It is unfortunate to see people still viewing ARP as a long term viable investment. If OPEC doesn't restrain production, which is doubtful, then sub $1 is on the way.
Nat gas is selling for $2.15 and $2.20 in Jan, Feb, the heating season. ARP will destroy value with the EF drilling and the rest of the asset base will decline naturally, 5% or whatever. Grim outlook.
What's the value of ARP with no dist, it's zero minus, nothing has changed. And if OPEC continues the same policy, it will bankrupt all of the high debt e and p cos, all of the e and p MLPs. OIl and gas will recover but not in time for all but the cos with the best assets and low debt, ARP doesn't cut it. The yield chasers will get 20% returns, 75 cents unit price, for a while until that stops. The answer was simple before and there is more clarity now.
ARP has lost 2/3 of its value and the chief turkey is still mumbling to himself with his many aliases. Oil could be in $50s for a couple of years, gas about where it is, and ARP and the rest of the MLP sector will be history. ARP's EF wells at $50 don't come close to being profitable, and they are spending several million dollars a month on that asset. They should be ceasing drilling and buying back debt and hoping to survive. Nothing has changed, Eddie is marching into the ground.
ARP at avg $45 oil for next year doesn't have a well they can drill that will be profitable, 500b/d IPs won't cut it. And they are drilling an EF well every 12 days or so, they are destroying value with every well drilled. Those 2.5 wells per month cost $18 mm per month, $200 mm a year. And the bank revolver has maybe a $100 mm left. And nat gas avg is $2.50 next year. ATLS should be 50 cents now but everyone is waiting for the merger which props ATLS to the detriment of ARP. The day of reckoning is sooner than you think.
$1.20s, ouch. OPEC announcement of full speed ahead for oil production, the headline won't be well received, sub $1 unit price. There's not a $60 oil price on the strip that runs well into next decade. Winter nat gas five years out low $3s. Not a great environment for a highly leveraged nat gas co with inferior, high cost oil assets, 20% returns are imaginary at $40s oil. Drill partnerships, who would buy them today through the end of the year, guess some of the bulls on this board would.
The turkeys have lost 50% plus in a couple of weeks and they are as arrogant as ever. For an investment that was like money in the bank. The 10% yield will go to zero with the merger of ATLS and ARP. ARP will pay a premium for ATLS, ouch, for all of those EF assets. Wonder how that $150mm of drill partnerships is going.
I haven't noticed any wisdom from you except insults to others, you are in good company with the turkeys on this board. Can understand why you are testy, continuing to be arrogant is harder to explain. ARP equity value is negative at the strip but I'm sure you have the right forecast for oil at $100 next year. This is going to 50 cents and you all can continue to think it's a great investment, turkey.
Amazing how you turkeys used the Cooperman ownership as proof of investment value. He knows as much about e and p as most posters on this board, nothing.
You turkeys are living in fantasy land, the whole e and p MLP sector will be history in the next couple of years. OIl gets back to $60s and gas is still at $3. Not going to cut it. Next step is merging ATLS and ARP and eliminating the dist. And then a slow burn to bankruptcy as Eddie drills his EF wells. Sub $1 unit prices on the way.
Most don't see it but the whole group will go to zero distributions and will never recover. Those that don't bk will convert to c corps and will be forgotten. Just a matter of time. They don't work in the new price environment. $60 could be the oil price for years and $3 gas. Even LNG won't do much as the globe will probably be oversupplied.
He knows nothing about the company, the claims of bankruptcy. Some time ago, he mentioned that First Reserve had lost money and was going to sue the company, not likely as First Reserve is the General Partner. If he made any money, just dumb luck. Just put him on ignore, I'm sure we will hear that he was long when it goes up. Just a blow hard.
Saw a CS comment that in current interest rate environment, an MLP with no grow should be yielding 8.5%, at that yield, it's a $65 unit value. But there are lots of values in the MLP space right now. Clearly, $20 is too low. Interesting comments in the release today, that investors didn't understand that the dist would be adjusted by 10x, guess lots expected the dist to remain at 55 cents. I am always amazed at how little investors know about what they are investing in. I'm viewing it as an opp. Plus the coverage is skinny. And the macro price env is still on the mend. Saw another comment that the US will have to increase vols by a million bs in 17 and more in the years following. Not sure the equilibrium price but the midstream just need decent volume growth to do well. They seem to be valued assuming a shrinking sector.
Cooperman pushed for that on the last cc and Eddie pushed back, implying that the EF wells are a better use of capital. And Eddie needs the EF for his AGP but you are right buying back debt is no brainer for ARP alone but they need to support ATLS/AGP. The dist should have been eliminated. And merging, Cooperman and ATLS plus Cooperman, Carlyle and insiders own close to 40%. Not sure there are enough retail outside of the funds to even begin to influence the vote, and Cooperman owns both so he'll go along or sell out. Which he probably wishes he had done.
They are out of touch with reality, have been and still are. Not sure they are capable of getting there even with the facts staring them down. ARP's future is the EF and they are doing it primarily for ATLS, to save Eddie's AGP bet. ARP holders better hope that the wells are good, the first couple seemed mediocre at best, more like awful IPs for a $7mm dollar well. EOG is getting multiples of 500 b/d on their assets, some 4000kb/d. At 500b/d, not even sure they are profitable. The future doesn't look rosy.
He always makes money after the fact. Has been claiming bk for a while. Just ignore. This may be one of those values that is too good to be true. But they do need comm prices and volumes to increase. Probably a level dist for a couple of years at best. But how do you value $5.50, 20% at the high end, $28 and probably 12% on the high, $45. Not much downside unless the macro tanks. Don't think OPEC is going to give any relief, probably restate their market share goals.
You can't even divide the annual dist to get to the monthly and had a great scheme at $3.10, saying the dist was like bank interest. And it was almost eliminated, great call. 15/12 is what?
Buyers beware listening the bulls on this board. It's an option on survival, today I would bet they crater based on expected comm prices. A bump in oil today won't last.