17% a year production growth and growth is oilier than current production. 20% to 25% earnings growth or cash flow growth with the possibility of higher growth depending on the usual items.
Management has been talking their book for a couple of years and drilling is starting to prove they were not wrong. Great long term holding IMO but is a bit pricey.
I have a large position for me and prefer that PXD lives within cash flow instead of taking on a lot of debt.
Slower growth but much safer in a down turn.
Company has been a big gainer for the last few years. Seems to have gotten ahead of itself a little bit here.
Not sure what valuation would be put on a development stage company with the same resource base. I expect the enthusiasm will pump this stock up as they highlight production bumps and big wells with better completions.
In some ways the production story is 2015 as this year they were planning on doing a lot of science this year while 2015 will focus on production and more pad drilling.
Drop in oil prices certainly a bit negative.
Normal reaction for low DCF coverage and a miss. Thought it was a benign reaction as this and other MLP's often go down after distributions and earnings.
Should be a decent return in the next year as distributions get to 70 cents a Q and stock price goes over $40.
Eagleford was a miscalculation in the short term IMO but down spacing, pad drilling will bring up production and new customers should bail APL out somewhat. I mentioned if before but anchor acreage with Talisman is the weakest player around IMO. They will sell their acreage if they get a chance. TLM has changed CEO's and corporate direction soon for the 3rd time since 2008.
I think the Cohen's are reaching too far and it has pulled valuations down on ARP and APL from where they would have been.
No earnings misses will bring premium to stock price and make acquisitions much easier. The Eagleford purchase has hurt APL's stock price.
The coal bed methane acquisition is more in the interest of ATLS then ARP holders in the short term. I am a bit optimistic on longer term gas prices so it may turn out fine.
The Eagleford with 20% of margin contributed by condensate equity barrels is a bit of a gamble...price of condensate, efficiency of field equipment in gathering condensate at the well head before it gets to APL plant and the economics of drilling in the wet gas window. Not to mention the weak player Talisman JV'd in the area and from my understanding an anchor supplier to the plants.
FWIW I am lowering my exposure to the Atlas group. Seems funny to be doing when there is very real growth coming. I just do not like the leverage increases when there are plenty and more than plenty of organic projects to provide a wonderful growth profile with much less risk.
I also need to diversify and this is a good enough reason.
I think a 10% yield would be closer to what would attract buyers but may need to be higher. Considering that the company may dilute or sell assets investors can be patient.
No kidding. Buying something at triple x multiple after crowing for the last few years about doing the opposite.
This is a score. Martin County has some of the best wells in the play so far and Pioneer has another partner in the northern part of the Spayberry that I thought had closer assets. Ownership percentage is a little lower on the APL partnership but maybe APL is less capital constrained. I have been hoping APL would expand the Permian asset as it is a much better use of capital that most projects.
Some of the natural gas pricing in the Marcellus dropped well under $2 per million btu's. Delays in producing in Ohio unfortunate. That these were banger wells and should have had an impact on DCF is a given. The fact that ARP was using this expected production in areas that they did not have any production to pump up distribution expectations is beyond aggressive. I hope the current estimates are conservative. I hate getting burned by management building up to a crash. Lucky for me the Lynn issues let me buy in low enough that I will still make a decent return on distributions.
Overpaid for South Texas. 20% of margin is condensate and 80% fees. Condensate market is getting close to over supply, producers may be getting more efficient at stripping at the well head, volumes less than expected. This is the most obvious example of over reaching to benefit ATLS vs APL holders.
More debt, low returns and cost of capital likely creating very low digit returns with soon to be 50% IDR's.
I am sure it will all look like nothing in 3 years but right now unit holders would likely have a higher stock price if the South Texas purchase had never happened.
I too have followed this company for quite a while and observations here about Cohen do have merit. I hope the self dealing does not happen as a more valuable asset for the Cohen's and everybody is a higher price on ARP units to bring down cost of capital.
Wait and see for me as units are too cheap for me to consider exiting position.
