I became part of a WI group fighting the base rate increases requested by WPS, a sub of TEG. They are seeking 80% increases on the basic charges for elec and NG. These fees were in the $6-7 range 2 years ago. January 2014 they increased to the $10 - 11 area. Now they are seeking (were seeking $25) basic account fees in the $19 area for elec and $18 for Natgas. These are the fees before you use any elec or NG.
Obviously, the percentages here are incredible. A tripling of base account fees in 2 years. They trot out numbers that show how it will have a small affect on large users as they'll trim some NG usage chareges for '15.
I am a small user that has tried to conserve over the years. These increases will have a large effect on my monthly bills, although I can probably afford it. But, there are retirees and low income people that are living close to the edge that will be greatly affected by these increases.
This seems to be their "new strategy" going forward. Get increases in the base rates, then work on the usage charges in subsequent years. Bury the increases in the mid-winter bills where they won't be noticed until it's too late.
Don't trust these guys. They say "conserve and save," doesn't work that way.
Kel in Green Bay
Total debt about $735 million including the $228 mil revolver ...........normalized cash flow about $60 mil per 1/4 or about $240 mil per year.....debt about 3 X cash flow, a moderately aggressive number, but not crazy by any means. Many other small drillers are much worse.
Hedges.........About 4 million barrels hedged for 2015 at a price of $89. Q 3 production was about 1.5 million barrels. The 4 mil bbls hedged for 2015 represent about 65% of CURRENT production.
They hold parts of 2197 wells.....an average of about 8% of each well. Reserve life is about 15 years.....a very strong level.
Book value at the end of Q 3 about $11 per share.
Someone or some institutions are losing a lot of $$. Similar to writing put options and then having to cover them (or naked calls). Haven't real heard anything about this, but it has to be a looming problem. For every winner (those hedgers) there has to be a loser. Maybe they hedged their bets by buying deep out of the money puts on oil / NG stocks. Lots of $$ made there by someone. Just wondering.
cl.....You wander over here from the FSC board? I bought some PSX on Wed. @ 74.43. Phillips Petroleum (then symbol P) was very good to me back in the 1980s. I got on board when Boone Pickens as trying to maximize shareholder value. It was the first stock I ever bought on margin. Did very well. Will hang onto this one. I like the business mix.
I'm spreading my $$ around instead of gambling on one individual stock.
Now have......CHK, AREX, NOG, USEG, MEMP, PER, LNCO...+ UGAZ for NG price.
Good luck to you. Still have to have a little sense of humor once in awhile...(:^)
Hi Pa.........Back into AREX @ 7.35.........Kel
Some positive news on SFY. Natgas is only down about 80 cents from its recent high. Good thing they have all those hedges in place. They could be losing $$$$$ on both oil and NG.
Maybe THIS time will be the charm....Spend some time RE-looking it over for about the 5th time. Looks OK....
Hedges in place for this year and next.
Debt not a problem.
Cash flow is fine.
Cheap based on EPS, Cash flow, and Book value basis.
We know they will produce oil (90%+) for many years.
We know about what the operating costs will be.
We know they have no debt.
We know when the hedges will end.
We know they'll pay distributions 4 times a year.
We know all the wells are drilled (or soon to be) and we'll be free of SD mngt.
All good things to know. Not all the "unknowns" of the production companies.
Looked at DHY's SEC filing.......Energy related holdings (not counting Gas Distribution) totaled 23.2% of Total Investments......fell under 3 categories and 2 types of loans (Corporate bonds & Bank Loans).........the 3 categories are......
Energy, exploration and production
Oil field, equipment and services
Oil, refining and marketing
Will be a wide-open EPS number. Depends how fast they put the new $$ to work. Also wonder what amount of shares they'll use for the calculation. Average shares (lower amount) or the actual new amount of shares outstanding (much bigger number). All things to be considered for the NII and NAV. Not holding any FSFR.
When the EIA inventory numbers came out @ 10:30 Eastern. Still trying to get some firm numbers, but apparently the inventory draw was much less than expected. Some numbers posted on the CHK board.
Kel........not an SFY holder
Just bought some NOG @ 7.12.........Bakken player that's NOT an operator, but holds average 8% pieces of about 2000 wells. Good hedges in place thru mid 2016.
Back after many months. Traded this numerous times in the $12-16 area. Looked it over and like what I see. Hedges in place to cover about 2/3s of production thru mid 2016 unless production rises a lot. Cash flow is a reasonable ratio to debt. As long as these guys pull in their horns a little, they'll be fine.
Also holding.....CHK, USEG, MEMP, and LNCO.
Not sure if it's sustainable. Nice hedges but they all eventually are used up and new ones have to be put in place. If the new ones can only be placed at lower prices, then the div could be in trouble. Might be an issue down the road a ways.
Something like that happened to some gold miners. Many used up their hedges(or liquidated them) and decided to go unhedged then. Problems then with lower realized prices.
Kel.............holding a small LNCO position.