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Enterprise Products Partners L.P. Message Board

harehau 228 posts  |  Last Activity: 23 hours ago Member since: Oct 10, 2006
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  • Reply to

    the market

    by harehau Oct 11, 2014 4:53 PM
    harehau harehau Oct 13, 2014 12:28 PM Flag

    Jerry, if I had money now, would be buying WMB, sitll think it is the best infrastructure bet even after the runup. $3.25 div in '17, 6.5% yield. $3.25 at 4%, $80 stock minimum. 3% yield and you have a double, $100+. The e and ps look cheap but I'd still buy the infrastructure cos, less downside if the slide continues, 75% of WMB's rev is fee based. If the Saudis drive oil down to the $70s, everything will suffer.

  • Reply to

    the market

    by harehau Oct 11, 2014 4:53 PM
    harehau harehau Oct 13, 2014 12:21 PM Flag

    Go to the Targa Resource site and look at the last pres. TRGP is the GP and owns I believe around 11% of the NGLS units. TRGP has a market cap of around $5 billion, no debt and NGLS has a $7 billion market cap, $3 billion of debt, these are before the deal. So the total EV is $15 billion, and now $23 billion or whatever with the ATLS deal. TRGP is a corp, NGLS is a MLP. Like WMB and WPZ. TRGP cash comes from the IDRs from NGLS and the 11% stake but they take 50% of the cash distributed. A leveraged bet on NGLS and now the combined firm. I don't own any, wish I had bought a couple of years ago. But will own some now and will probably hold on to them. Still think they could be bought out. Again, TRGP is like WMB but WMB owns a bigger piece of the MLP, 70% vs 11%. Will need to look at the cc slide today. But they said $2 accretive.

  • Reply to

    the market

    by harehau Oct 11, 2014 4:53 PM
    harehau harehau Oct 13, 2014 11:45 AM Flag

    That TRGP is down doesn't make sense, deal adds $1 to $2 to distribution long term. $3.40+ in '16 plus $2, at 3% yield, $180 stock. I like WMB more but TRGP seems a good bet, they could be taken out, ETE tried, so they would do it for the right price. This seems a good deal for them and makes them more attractive to someone else.

  • Reply to

    O.T. oil stocks

    by cbd0012003 Oct 10, 2014 8:55 PM
    harehau harehau Oct 13, 2014 11:19 AM Flag

    Today feels like a good entry point. BCEI selling for 3x ebitda in 16.

  • Reply to

    the market

    by harehau Oct 11, 2014 4:53 PM
    harehau harehau Oct 13, 2014 11:07 AM Flag

    More accurate value is .18 x $113 TRGP, $20 plus $9 cash plus $15 value new ARP GP, $44. Seems TRGP is a good buy, could be acquired also, KMI?

  • Reply to

    the market

    by harehau Oct 11, 2014 4:53 PM
    harehau harehau Oct 13, 2014 11:05 AM Flag

    Where did you see that. Feels like we are getting close to a bottom. WTI strip is around $83 for few years, and Brent is $90 in Mar 15 and rises from there.

  • Reply to

    takeover

    by crl1603 Oct 13, 2014 9:48 AM
    harehau harehau Oct 13, 2014 9:59 AM Flag

    The new entity. Seems ARP should be yielding 12% at least, $20 per unit. Hoped they would have merged the GP with ARP. At 8% yield, new entity should be $16.

    ATLS' non-midstream interests consist of the following:

    100% general partner interest and incentive distribution rights in its E&P subsidiary, Atlas Resource Partners, L.P. (NYSE: ARP), as well as approximately 25 million ARP units, which includes approximately 3.75 million Class C Preferred Units in ARP;
    80% general partner interest and incentive distribution rights, as well as an 8% limited partner interest, in ATLS' E&P Development Subsidiary;
    16% general partner interest and 12% limited partner interest in Lightfoot Capital Partners, which has a 40% limited partner interest in Arc Logistics Partners LP (NYSE: ARCX), an independent U.S.-based energy logistics service provider; and,
    Net production of approximately 11.5 million cubic feet per day of natural gas production in the Arkoma basin.

    Following the transactions, if all of the non-midstream assets were to be distributed to a single entity, expected initial annual distributions would be $1.25 per unit.