Not happening. The structure is appropriate for value a creation to ATLS and high current income to ARP. I may be proved wrong but do not think there is anything afoot involving ARP giving assets to ATLS so that ATLS can have more GP rights. Just illogical and lawyers would have a pay day.
ARP can monetize assets to institutions in the same way that they market to individuals but in acreage instead of wells. ARP would get a fee or percentage for managing the assets and the institutions could get some assets that would match up to some of the long term liabilities. There is a synergy between the intrinsic value of oil and gas assets vs long term liabilities in a vey low return environment. It is just a matter of how it can be structured and the goal for ARP would be to bring forward net present value on some of the smaller assets (bundled) while managing institution money to pay for development similar to a JV agreement. The difference would be the MLP pass through to to a likely pass through entity ( pension or endowment) that would be at an advantage compared to doing a deal with a C Corp.
I have no idea what the end deal will be but current returns on long dated assets vs liabilities does leave a lot of room for a low cost pass through operator.
What a run. Target raised to $228 this morning on my Schwab alert. Cannot remember the author. I keep having to keep my fingers away from selling calls on the stock. Premiums are nice but with my long long time frame I am better off to ignore and let it run. Update on well performance in the quarterly report but last analyst meeting it was mentioned that PXD still experimenting and still gaining on well productivity.
I expect the next few years will be very good still for PXD.
None taken. So what are the bonds yielding in this market? Are they much under par?
This previous post from a may 2011 article. I am assuming the acreage is worth a lot more account much closer to an export option and access to infrastructure. Japan in need of long term supply of gas even with long lead times seems like the most value added customer.
Quicksilver Resources to sell HRB acreage for $150 million. Another $1.5 billion package in HRB is on the table.
Very old article has a value for HR acreage. Should be worth quite a bit more now.
“Quicksilver Resources is considering seeking a partner for its Horn River Basin (HRB) acreage in northeastern British Columbia”, said Glenn Darden, President and CEO of Quicksilver, during the Q1-2011 conference call.
Source: Quicksilver May 2011- Investor Presentation
Quicksilver’s work program in HRB
Quicksilver completed its 2010/2011 winter drilling program in the Horn River Basin and has now drilled a total of eight horizontal wells into the Muskwa and Klua formations, of which four wells have commenced production (11.1 MMcfe/d for Q1, 2011). Only two additional wells are required to validate all of Quicksilver’s exploratory licenses and convert these licenses, covering approximately 130,000 net acres, into 10-year development leases. In addition, the company has drilled its first horizontal well into the shallower Exshaw oil formation and expects to begin completion activities on this well this summer.
Status of midstream development in Quicksilver’s HRB asset
Quicksilver has initiated midstream operations associated with its Horn River assets. Construction and compression related to Quicksilver’s own 20-mile, 20-inch gathering line, which will serve as the spine of Quicksilver’s transportation from its Horn River acreage, is now complete. Final tie-in of the line into the Spectra system is anticipated in late May, which will enable the company to flow gas from its four completed gas wells at unrestricted rates of more than 30 MMcf per day.
It’s vital that a company has a strong midstream system in place to ensure it can process and transport its gas at reasonable cost and sell it for acceptable prices. With the midstream facilities in place and considering 25% sale or JV, the acreage to be sold can be valued between $130-$160 million (based on $4,000-$5,000/
I own 70 ATLS Jan 40 LEAP's and plan is to convert to stock. I own 30 Jan 60's. If ATLS would have had some 2015 calls I would have bought some last February.
I own some ARP February calls but have mostly been buying ARP and selling puts on ARP.
That is a big slug of April calls. There was unusual option activity right before the new ARP was announced. Obviously someone has some way of being very sure that something will happen.
Could be the new MLP ARP has mentioned or the partnership raise is going to be above forecast or someone is finally figuring out that the Permian drilling at $100 oil will actually exceed the most optimistic estimates and APL will need a new 200 million a day plant almost yearly for a while.
ATLS baring any sharp decline in unhedged product prices is really in the sweetest spot of the growth rate for the next 2 or 3 years.
That was my understanding. Should I buy some short term calls on ARP? Just joking. They would have to be dirt cheap and I like longer than 2 days to use options.