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Linn Energy, LLC Message Board

jim_hairball 12 posts  |  Last Activity: Apr 26, 2016 12:33 PM Member since: Aug 4, 1999
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  • jim_hairball by jim_hairball Apr 26, 2016 12:33 PM Flag

     Key Takeaways. On 4/21/16, NGL announced a series of de-leveraging
    initiatives which we view as positive. These include (1) a $200MM private
    placement of 10.75% convertible preferred units to Oaktree Capital Management,
    L.P., (2) a temporary reduction in its distribution (annualized) by 39% to $1.56
    (i.e., savings of $170MM/year); and (3) approximately $100MM of debt
    repurchases at $0.60/dollar. Including proceeds from the sale of GP and LP
    ownership interests in TLP (~$462MM) and the de-consolidation of TLP debt, we
    expect total potential debt reduction of $1.2B from these initiatives. We estimate
    FY2017 (ending March 2018) and FY2018 leverage of 3.4x and 3.1x, respectively,
    (versus current leverage of 3.8x, as calculated by lenders) and distribution
    coverage of 1.73x and 1.77x, respectively. We are raising our valuation range to
    $15-17/unit from $10-13/unit to reflect a shift in our valuation methodology to a
    (yield based) distribution discount model (from sum of the parts previously) as
    we view the revised distribution as more sustainable. We maintain our
    Outperform rating. We are also raising our FY2016 and FY2017 DCF/unit
    estimates to $2.15 and $2.70, respectively, from $2.10 and $2.53.

  • Reply to

    Other low cost E&P's like MCEP?

    by twfry_2001 Apr 7, 2016 1:13 PM
    jim_hairball jim_hairball Apr 7, 2016 1:48 PM Flag

    well took my loses and sold out of MCEP....good luck to those that stay in

  • Reply to

    Is there a merger or acquisition coming?

    by rahdbob3 Apr 1, 2016 3:12 PM
    jim_hairball jim_hairball Apr 1, 2016 5:58 PM Flag

    "Just read up on going private. They would have to offer prices substantially higher than the market."

    Hardly, All Yorktown has to do, is to offer a price that the unit-holders are willing to sell for. I owned the old KMI years ago when it was taken out via a LBO....the recent run-up in MCEP is a premium price for recent unit-holders, don't except the a LBO to buy MCEP at $3.00 or that price level Yorktown would have no interest at today's Oil Prices...IMHO

  • Reply to

    Is there a merger or acquisition coming?

    by rahdbob3 Apr 1, 2016 3:12 PM
    jim_hairball jim_hairball Apr 1, 2016 4:21 PM Flag

    Merger??? other upstream MLP is worth merging with.
    Acquisition??? oil company buys old properties that an upstream MLP has.
    LBO (leverage buy out)???Maybe...Yorktown taking the company private and don't have to bother with individual unit-holders anymore
    Just My Humble Opinion..selling off my stake in MCEP as prices rise...sold at $2.03 & $2.11...still own a few shares

  • Reply to

    New executive

    by hyung.lee31 Mar 30, 2016 2:26 PM
    jim_hairball jim_hairball Mar 31, 2016 3:06 PM Flag

    What gives...all of a sudden someone wants to buy this...big jump in the last hour...still own a few shares...praying for a good outcome....of course praying for a good outcome is not what investing is my stake in MCEP is 2% of my investment portfolio.

  • Reply to

    MCEP Short Interest

    by geographic01 Mar 1, 2016 4:20 PM
    jim_hairball jim_hairball Mar 3, 2016 10:53 AM Flag

    "MCEP is my largest holding."
    Well if I had $50,000 in MCEP, and I tried to sell it all in one day, then I would be the biggest seller for the day...that is too much for me...therefore MCEP is NOT my largest holding, more like a small percentage, so if it does have a massive dilution and current existing equity holders are wiped would not hurt me that much...KMI is my largest holding, owed the old KMR for many years...BUT I am all for MCEP soaring higher,

  • jim_hairball jim_hairball Feb 20, 2016 4:09 PM Flag

    MEP management are EEP what the bosses at EEP tell them to do...don't say anything about what EEP is committed to via distribution support or debt support....even through EEP is 100% committed to do so or face lawsuits for breaking contacts for supporting MEP...If EEP wanted to just do away with the whole MEP mess, best to talk down the shares price and then buy them Back for less then 25 cents on the dollar that EEP sold them for...EEP does own 48% of is their baby

  • jim_hairball jim_hairball Feb 18, 2016 7:55 PM Flag

    One thinks that EEP should just buy back the 50% of this MLP that they don't already own

