Don, just caught part of a CNBC report on "fracking" flares in the Bakken, typical, not very informative. Mentioned lawsuits but coudn't figure out whether it's the mineral owners irritated with the loss of royalties from the flared gas or if it were the farmers irritated with looking at the flares, or the environmentalists, if there are any in ND. Assuming 500mmcf/d being flared, that's a loss of around $730mm of revenue annually at $4 gas, 20% of that to mineral owners, not a small number. Guess the economics aren't strong enough to allocate capital to infrastructure, and a long ways from markets.
I've been looking at WNR but will take a look, they should do well, is transitory. Just listened to CNBC piece on cattle prices, a Cattlemen's Assoc guy from TX, thought it was you for a moment, who said the herds are the lowest in 50 years, plus cheap grain prices. But they are building their herds, a couple of years to impact. Have been eating 20 cent per ear corn all summer. Not sure we need to use it as a fuel with the glut of oil we have. Am concerned that e and p will flounder for a while if diffs expand. Still think infrastructure will do well for a couple of years more. They also had a piece on gas flaring in the Bakken as if it was something new. We are over flowing with hydrocarbons, the increase in the rig count in the Permian was amazing.
Saw a note, said the current Permian net back is $73 /b. The horizontal rig count is up to 320 rigs vs 188 last year. And down but still 227 vertical rigs drilling. I still think PAGP might be one of the best bets on the oil explosion in the US, drillers are outrunning the pipes, plants in most areas. DJ Basin, Permian, Appalachia.
Don, listened to the cc. They say Mid Atlantic DC area was the problem. Other areas are ahead of their model. They model 2.3% increase in same store sales, 12 to 13% store openings, eps growth of 25%. Catering expected to add 1 to 1.5% increase in rev. Class of 14 stores are ahead of their model. They think last two quarters are an anomaly. DC area, they suggested that govt spending might be diminishing, could be a cause for the underperformance, not sure about that. Catering should help and online has doubled to 4% of sales. They are building now in Bay area, Orlando and Boston, happy with those areas. Still see 2500 stores. Feels like this could be a good entry to the stock, if they show a same store sales increase this quarter, is up 1.2% through 8/12 and that's half of the quarter. Would think if they can improve on that through the end of the quarter, the stock should rebound. If it deteriorates, will move down.
Don, ate at the NDLS in Boulder, mid afternoon, good traffic. Still think the product is unique and great. Decided today that I will buy more. Need to listen to conf call.
Jerry, KMI was up today, Cramer had a segment on it last night, thinks it is going higher, and it probably will, think it will be $50 by next year. Actually think Williams is a better value, it will do $2.50 div next year at 3% for a GP, mid $80 stock price, 40%+ upside, KMI 20%+. And Williams could do a deal to merge the GP with WPZ, same as KMI did, guess it could go to MLP or to C corp, either way, it would boost the value above $80. Targa has itself up for sale now, will see who steps forward. PAGP should go too. CEQP needs to partner with and e and p co, similar to what Crosstex did, they are trying to now. OKE should go too.
Think you are right, PAGP will end up with someone else, unless they do a big deal at PAA, and they say things are too expensive for that. Should be sector consolidation over the next several months, KMI heightened that reality.
CNBC is breathless about "potential" increases in tensions in Ukraine. The German 10 yr bond is 1% and we are 2.3%, wonder how the market reacts when we fall below 2%. US stocks are the only game on the globe.
Not an accountant, but if you pay estimated equal to last year's liability, no penalty. No sure you would want to do anything until the deal closes.
EXXI They are projecting $1 billion of ebitda at the midpoint of guidance. EV is $4.8 billion if I read it correctly, that's 4.8x. Proved developed reserves are $4.3 billion PV 10. Over $7 billion of proved reserves PV 10. At 6x ebitda, the stock value is $30. And they pay a 2% yield. Not sure they have much credibility but sure seems a cheap company at $16 per share.
Don, I'm trying to decide whether to buy more this a m. Don't quite understand why they aren't getting more traction, I think the product is great, healthy and good variety, the locations I have been to don't seem to be well placed.
Well said. Greed most of the time prevails. Still irritated with all of his talk of taking care of the stock owners. Lip service as usual. Money trumps integrity.
All of Kinder's noise about being aligned with owners was noise, he is out for himself. Seems a travesty what he has done to long time unit holders. The statement that the partnership form was confusing, that shows his disdain for the small investors that have owned for years. He structured the deal for himself. The lesson learned is never buy an MLP that doesn't have the GP embedded. Bag holder is the right description.
Great to hear. I have reached the conclusion with this KMI that Kinder is leaving the LP owners as the bag holders, the deal is a taxable event for holders, and KMI benefits. I think that after all of his talk about treating owners the same, he is doing whats best for him and scruwing the limited partners. I think I have bought my last MLP and not sure I'll keep KMI also. He could have structured it where KMI was merged into KMP but he wouldn't have benefited as much. Such is life. I do think this may signal the end of the run for MLPs over the past decade and a half.
After all the talk about owner alignment, Kinder did what was best for him personally. If you are a long time KMP holder, it is unfortunate. And there's not much you can do about it, the perils of the GP being in control. He kind of did the same thing for the EPB holders, dropping assets to KMP. Seems his reputation was more a smoke screen, that's life. I'm not sure I would keep the KMI shares, might as well cash out if you have to pay the tax.
CS raised KMI target to $49 and said WMB could be $80 with a 3% yield. Could be triple digits in 16 with the div growth they are forecasting. Do think consolidation will happen over the next year. Not convinced that the MLP form will be abandoned.