  • Reply to

    Sell the Pop

    by schieboutz Oct 13, 2014 8:21 AM
    harehau harehau Oct 13, 2014 9:29 AM Flag

    You are right, $22 + $9 + $15 to $20 ???= $46 to $51. The new entity, they said pays $1.25, assumed a one for one. The Targa shares should do well, accretion of a dollar for the deal. Could see TRGP bouncing up to $150, that would add $5 to value. Not sure about the ARP investment, but at 15% yield currently, should appreciate. TRGP has been rumored to be a acq target, one of the best co in the sector. Seems hanging on to units is a good bet. Seems we are getting a $50 deal, not great but makes sense, have felt for a while that the two cos should be separated. While I don't have much respect for Cohen, who knows, he might strike gold again with newco/ARP.

    As a result of the transactions, each ATLS common unit will receive: 1) $9.12 in cash, 2) 0.1809 of a share of TRGP common stock, and 3) a pro rata share in 100% of ATLS' distributed non-midstream assets.

  • Reply to

    the market

    by harehau Oct 11, 2014 4:53 PM
    harehau harehau Oct 13, 2014 9:16 AM Flag

    If I did my math right, this ATLS deal is worth $50+. $24 TRGP shares, $12 cash and $15 to $20 in the new entity. It will pay $1.25 dist, at 6% yield for a GP, doesn't feel unreasonable, $21 per share, $57 per share.
    And the shares in TRGP should do well, accretive by a dolllar for TRGP. And ARP and the new entity will focus on e and p. ARP now yields 15%, probably a good value, seems it should be in 10% range.

  • Reply to

    Sell the Pop

    by schieboutz Oct 13, 2014 8:21 AM
    harehau harehau Oct 13, 2014 9:04 AM Flag

    Complicated deal, TRGP shares $24 value, cash $12, plus the new entity, which they say would pay $1.25 per unit. For a e and p GP, not sure there is a comparable out there, today 8% yield, maybe 6% in a better market, $15 to $20. Total value, $51 to $56 value. I think that's in the ball park, anyone refine it more?

  • Reply to

    the market

    by harehau Oct 11, 2014 4:53 PM
    harehau harehau Oct 13, 2014 8:39 AM Flag

    Targa buying Atlas Pipeline and ATLS, excluding the e and p assets. This could be the start of combinations in midstream. E and p values look fairly good today if you believe in $90 oil. Would think there will be combinations there also.

  • Reply to

    O.T. oil stocks

    by cbd0012003 Oct 10, 2014 8:55 PM
    harehau harehau Oct 13, 2014 8:37 AM Flag

    Targa buying Atlas Pipeline and Atlas Energy, excluding the e and p assets. Although in the midstream, would think this helps the sentiment for energy in general. If stock values stay this low, would think there will be more combinations in both infrastructure and e and p.

  • Reply to

    O.T. oil stocks

    by cbd0012003 Oct 10, 2014 8:55 PM
    harehau harehau Oct 12, 2014 8:51 PM Flag

    Current price, comments below, $84 is the same as the long term WTI futures price. Seems that should indicate a leveling of price. Seems now should be a good entry, not saying it won't drop more but mid $80s might be the long term price at a minimum, and with some global strength and dollar stabilizing, think the decline should be over.


    Brent crude’s biggest slump in two years is coming to an end as the most timely measure of supply and demand signals a glut is clearing, Bank of America Corp. says.

    The CHART OF THE DAY shows that Brent, the world’s most-traded oil contract, began to plunge in June as the front-month futures contract erased a premium to the second month and started trading for a discount, indicating a short-term surplus. That discount is contracting now, reflecting that the excess is diminishing and that the price rout should dissipate, the bank estimates.

    “The fact that time-spreads are starting to narrow is an indicator that the supply overhang is starting to clear,” Francisco Blanch, head of commodities research at Bank of America, said by phone from New York on Oct. 7.

    “The downside is going to be somewhat limited, unless the macro turns a lot worse, and there aren’t a lot of reasons to believe the macro is going to turn a lot worse.”

  • Reply to

    O.T. oil stocks

    by cbd0012003 Oct 10, 2014 8:55 PM
    harehau harehau Oct 12, 2014 7:59 PM Flag

    The futures are showing more carnage tomorrow, could be a blow off. Have a feeling it will turn around a bunch, but seems we are in the proverbial falling knife mode. Think you have to have a multiyear view to step in tomorrow. Could be even better e and p values tomorrow. Catching the bottom is not easy. Although you seem to have a feel for bottoms, let us know when you step in. I may chicken out and buy more infrastructure, which is not as commodity price sensitive.