  • jim_hairball by jim_hairball Feb 17, 2016 11:01 AM Flag

    at the 16 minute mark, "July 2015 the then declared distribution" maintain 1.0 coverage thur 2017
    Q & A part...using Enbridge as a cover to not answer questions about fixing debt & leverage issues...reduce cost structure...then question about how weather affects volumes...then Questions about DISTRIBUTION policy, answer was nonsense gibberish about 1.0 coverage in 4th Q was good...question about operations and volumes(slowing down)...question about growth cap. exp in 2016(manage them)...question about volumes for 2016, (off 10-15% answer, Andarko is were the slow down is seen, production fall off thur the year), ....key driver of guidance is volumes ..leverage concern debt to ebita levels again was deferred to Enbrigde and not answered, and the banks were not talked to about covenants

  • Reply to

    well fargo

    by jim_hairball Feb 16, 2016 10:24 AM
    jim_hairball jim_hairball Feb 16, 2016 10:32 AM Flag

    Our model assumes a step change increase in the annual payout to $2.11 per unit in 2018 after leverage returns to management’s long-term target. As a reminder, management targets leverage in the range of 2.75-3.25x...We project leverage of 3.2x in 2018. Following the assumed increase in NGL’s distribution, we expect the partnership to maintain a coverage ratio of 1.5x (on a TTM basis), which is consistent with historical targets set by management...As of 12/31/15, the partnership had $25MM in cash and leverage of 4.00x (versus a covenant of 4.25x). These metrics do not reflect the sale of TLP’s GP for $350MM...Giving effect to the proceeds from the sale, we estimate leverage of 3.4x. NGL also plans to monetize other assets. For example, the balance sheet as of 12/31/15 reflects $87MM of “assets held for sale,” which is extra steel pipe not being used in the now consolidated Grand Mesa project [we estimate proceeds of $65MM (i.e., a 25% discount)]....In addition, we expect NGL to complete the sale of 800,000 TLP common units ($24MM assuming a price per unit of $30MM) to ArcLight. The remaining 2.4MM TLP units represent an additional $72MM of potential cash proceeds and would further improve the balance sheet. In total, we estimate cash proceeds from asset sales could approximate $510MM...Our model conservatively assumes that proceeds from asset sales and free cash flow resulting from our projected distribution reduction are used to reduce the balance on NGL’s revolving credit facility....Alternatively, the partnership could use these proceeds to repurchase its 2019 or 2021 senior notes (which currently trade at $0.66 and $0.59 on the dollar, respectively), which would have a more meaningful deleveraging effect. Assuming repurchases at $0.80 on the dollar (we expect the bonds to trade up if/when a distribution cut is announced), we estimate leverage would improve to 3.4x by 12/31/16 (compared to our current forecast of 3.6x).

  • jim_hairball by jim_hairball Feb 16, 2016 10:24 AM Flag

    Key Takeaways. FQ3’16 results were light. Management has received feedback
    from investors to consider a distribution cut, with the thought to redirect cash
    flow to debt repurchases and share buybacks. The rationale seems to be that since
    the unit price does not reflect (market is not rewarding for) the cash flow being
    paid out to unitholders (39% yield), that cash flow is better used for other
    purposes. We now conservatively forecast a distribution cut of 50% in FY Q4’16
    (CY Q1’16). Despite the projected cut, we maintain our Outperform rating. While
    a distribution reduction could cause near-term downside, we view risk / reward as
    compelling at this juncture. Including the distribution cut, we forecast NGL’s
    leverage and TTM distribution coverage will improve significantly to 3.6x and 1.9x
    (at 12/31/16), respectively, which should be viewed positively by the market, in
    our view. Further, we forecast NGL is trading at a 2016E and 2017E EV/adj.
    EBITDA multiples of 8.3x and 6.0x compared to 9.9x and 9.3x for the peer group.
    We’re reducing our 2016 and 2017 DCF/unit estimates to $2.10 and $2.53 from
    $2.63 and $3.60, respectively. Our revised valuation range is $10-13 per unit
    versus $17-20 per unit previously.

  • Reply to

    Rig Count

    by cubemeister2001 Feb 13, 2016 5:12 PM
    jim_hairball jim_hairball Feb 14, 2016 11:05 AM Flag

    Please just google Matt Smith of ClipperData, he has been saying the same thing for months now, why would this week be any different then any other week, the OPEC rumors are the same as any other week also, So why will OIL prices crash this week, as opposed to any other week of this year?

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