I help the under-educated who are lured in by the BS folks like you post. Trying to convince all is well when the risk is great each day because of the facts. I have no economic interest in its success or failure, my job is to educate. if you disagree post numbers crunched from the guidance and 10k that include the cost, all the cost and nothing but the cost. Investors should be looking at companies who can survive oil under $80 for the next 2 years. GDP is not one of them.
that post is prior to sale of EFS production and cancelling of pr dividend, The fact is the upfront liquidity of the EFS sale and cash savings of suspending PR does not offset the loss of production rev. from that sale, it increased debt per flowing barrels and more importantly the interest servicing cost per flowing barrel. Just because no debt is due until 2017 doesn't mean that won't still have to pay the interest payments of stay within the covenants agreement of the debt. They will have no choice but to default. $80 a barrel doesn't save them and they don't have 18 months. You are being plain stupid and ignoring the reality of the declining production, maint cap, g&A expense, interest servicing, LOE, trans expense, production taxes all of which are due everyday to keep the doors open.
At current production annual rev at $60 oil and 3$ gas is approx 100 million, all in expense 112-115 million, plus each q decline rates lower production and so they would have to drill to keep it up but it's uneconomical to do so below $100+ a barrel when you add in the total expense. break even eco in presentation do not include those items, you would know this if you knew anything about running an oil company. is that enough of an explanation son?
As well no hedges in 2016
The answer lies in production vs. interest servicing cost per barrel and maint. cap and exploration cap that must be spent to keep production flat example they produce 5000bopd 5000boe of ng, or on a rev basis 6000 bopd interest servicing per year 82million dividends by (6000 barrels per day x 365 day) = 37.44 per flowing barrel of interest servicing cost annually . they will need to spent 20-30 million in maint. cap and 70-80 million in drilling to keep production flat or approx. 100 million dividend 2.19 million barrels produces a year = $45.66 per flowing barrel to keep production flat at 6000/bopd
When you add it up it tells you the price per barrel at 6000bopd (I say 6000 barrel of oil because its 5000 oil and 5000 ng, 5000 beo ng generates the same rev as 1000 barrels of oil though ng margins are inferior but I'm being generous to the bull case and granting it ) to live within cashflow.
SO breakeven of 50$ + 37.44 debt servicing + 45.66 maint. cap and drilling cap to keep 6k a day flowing in 2016 = the price oil must be sold at to remain solvent = $133.1
Of coarse if oil were $90 they could sell assets and JV TMS etc which would lower the cost. BUT the only cure is higher prices, much higher price and higher production to spread their fix cost across more flowing barrels. You can see how selling the EFS with 2k of production does little to the numbers
Lets say they get 200million for EFS and knock debt serving to 62million, do the math the loss in production outweighs the 20million in saving increasing the debt servicing per barrel to $42.46 raising the breakeven price by 5$
Their production is far to small for their debt. They would have grown into their debt oil at $110 with some assets sales, but not now and with oil futures 2 years out below $75
To achieve higher production they have to spent more money, which they don't have or have to borrow and pay interest on.
It's a sobering illustration of where the company is currently
It's called interest servicing cost where is due semi annually and g&a I suggest you crunch the numbers as the hedges roll off and declining production takes hold son.
yeah lots are licking their wounds. This is done. In the end it was to benefit those who formed the MLP, collecting sub-par assets and awarding themselves a prem price for them. I'd guess they suspend the PR dividend next, then a restructure BK
That is complete BS, they are not buying back shares. They can't until the terms of the debt, does anyone really think it's logically that the terms of any debt secured, unsecured PR would allow the suspension of payments to buy back shares, complete fiction.....man it's amazing to read your history of lies. You keep trying to create facts which don't exist, read the 10k, still holding on to your pipe dream and losses huh son. everything I laid out has come true, stock under a dollar, suspended dividend, they can't survive, their leverage show that plain and simple unless oil is over $100 in 3 months. period. here the next prediction based on the facts, in the next 3-5 months you will wake up to read about a prepackaged bk wiping out common and PR will get warrants that will equal 3-5cent of the dollar. To even suggest that they are buying back shares or anyone is shorting is outrageous. You can't short GDP it's unmarginable, you can't borrow the stock.
Sentiment: Strong Sell
not really, it increases their likelihood of restructuring, meaning common will be wiped out
yes memp is very well hedged and with the cut in dist and price collapse yielding 20% and secured through 2016....it's a core of mine
This is a who can survive the longest fight. where the lowest maint cap and interest expense per flowing boe wins. I doubt in general will be see the amount of rigs drilling in North america as we did in early 2014 for 5-7 years
Not a fan at first glance of celp. The service sector has yet to bottom, Their dist coverage ratio is .91 last q. They do a lot of business in the bakken where if you are not in the core of the play it unprofitable under $60-65 a barrel. I think service companies will suffer greater and longer then the producers because of the over capacity of drilling rigs and competition service built up in the boom much like the dry bulk tanker fleets.