  • Reply to

    O.T. oil stocks

    by cbd0012003 Oct 10, 2014 8:55 PM
    harehau harehau Oct 12, 2014 5:00 PM Flag

    Thanks for the mention on the article, he does good work. Looked at CS values for BCEI and PDCE, both around 4x ev/ebitda for 16 at old price deck, forget what CS was using exactly. Just saw they are at $89 for 15, whol knows. But the 4x multiples was a couple of mos ago when PDCE and BCEI was at $57, now around $42. Seems both are solid bets if you believe this is just a regular correction. I tend to think it is, but could be wrong. Both cos are low debt and great geology. Kind of favor PDCE for the additional op in the Utica but can't argue BCEI's value in the Niobrara. Seems you have a move back to $60 + with stability in oil at around $90. I'm going to watch tomorrow, kind of hope their is a big selloff tomorrow, a buy op? Or if oil keeps falling, could be more pain. Had sold all of PDCE in mid $60s and bought back at $50, thinking that would hold, will see this time. Almost anything in the sector should do well if prices stabilize at $90, I think. Or we could drop more in the short term. That's what makes investing fun.

  • Reply to

    O.T. oil stocks

    by cbd0012003 Oct 10, 2014 8:55 PM
    harehau harehau Oct 12, 2014 3:52 PM Flag

    I ran across SDLP yesterday, looking at MLPs. They were a top pick of WF, target of around $40, now $30. SDRL is the GP of SDLP. Don't know anything about the drillers except that a lot of talk about new rigs, over supply, but the div is monstrous.

  • harehau by harehau Oct 11, 2014 4:53 PM Flag

    Quote from largest bond manager. Williams yields almost 5% on next year's dividend and probably 15% growth for a couple of years after. Still seems equities will do alright considering the T yr note might not get above 3% for a few years. And the Fed shouldn't be a factor, inflation is no where in sight, the dollar and oil are helping. No wage pressure. Seems the infrastructure cos do well even at lower oil prices, the ng infrastructure cos continue to do well even in a low price environment.

    In an interview with Germany's Boersen-Zeitung newspaper, Mather, Chief Investment Officer for U.S. core strategies at Pimco, said: "Even if interest rates gradually increase, with a global portfolio of bonds with the best creditworthiness you can maybe expect a return of about 3 percent in the coming years."

    He said investors could earn a "little more" but not much more with equities.

  • Reply to

    O.T. oil stocks

    by cbd0012003 Oct 10, 2014 8:55 PM
    harehau harehau Oct 11, 2014 3:29 PM Flag

    A bet on one of the leveraged cos makes sense as a speculation to me if you believe $90 oil. EXXI is dirt cheap as well, selling for around 4x ebitda for the current year, high debt though and offshore, 75% oil. Seems MPO should bounce back, maybe HK as well, MHR, EOX. Problem is I'm not sure the oil decline is over but now that the long term strip prices are around the current WTI price, probably a good sign, unless the production overwhelms the system and WTI blows out. The dollar hasn't help the oil price, wonder how much of oil decline is dollar strength, but that could continue also. Seems another $10 oil decline would lower stocks another 20% at least.

  • Reply to

    O.T. oil stocks

    by cbd0012003 Oct 10, 2014 8:55 PM
    harehau harehau Oct 11, 2014 10:52 AM Flag

    cbd, this has been a brutal move down. The strip has been communicating $80 oil for a while and looks like it was right. Trying to look at the supply/demand issues and looks like the world will need 1.3mm/d more next year and the US will increase prod by a million. And China, the emerging world is slowing and not much growth in the developed world. And some of the problem areas have brought prod back, Libya. Almost have to look at the cos assuming $85 Brent and $80 WTI. Saw an analysis that said the sector is 8% undervalued at $80 oil and 60% undervalued at $90. Those numbers show the sensitivity and it's not about the companies. If you believe $90, they are a great buy now, it is settles at $80, it's too early. Seems $80 to $100 should be the long term range. It's a lot easier picking individual cos. We need more global demand. And seems the rest of the world is still deleveraging, lower growth. But it will pass. And the Saudis could move it back to $100 quickly and it was the assumption that they needed $100. I think it's too early to be heroic but Monday could be a great buy opp. I would stick with low debt cos and the best geology. BCEI still seems a good bet.

  • harehau harehau Oct 10, 2014 4:04 PM Flag

    My guess is Monday, the market plunges and either comes back or doesn't. As for energy, place your bets.

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