Would not be surprised if they did not sell the assit, but obtain a partner. All they need isabout 700-800 million to obtain the debt levels that Roberts desires.
They pay all their free cash flow in distributions. At $1 earnings free cash flow has been about $1.40. I would imagine it wouldstay like that unless they incress CAPEX spending which is unlikely since they are not expanding.
Based on Zacks earnibgs estimate of 0.95 to 1.05 I believe distributions woul be in the $1.40 range for next year. Remember distributions are based on cash flwo not earnings. This correction is way over done.
In my view oil will be in a trading range for a long time between 90 to 110 (Brent). It may spike as low as 80, but economic forces should create a floor ( high cost for fracking wells etc). Typically oil wil trade down through October and maybe even into November, when the heating oil market picks up and will trade up through July and August.when drving season ends. The period form late july though November typically is bad for oil. I don't look for 140 oil unless there is major geopolical event nor oil mch below 80. One thing to note is spread between canadian oil and WTI has tighten. PWE will pay its dividend down to $80 WTI if stays a low levels for sustain period the dividend will have to be looked at.
I think the next two quarters will be low because they locked in the price for UAN at 255. Probably in the 0.25-0.30 range. next year if UAN remains in the 285-300 range the dividends should approach 1.60, which is little low historically but srill good.
I know the UAN market is somewhat week now, but even at $285 UAN pricing this Copmpany makes excellent cash flow and 1.50 to 1.60 dividends that are essentially tax free. I guess the float is so low that it doesn't take much much to move thisstock one or another.
I agree it is robably tax loss selling. This will go on for a month. Hard to believe it got this low. Potential for at least 1.60 in dividends next year.
We are approaching the winter months and oil and gas prices should trend up starting in November. Oil needs to stay above 90 to cover the costs of drilling the newer bakken type wells. Traders know this. If it drops below 90 for period of time the high depletion rate of these wells will cause the US output to start to decrease. I believe we wil be stuck in trading range from about 90 t 105 for quite a while unless Mid east gets way out of hand. Also most arab countries need 100 dollar oil to balance their budgets, so OPEC will cut as they just announced to keep upward pressue on prices. As far PWE is concerned, They should do all right, need to get the accounting thing behind them.
They have 3 properties that they are looking to sell, I don't think they will sell all three. They want to get down to about 1.5 billion in debt, That means they need to sell about 800 million in assets. My guess is they would like to sell seal properties first because it is calital intensive process to develop these wells because of the steam requirements and the net back would be lower because it is heavy oil. I would think the gas property would be next and the duvernay would be last. The duvernay though would be easist to sell. If they did sel all three they would use the extra billion dollar to purchase property in the three areas they are drilling.
As far as natural gas prices, I believe at least for this winter you will see elevated prices, They are starting to creep up again and are at $4. Storage levels are at record low levels as this time of year (about 500 BCF below the 5 yeat average) and the farmer almanic which historically has been more accurate in recent years than NOAA is calling for a brutal winter in the eatern 2/3 of the US. If that is the case natural gas costs could exceed well over $7 which will cause fertilizer costs to go up for everyone but CVR.
You have to appreciate this stock has an extremely low float, so traders can easily move the stock one way or another. Right now the stock at these fertilizer prices is set to return almost $1.35 per year in dividends almost tax free. Thatis pretty good return. My guess that of the 18% float only 2-3% of it is actively traded by individuals that are esentially day traders.
PWE is most vulnerable for a hostle takeover between now and when they report earnings (hopefully on he 14th). I am worried that something will happen, with potential proxy fight . Any offer will be low probably be in the 12-13 range hoping to take advantage of unhapy investors. I would preffer that they stay the course and complete the turn around because the stock potential will be much higher with improving dividends.
This is MLP that is based on returning its free cash flow to the investors not a PR stock like AMZN. You should get out.
I hope you are right, I am counting on 35 cents. still a good return. $1.40 er year in a down year for UAN pricing, is pretty good. the stock should be at 20-21 which would be a 6% plus return.
So nobady gets confused in reading articles cash flow (when some consider the revenue component ) is predicted to decrease by 7% according to one of the Canadian banks, but free cash flow will remain the same. It was slightly positve last quarter and should be even more so this quarter (which is what you should be concerned about). The reason is when CAPEX gets booked to OE the net income goes down but the CAPEX goes down the same amount o net net the free cash flow is same. The dividend is more covered.
When you say everything goes like it should, that means no unscheduled shutdowns, which is always a possibility. As far as the crew goes, I have no complaints, they can't control world pricing of UAN. It appears they handle business very well.
I totally agree, but it does give an indication that PWE may ripe for a hostal takeover, which would be unfortuate. Giving the accounting scandal investers may give up the stock in the $13 range, which is significantly below the value of the company. As a side note IR said that the August 14 earnings release date is still valid, although, it may be delayed a few days, but they are working toward that date.
Looks like based on projected UAN pricing for second half of the year and production guidance, we will be stuck at distribution between 30-35 cents still not to bad return. Pricing is down 10% but production up 10%, indicates revenue should be about the same. OE should be comparible to thisquarter, maybe slightly higher because of additonal fuel costs. I own for distribution, I look for consoldation eventually in this space, with UAN being a prime target, because it is low cost producer.