 5:27 PM
    harehau harehau Oct 13, 2014 6:05 PM Flag

    Park, good to hear from you. The problem I have with ARP is there still is a GP, the new entity being spun from ATLS, for that reason, I wouldn't buy anymore, will keep what I have, think they are a $20 to $24 value. Some of the other values are ridiculous. GDP is $7, was $30 but I'm not sure about the TMS play. But at that price, almost assumes TMS is not viable. CRZO is a well run co. I almost bought some PAGP today. Still think WMB is the best bet in the infrastructure sector. GPOR has good assets in the Utica. The problem with the whole sector is no one knows where the oil price will settle. I tend to think we are there but who knows. I'm fully invested but if I had new money, would buy WMB first, PAGP. WPZ, WMB's LP, 75% of revenue is fee based. Report back on what's up with China, has had an effect on oil price. EXXI is a $7 stock and ev/ebitda multiple is now 4x for the current year, ridiculous value, 75% oil. You could almost buy anything at these values if oil moves back to the $90s.

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