The point was that the price was that low and there were no offers from 'big pockets' suitors at that time. Yes, acknowledged that other companies had their own problems at that time and may not have had acquisitions on their minds.
As for today, EROC management have been selling their own units in the $5s, so that would seem to imply they don't see a buyout coming at the current price (otherwise why would they be selling?).
conclusion to the article:
"Gushing U.S. shale oil doesn’t mean oil is about to become cheap and plentiful. The fall off in conventional oil production is real, and scary."
I never said oil prices have "nothing to do" with my investments.
I am mainly invested in North American energy infrastructure (pipelines, processing plants, etc). Some of those have some commodity price exposure but many use fee based contracts and so make money so long as energy is being used, irrespective of the daily price. My bet is on the continued use of energy and development of energy infrastructure.
Also, I don't cheer oil price up, simply point out news which confirms what for me is pretty obvious but many here don't want to believe.
Looking at decades worth of distributions is pointless and there is no justification for hoping the payout will revert to the mean. As the gas fields deplete they will produce less, so the default expectation is for distributions to continue to decline (with seasonal variations relating to NG prices, and the US $ to Euro exchange rate will factor in also). The conserative assumption is that distributions will continue to decline at the rate they have over the last 2 or 3 years. So when calculating your forward yield, make sure to base it on a lower future distribution rate (and lower each year until it finally terminates). Agree that the reserves and hence trust lifetime are probably conservative and it could go for longer than implied by the annual reports.
I'd think your $11 target would be on the low side (in the short term), however it can easily drift lower from here (and is doing so). Maybe $15 is a realistic short term target.
"Oil production from North Dakota continues to skyrocket but drilling has become uneconomic in some parts of the state due to falling oil prices, the state's top oil regulator said according to a report.
With the price of North Dakota Sweet crude oil falling, drilling parts of the prolific Bakken shale oil formation has stopped making commercial sense, the head of the department, Lynn Helms, said according to the news wire.
"It's going to make the economics difficult for some of the counties, in particular Billings, Divide, Golden Valley," he told a conference call on Friday."
don't think that's correct. They will pay the first distribution in February, along with CQP.
We have, that is the trouble.
You are apparently the only one here who is oblivious to just how badly this management has messed up. How about doing some DD of your own instead of living in that fantasy world of yours?
same as after every buyout/merger.
They turn into adjusted RGP options with a different deliverable (no longer 100 units and cash payout factored in) based on the merger ratio.
Real newbie question as the same procedure happens with every buyout.
Not known? The wells that are already in production (and which have been way under expectations) give a pretty good indication of what the new wills will do.
I guess you never heard of MLPs before?
If so, you certainly never learned how they work.
Also, what has been the recent dcf for RNO? In other words, if there had been no support of the distribution from the sponsor, how much distribution would RNO have been able to support?
I do not trust arrears. EROC was supposed to have arrears but they simply restructured and wiped away all arrears. My feeling is that if conditions are bad enough that they couldn't pay the minimum distribution, then arrears will never get paid - the company will simply wipe them out.
For example, I think OXF may also have similar provisions. Does anyone in their right mind think OXF will ever pay its arrears? It's doubtful they will even pay a distribution ever again let alone arrears.
My question is simply whether the sponsor is committed to continue supporting the distribution for as long as it takes. They have been doing so for a year or more now but what if the coal slump grinds on for years? Will they decide to stop pouring money into a hole?
arb, I understand the sponsor has been supporting the distribution.
Is it your understanding that they are committed to doing so for as long as it takes, for example if coal has no recovery for years?
yes, they would not be subordinate units.
The subordinate units are owned by the sponsor, they are not traded under ticket RNO.
Yes, you'll get the distribution, so long as it is maintained.
The sponsor has been supporting the distribution - my question is whether they will continue doing so indefinitely even if coal does not improve for years. That is the risk.