Williams e and p new MLP, the market seems to like the move. DNR missed opp? I think we may see more of these, e and ps forming MLPs for mature assets, you can get a value increase with the move, and also capital for growth. Still seems DNR was a great fit for the MLP.
WPX Energy Inc.'s shares jumped in extended trading Thursday after the oil and gas company said that it is forming a new master limited partnership and will offer the public a chance to invest in it. The partnership, to be called WPX Energy Partners LP, will be formed in the first half of 2014. It will hold the company's interests in natural gas properties in the Piceance Basin in Colorado.
jwo, just saw an analyst revision for SD, 41 cents eps next year, that's a 15x pe, not bad for a rapidly growing e and p co, I think the market is not appreciating the SD progress, the CEO said as much on the cc. Like MPO, a sale of offshore or another JV would help. The ghost of Ward is still affecting the stock?
Another value marker, not sure we need anymore, but WPX, Williams e and p, forming an MLP. Analyst mentions it raises value for Piceance gas volumes moved to MLP from 6.5x to 7x multiple, comps for other MLPs, and it's gas primarily. MPO is less than 6x right now. Crum mentioned 3.5x debt/ebtida, backing into ebitda, they could be targeting $550mm+. Again, a rough number, but they all point to a bigger stock price. Oil back at $100 would help too. Double digits next year.
Agree, SD seems like a good bet, not the same upside, but again not the same debt hole. With Cooperman and the other private equity groups in control, the CEO is focused on a couple of year realization of value. And the CEO seems competent. With SD, I think I would be cashing in at $10 or thereabouts. But who knows, their acreage could have other potential beyond the upper Miss.
jwo, I've wonder that also. I just did this exercise to show that it can be done, value realized, not going to be easy but is doable. I think we are really investing along with the private equity capital in a public vehicle, the same way big money would in a private deal. They would do the same thing, build the production with the use of a lot of debt and take it public in a couple of years. I think what happened is they stumbled with MPO out of the IPO block and had to add the two acquisitions to salvage their initial investment, they could have taken MPO private before those deals, so maybe won't happen now, who knows. They could still buy it out at a premium and do the same thing, not sure we could do anything about it except take our $9 now and miss out on the upside. No one else can buy it without the agreement of the current private equity owners.
didn't print all, just a comment that if they can execute on the well inventory at the type curves they expect, the story is plausible to see a $20 stock in a couple of years, and they have grown into the debt, the LA sale would help. How much would you pay for 6k b'd and 100k+ acres are whatever it is. At the beginning, don't remember the value but the whole co was the LA asset.
If they could get $600mm for LA, they could fund the capex to the end of '14 and reduce debt a couple hundred million. They weren't going to drill any LA this quarter, the growth would come from the mid cont. Assume 45kboe/d prod end of '14 at $70k per b, you would have an $18 stock after the conversion of the pref shares, 100 mm shares roughly, $1.8 billion market cap and $1.3 billion in debt, little over 40% debt to EV, a very respectable number. And still growing, end year end 15 at 55k boe plus, and a $24 stock,
Cooperman stake for SD 9/30, up to 7%. Implications for MPO? Does shine a light on the Miss.
SandRidge Energy (NYSE: SD) raised from 29,258,509 shares to 34,256,163 shares
Cooperman's 9/30 stake, if he held it through the "plan" probably not too pleased. Wonder if an activist gets involved, seems you could move it to the $20s fairly easily. Not much downside.
Denbury Resources, Inc. (NYSE: DNR) raised from 3,570,227 shares to 4,917,727 shares
Devon, another idea that's better than DNR. Higher div yield, and better growth. Just saw an analyst NAV calculation of $106, $60 price currently. Barron's just had an article, cheapest oil play, believe they are being valued at 3.5x ebitda.
WMB owns 50% of the ACMP gp and units. Some think they buy the rest of the GP soon, whether it is merged with WPZ? WMB does, will own it.
Good post me2. QEP is involved in an activist skirmish, analyst compares 14 ebitda of "gassy peers" multiple of 6.5x to 7x. QEP is 71% gas. Pick your best shot at MPO '14 ebitda and apply the 6.5x, you come up with a price which is a multiple of the current price, and apply your debt discount. Or use q3 ebitda at 6.5x. A double digit value in any scenario if they execute and seems they did in q3, could say ahead of plan. It's a matter of time.
As for evolving plays and smaller cos, the issues with MPO are the same, it's just the nature of the e and p business, it's not widgets. But the debt does magnify the uncertainty. And as Crum said about other intervals, he is just trying to maximize the value of the upper Miss, and now the targets in the Anadarko, which are still early in the process, but so far, are exceeding expectations, above the high end of the type cure. He led the release with ebitda. I would doubt that they spend anything on other targets in the Miss, and also not much on LA. If Devon proves something else to be attractive, then MPO will get a read through boost in value. Same could happen in the Andarko, as Crum said, benefiting form other cos r and d.
Don't know exactly but they are drilling I think it was 40 wells this q. 160 next year, pick an average for the year 350b on 80 wells, 28kb/d, end 13 at 36, decline to 24 plus 28, 52kb/d end of '14. Needless to say rough and probably overstated, and assumes they spend as much next year, and can borrow. Sure someone else has run the numbers. That seems too big and it may be.
A couple of positive reports and we could move to the $7s. At least the sector behaved better today. Lessen the liquidity issues with a good LA JV and up a couple of dollars.. And then a 10 million sh equity raise in double digits get you through 14 into 15. Good well results will overcome a lot, and a healthy oil price. Lots of traders will still be looking at the 3000k wells in the Permian, EF, Utica.... Can't compete with that attraction.
SU would be a better choice, double the yield and much better growth than the 8% DNR is projecting.
If you want one of the top midstream cos for the next several years, MWE stumbled some this q, down 10% today, but the outlook for the next few years looks great. Could do $5 dist in '16, at 3% yield, $167 per unit, $68 today. It is an MLP with k1 complexity. Also could end up with someone else.
Could be good for BCEI, they will let SWN do the r and d. Everything Permian looks good today, guess it's the PXD report. AREX, LPI, FANG, ATHL...
A recent vertical test in the Lower Smackover Brown Dense in southern Arkansas and northern Louisiana suggests the play could evolve to commerciality. Southwestern announced its first economic well, Sharp 22-22-1#1, which commenced at a peak 24-hour production rate of 600 b/d of condensate and 1.3 MMcf/d of
gas. While these results are encouraging, it is too early to gauge the valuation impact of the Brown Dense.