EPD remains my largest holding but that doesn't mean I cant be honest about what goes on... and IF whats going on ticks me off I'll say so.... Im a partner with a very limited voice... but I will say what I think
Mgmt gets paid rather well here and eF ups like those that are being discussed need to be addressed before they cost us partners another Billion $.... additionally IF they spent our money in an act of petty vengeance as has been implied we need new leadership
are you concerned when they squander a Billion?
BTW... no one seems to offer a different version of events or is saying they didn't squander that Billion
Your scenario should be reason for concern... not only did ETP sue EPD they won.... and IF my memory is correct it was a $1 Billion judgment... so that would indicate that EPD mgmt. started the problem by screwing up and costing quite a bit of partners money
You now imply in an act of petty vengeance they use more partners money to float an unrealistic proposal just to tweak ETP.... well let me tell you... that was some tweak and they must be rolling on the floor laughing as their cash machine counts EPDs money
These acts would indicate incompetence that is not worthy of a kick in the rear on the way out the door... they need to be kicked in the nuts ... and then in the teeth when they bend over in pain
How about a statement of accountability and a head on a plate out of EPD if your scenario is remotely accurate
That $1Billion they will fork over to ETP equates to a 1X special to partners of $.50/unit.... and I don't know about you but that's a nice 5 figure amount for me.... of course... nothing I should get my nuts all twisted over now is it... their screw up cost me about $12K if that Billion $ had been paid to partners instead of ETP
IF that were to be true than mgmt. just used partners money at a shot in the dark hoping to get lucky... good mgmt does not waste money to antagonize a competitor... IF they did that team should have a boot print on their rear end
The landscape has changed... MLPs are in for some tough sledding
The euphoria of the lower energy prices will result in consumer splurging just as the FED was about to change policy to tightening... It will guarantee they move in the first Q.... and that will affect the sector negatively... as the tide recedes the sector and EPD will take their medicine... and it will not be pretty when you are already 20% off your high
This is not time for feel goodcrap.... its time for reality
and for the Bakken region no less... a region that does not have pipeline access... a region that relies on costly rail
That means that producers are not willing to commit to volumes and see their own production dropping
This is all in line with the discussion of small producers not being able to meet commitments... small producers going under... and pipeline finding themselves in a position where they may be forced to renegotiate rates or see their customers go belly up
This is not good for the US economy... I don't care how many people have an extra $12 a week to spend in Wallmart
The drop in production... revenue... and layoffs in the energy sector will have massive ramifications....
I was poo-pooed on this very board back in Sept when I mentioned the oil glut... this is going to get a lot uglier before it stabilizes
The company has stated in the past that they were saving dry powder for events like this to defend the unit price via an increase in the distribution growth rate.
Personally.... I didn't believe it then because now is the time it makes the least sense to accelerate the growth rate... now is the time to have the strongest balance sheet possible
Could go sub $30 with the energy equity "crisis"... I suggest now is the time to place limit buy orders well below the ask and take shares on the cheap when an entity is forced to liquidate because of margin calls issued because of other securties
I can get on EPD all day long but not about a falling distribution coverage rate... the rate in 2012 included massive one time gains so its ridiculous to use the coverage # without subtracting out the gains.... I believe 2013 had one time gains also
The reality is that the coverage has been very consistent
While cheap oil is a tax cut it is at the expense of one of the largest sectors of the American economy... it 's not big oil being hurt XOM and friends are doing fine... its the small independent producers that are being killed and may go under
Todays market selloff is linked to cheap oil... numerous articles today talking of the thousands of high paying energy jobs that will be lost to layoffs... they did not even touch on how those layoffs result in so many other layoffs
Every fracked well that is not drilled or is delayed comes at a very high cost to the wells local economy.... hunderds of thousands of dollars not spent by rig hands their families or the energy company itself on incidentals
There has never been a dramatic drop in energy prices that was not followed by s a significant recession and from the previous discussion it would appear that the current administrations foreign policy is to blame. Global geopolitics should never be placed ahead of the nations economy unless there is a DIRECT THREAT to the SECURITY of the US public
There is also the question of dividend cuts (not epd) and how removing that income from those that rely on it will affect the economy... I guarantee you that those that had $3K yr flowing in from SDRL are at a significant net loss after the positives of lower gasoline prices are factored in to their personal financial situation.... as for MLP owners... anyone really think that LINE is not being sold off ahead of an assumed distribution cut... how are those folks making out... they have seen a 50% reduction in equity and may see a large cut if not an elimination to their distribution
All because the administration wanted a different government in the Ukraine and engineered a "peaceful" overthrow of the legally ELECTED government
and why did you have to bring up the color of Obama's skin... rather racist remark from a left leaner that appears to be heavily invested in an area that relies on fracked fossil fuels, what a hypocrite
This statement of yours "The President does not make laws - Congress does"...would appear to be 100% in agreement with mine "Congress and the administration need to act on oil export"
I could go on to point out that while you say this site is not for political commentary you dive right into some serious political reasons for the decline in oil...
You agree that some frackers will go belly up... and its my opinion that the traders are hell bent on seeing to it... frackers going under will affect mid stream pipelines
The interests of American Energy should be more important than anything Russia is doing short of nuclear war... we need to stay out of their business... and I'll argue that the "west" played a key roll in the illegal upheaval in the Ukraine that started all of this... so we stirred the pot... caused yet another "coup".... and then want to punish Russia (for attempting to protect their interests) and while doing so punish American Energy companies.... I think that policy SUX.... the middling of the USA once again in other nations affairs... I thought this President said we would no longer do that
POLITICS should be front and center in any discussion as to what is affecting the net worth of anyone owning American energy companies....
