arclight should really purchase this in the open market as they are its sister co amid. a nice $75 million purchase over the rest of the year would be very smart by them
I just added here significantly. This is silly. The largest part of their cf is propane distribution which should be more or less stable. Shares were 5.38 4 days ago, we'll get back there imo.
You have no idea why it has come back? A few weeks ago it looked as if they had no plan, $350 million of debt was going to come due on an accelerated basis sometime this year that they couldn't pay. Now the bulk of this debt is not due for 5 years, they eliminated on a going forward basis around $75 million of debt, interest costs go down by $7.5 million again approximately and they eliminated most of the strictures on the 2017 remaining debt which takes off lots of the handcuffs they were under. This company has gone from what many people viewed as a sure bk to one that will almost surely survive. Lets see if they can get more bonds swapped by the 11th and results on their new well. Maybe a drilling partnership, lots they can do now to continue to increase the optionality on the upside. The stock is going to go up to reflect that. This remains a dynamic situation that has turned, rather dramatically, for the better imo.
" the Company believes that it will be able to reach a satisfactory agreement "
pretty promising i would say. their lawyers would not let them make that statement if they were not very sure. sounds like this might free them up quite a bit to do something creative.
sxe is a totally different situation in that they made no comment on the strength of their quarter, have more debt, a weaker gp and have hired counsel known for bk situation. azur simply was paying too high a dividend for the current environment and looks a lot healthier than sxe.
that seems to be the key statement here. how many companies in their sector are saying that? as they devote more cash flow to reducing debt the equity will increase in value and its already too low. seems like any selling here will be a great opportunity to add imo if one can hold for a few months. this is a fundamentally healthy situation that was simply paying too high a dividend in this environment.
This takes tremendous pressure off the company in my opinion and was really well executed as I think it will work for both the company and shareholders benefit and for those noteholders who swapped who will now likely recover 100% or more including interest. Now that they have taken a lot of the handcuffs off the 2017 notes, i wonder if they can go into the open market and buy some of the remaining bonds at a discount or what other avenues it opens up for management. Great.
i think ultimately this goes back to a 10% yield or a share price around 18. The other interesting thing to ponder is what happens if growth actually increases and the gp stays supportive which since they are buying $75 million more in stock they will be. The problem with all the analysis lately assuming the end of the o&g world gives no credence for what happens if this is just a cycle low, which given the fact this was precipitated by unilateral saudi action is likely, than what happens when the cycle turns? Amid will be a monster performer on the upside.
Was able to buy both the a's and b's at great prices. if the commons worth anything and i believe the markets showing you it is, these preferreds go back to par.
...also kind of makes me wonder what they were hearing re a potential bid or bidders looking at the company. if they believed a bid was on its way, that would presumably be a good sign for the value here.
This is the key sentence imo "The Gastar Board may terminate the Rights Plan or redeem the rights prior to the time the rights are triggered." Seems like they want the power to negotiate with a buyer rather than have a hostile bidder come in and pack the board or vote and just grab the company.
i sold it over 20 and am rebuying it in here. maybe a little lower but i think we get back to the 20's this year at least once and thats a great return with little downside imo. at some point this company gets bought out. in the meantime they keep rapidly paying back debt and that almost forces the valuation up.
and the markets only down .50 cents after the markets last week and iran it would seem time to cover as the spot month moves to march and we move back up over 30. Naimi and Goldman now squawking bullish! Thats a big change. Short covering ignites a rally to $34 in the next two weeks imo
Not so sure how material the impact will be. 90% of their biz is fee based, the gas strip is not that far off their numbers and this company is primarily gas related, so not sure i agree on any cut, but as you say, if they cut to a $1 shares are still worth 10$.
Sentiment around these mlps will start to normalize as soon as energy price volatility starts to quell and I think thats a given in the next couple months as we are so far into standard deviation in most of these markets. Once Iranian crude starts to flow that hopefully will be the last remaining big negative bogeyman out there for oil.
i really wonder whether they read amids latest presentation which essentially reaffirms the dividend and or considered why the gp is buying 75 million worth of common, but that would require thinking which analysts who recommend at high prices and lower them at cycle bottoms may not be capable of. with the size of the float arclight is buying these shares are, and i realize how hard it is to say this in the intense drumbeat of negativity towards o and g and mlps, amid is as close to a sure big winner as anything can be,. my opinion only, but i would guess arclights and amids management as well