If you are going to buy celp please find out who their customers are in the bakken and what acreage they hold to deduce what kind of volume of business will possible come their way. Plus in the services sector the largest are squeezing out the small players forcing them out because they can to gain market share.
It's not an in depth analysis just a quick glance...in general seek out the companies in the lowest cost basins in the core of the play. For oil it's parts of the Eagleford, Bakken and Perm and for NG the cores of the utica and marcellus in general....in general...
one should consider the value of the underlying assets as well as the dist. Personally I'm in for the asset base more so then the dist. currently. Stand alone the land and pdp, pud are worth well above $20 a share
Sentiment: Strong Buy
Pooch you need to do a little research and when you post try to present the whole truth vs. a half truth that supports your outward bearishness. DD&A, a portion of G and A are non-cash charges, plus there are non-cash write down due to pricing environment etc, etc. In the end it is about positive Cashflow and Ebitdax as surf stated. It's your constant negative comments that leads me to believe your true intention are not in the boards interest.
Sentiment: Strong Buy
EVEP....but honestly if you have say 10k or 1 million pick a few vs. all or nothing. If you are a home investor pick 5 or 6 to hedge your risk. Though they are mainly all upstream, I see the the best value there in the mlp space with most 60-80% off their highs and mature assets which require low main cap to maintain positive cashflow. And all have cut their dist. at least once and done their deals with the banks to ensure the next 2 years of cashflow and min, if any dilutions.
Read the 10k's and apply the formulas and analysis i showed here.
The numbers never lie and either did I, I was never long or short NSLP. I provided public service to the undereducated investors who were mislead by posters and posers like tradernor and leggie who frankly are the real crooks here.
I hope in the end someone took my advice and double-checked my numbers and learned something and got out before the end which this is. NSLP won't exist a year from now.
I'd go with EVEP, BBEP, MEMP, ARP, HCLP, MEP all have the opportunity to double in the next 2 years but that is an opinion not a fact. Read the 10k
In the mean time reinvest the dist. and grow your base.
Tradernor and leggie hope is not a strategy. Learn from this. Everyone get a few of these in their lifetime I have had mine. Regroup and invest in good American companies. everyone else be patient, it'll be another 1-2 years before the oil markets recover but the smart money is positioning now.
Hey Zappa, i wish you great success.
Sentiment: Strong Sell
zappa I hope you have moved on, good money after bad. book the tax loss and redeploy. look at evep, bbep, memp, apr, hclp tp recover capital
I don't think so I bought originally at the ipo years ago, then again in 2009 in the 20's, sold all at $64 then back in in the mid 9$...I have one of the longest history's with EVEP...... that being said, in the MLP upstream space they are extremely well positioned to benefit in the long term coming out of this cycle. I am glad Walker thinks the dist. is important, it's important to a great many investors. They can acquire at 4-5 x ebitda, on 500 million that's 100-125million, back out interest at 8%, taxes leaves 50-70 million in fcf. They are one of only a very few that can grow without issuing equity. I want them to take on debt at the right terms and for the right assets to position the company for the next 10 years during a more robust commodity price.
I think pooch has some vaid concerns, but they are concerns not facts and he or she is entitled to their opinion. cutting the dist at this point in half frees up 45 million a year but we have no debt on the credit line and our bonds are not at a vast discount....I feel it better to serve the business model of generating fcf and returning it to investors and grow the company...they have enough cash on the balance sheet to fund maint cap for the next 18 months and access to 500 million to acquire with. Should they fail to find assets in the next year to acquire then I say cut the dist but a year is a long time.
Sentiment: Strong Buy
Additionally, the Partnership has violated debt covenants on certain of its oilfield service related debt, which results in this debt being classified as current and could require us to have to pay amounts outstanding sooner than anticipated based on the original maturity. While we are evaluating strategic alternatives, there can be no assurance that the Partnership will be successful in these efforts or that it will have sufficient funds to cover its operational and financial obligations over the next twelve months, which raises substantial doubt as to its ability to continue as a going concern.
they expect production to drop 20% in 2h15 .... close to neg cashflow on ofs division..... told you.
Sentiment: Strong Sell
You are way too negative and i wonder why? Why? what's your position, long? Short?
"They will not cover the distribution under any scenario in 2015 or 2106."
Quite a negative stmt, especially when they have hedges, almost 600million in liquidity, the ability to acquire high pdp reserves, ability to monetize non productive acreage and redeploy proceeds into pdp, drill co jv's to increase dcf in the out years.....etc etc they have lots of options to maintain a 1 x coverage....in actuality I believe they will keep dist flat through 2017-18 with an average coverage of 1.3 times
Sentiment: Strong Buy