Just wait to watch what the Investment Banks and the traders do to the MLPs when they raise rates next year.... if this current situation hasn't calmed there will be a bloodbath in this sector similar to 09
Guess what genius... follow the logic.... the Saudi's flood the market with cheap oil (btw its not the cost of gas being low that's the problem its the oil that makes the gas)
US frackers cannot compete and lose money and eventually go bankrupt... costing $100s of billions in investment dollars and thousands of very high paying American jobs that support thousands of other American jobs
When the Saudi's no longer have all of that fracked oil production to compete with the price of oil miraculously goes well above $100 bbl on supply shortage issues... and your beloved $3.25 gas is well above $4 again at a massive double whammy cost to the US economy... fracking will return but it will take years and $100s of billions of new investment capital will be needed
In case you missed it... it is US energy production that is the bright star in what ever recovery the US has enjoyed... but hey... Joe blow saving $14.86 a week on gasoline is worth the hit to GDP and jobs
I just relayed what CNBC reported... and a contract is a contract until bankruptcy
The bondholders in GM have some good stories there
The Saudi's are attempting to destroy the US fracked oil industry..
So the US should allow domestic crude to be exported to get the higher Brent price...
Of course it will cause Brent to drop but it would send a message to the Saudi's that we are not going to let them destroy the US oil industry
and we can send a side note that we wont do a darn thing to stop ISIS when their citizens revolt because they cant support their social programs
There are cards the US can play... its a shame that POTUS isn't getting his panties bunched up over frackers being destroyed... he may even be encouraging the Saudi's given his politics
are under pressure from the frackers to renegotiate their transport contracts ( they mentioned PAA and MMP)
this could be a reality because it would indicate that the frackers producers need to trim costs to continue to operate... if the frackers with contracted capacity go under the contracts are worthless
So you believe with less production and less product available.... lower prices.... US hydrocarbons will be competitive with the Saudis who are selling product at about par to WTI including transport with a far better export infrastructure in place
I don't see it and export of US product was the topic.... we agree that producers are gonna get killed.... I believe that will have an impact on the mid stream players....
another point of agreement might be as I originally said was the need to get past the election... it wouldn't be the first time an administration engaged in policies that reduced the cost of energy in an attempt to get an edge at the polls... and I really don't want to get into the politics of it
Export of US product will certainly not be a robust money maker in the current environment.. it will be a costly endeavor when going head to head with the Saudis who produce at about $25 bbl and currently are showing a willingness to undercut all others...
The Saudis motivations have been the subject more articles than I can count on Bloomberg over the past 2 months.... yes all of it speculation... but something is motivating them in their current policies... and its those policies that are the root of the current energy meltdown which affects all energy related companies
The point is which fields reduce production with $70 oil... how will that drop in production affect supply available for export?
What will the demand be on the world mkt for US exports IF the Saudi's continue to sell oil at a discount to Brent? That's the status of the mkt today... they are selling at about $3 below Brent including transportation to port.... How would WTI be competitive after transportation costs are added on
The producer stocks will see further slaughter @ $70 WTI.... profit will evaporate.....IT will impact the frackers ability to finance their wells and when interest rates go up the equation is compromised further.... the pipes are not going to go dry but IF a fracker goes belly up those contracted dollars for capacity will disappear along with the domestic product
So long as the Saudis and OPEC flood the market with cheap oil all energy companies will suffer... mid stream MLPs are not immune
The stories in the media that suggest the administration is in cahoots with the Saudis to hurt the Russians and Iran would indicate a very myopic administration who's actions will hurt the US economy as much as the Russian economy... Then there are the stories that say the Saudis are motivated by their desire to cripple the US frackers..... what ever it is the frackers are feeling the pain..... Energy is a very large % of US GDP and a huge chunk of that is in jeopardy along with a massive amount of jobs
Im not commenting on EPD... Im concerned about how the BIG picture is bound to affect EPD
I know ya'll think I'm insane but just take a look at LINE and how that has reacted over the last 30-45 days
Energy export from the US may be going the way of the Dodo before the first Dodo is hatched.... If the Saudis keep their present stance not only will they be undercutting US energy producers on price.... fracking and the product available to export will be in decline.... not quite going the way of the Dodo but it will fell like it to some of the producers
Condensate only exists in great quantity due to fracking.... oil goes to $70 and we will see a good deal less US production
Major implications for the economy... producers and yes the mid stream companies because when producers that have contracts on pipe to ship go belly up.... those contracts/revenue will disappear
Lets hope oil rebounds towards $90 after the election
on the contrary.... cheap oil will destroy Telsa.... I'll take a BMW over a Telsa any day... and the Beemer will be cheaper to drive.... not to mention far safer
so you pumped it to retirees while you were dumping it and denying its risk
What a guy
Hey Stevie.... Hows that MLPL that you recommended for retires.... I know you said you weren't interested in the unit value... yield only.... but hows that 30+% haircut feel
Hey.... some may want to nibble at MLPL when its yield goes to 15% in a few days
Well since the Fed is run by investment bankers... its the firms that they used to work for that know their direction before the rest of us... and rates have really only one direction to move.... and its what we are constantly monitoring Fed speak