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Inergy, L.P. Message Board

moneyonomics 190 posts  |  Last Activity: 22 hours ago Member since: Jan 16, 2010
  • Reply to

    Now until rest of year

    by nymarv10956 Dec 16, 2014 1:22 PM
    moneyonomics moneyonomics 22 hours ago Flag

    Is Saudi Arabia replicating the 1985 oil price crises?
    posting on iv mlp and bry boards you will have to go their to see graphs
    Is Saudi Arabia replicating the 1985 oil price crises?
    In my response to arb on the IV MLP board.
    We are in very similar situation as around Nov. 1985 when Saudi Arabia decided to defend production rather than price. Response of US oil prices was immediate in Nov./Dec. 1985, but US oil production decline response was around 3-4 months (remember majors controlled more of the US production at that time than today and fields being produced were larger and many still in primary oil). I am demonstrating response in graphic form with polynomial trend lines. First graph data starts Aug. 1985 thru July 1989 (4 years) and second graph data starts Aug. 1985 thru Aug 2014. What you will see volatile prices started responding in an upward trend around 9 months after Nov/Dec 1985 start to price crises and to production around 6 months after start of production trend decline (point on what I have been making about price returning to average moving trend lines), and US oil production had just recovered from around mid-1985 levels by mid-2014 when Saudi Arabia started making waves; in fact one could speculate Saudi Arabia saw this full production recovery scenario and price trend recovery scenario and may be trying to replicate 1985, 30 years later, but I do not see how it will work in U.S. with fracing which is more of a manufacturing process, but may work with rest of world who still reply on big projects. Also Included here is a write up on 1985 oil crises. One other thing to notice on the graphs I developed and presented is it took around 1 year to steadily recover 50% of the lost price and nearly 14 years to steadily recover 100% of the lost price, but in that time period you did not have a growing Asia,etc. so if it took 14 years to recover 100% of the lost price this time I would be very surprised.

    http://www.investorvillage.com/smbd.asp?mb=4288&mn=157203&pt=msg&mid=14477602

  • moneyonomics moneyonomics Dec 17, 2014 9:44 AM Flag

    i posted the list provided

  • posting on iv mlp and bry boards you will have to go their to see graphs
    Is Saudi Arabia replicating the 1985 oil price crises?
    In my response to arb on the IV MLP board.
    We are in very similar situation as around Nov. 1985 when Saudi Arabia decided to defend production rather than price. Response of US oil prices was immediate in Nov./Dec. 1985, but US oil production decline response was around 3-4 months (remember majors controlled more of the US production at that time than today and fields being produced were larger and many still in primary oil). I am demonstrating response in graphic form with polynomial trend lines. First graph data starts Aug. 1985 thru July 1989 (4 years) and second graph data starts Aug. 1985 thru Aug 2014. What you will see volatile prices started responding in an upward trend around 9 months after Nov/Dec 1985 start to price crises and to production around 6 months after start of production trend decline (point on what I have been making about price returning to average moving trend lines), and US oil production had just recovered from around mid-1985 levels by mid-2014 when Saudi Arabia started making waves; in fact one could speculate Saudi Arabia saw this full production recovery scenario and price trend recovery scenario and may be trying to replicate 1985, 30 years later, but I do not see how it will work in U.S. with fracing which is more of a manufacturing process, but may work with rest of world who still reply on big projects. Also Included here is a write up on 1985 oil crises. One other thing to notice on the graphs I developed and presented is it took around 1 year to steadily recover 50% of the lost price and nearly 14 years to steadily recover 100% of the lost price, but in that time period you did not have a growing Asia,etc. so if it took 14 years to recover 100% of the lost price this time I would be very surprised.

    http://www.investorvillage.com/smbd.asp?mb=4288&mn=157203&pt=msg&mid=14477602

  • Whitecap provides revised outlook for 2015, maintains sustainability and financial strength

    CALGARY, Dec. 16, 2014 /CNW/ - In response to the dramatic drop in crude oil prices over the past six weeks, Whitecap's Board of Directors and Management felt it prudent and necessary to revise our budget outlook for 2015. Our capital program for 2015 will be reduced by 32% to $245 million from $360 million in order to maintain our financial flexibility and to provide continuous long term sustainability for our shareholders. The capital reduction will allow Whitecap to still grow production per share by 5% in 2015 and maintain the monthly dividend at $0.0625/share all within a total payout ratio of less than 100%.
    2015 REVISED CAPITAL SPENDING The proactive re-alignment of our disciplined 2015 capital program to adjust for the current commodity price environment allows us to focus on the most profitable projects with the highest rate of return within our extensive inventory of drilling locations. The revised capital program balances the need for quick well payouts along with strategic initiatives that are important to our long term sustainability..
    MAINTAIN DIVIDEND Our current monthly dividend of $0.0625/share remains intact and sustainable despite the recent collapse in oil prices and we anticipate maintaining our current dividend through these difficult times. Whitecap does not have a dividend reinvestment program and anticipates the dividend to be fully funded within internally generated cash flows. Based on our current share price, the dividend yield is approximately 7%. Given our disciplined approach to the dividend policy, our Board of Directors and Management have chosen to defer our previously announced monthly dividend increase to $0.07/share in January 2015 until such time as commodity prices recover.
    HEDGING Our ongoing risk management program provides us with the ability to withstand the current weakness in commodity prices and provides stability in our funds..

  • iv mlp Msg 44703 of 44710 at 12/16/2014 10:28:42 AM by

    massivad

    Baird dumps on the upstream MLPs

    Baird downgrades six upstream MLPs this morning. Baird slashed estimates, targets, ratings, and suitability ratings in the upstream MLP sector to reflect their outlook to collapsing oil prices. They’ve downgraded EVEP, LGCY, LINE, LNCO, MCEP, and VNOM to Neutral from Outperform. They state that upstream MLPs will have no choice but to cut their distributions if oil prices to not recover in order to realign their balance sheets with the new oil paradigm which, they see as remaining structurally lower for the foreseeable future. Best positioned is VNOM. Worst positioned is BBEP, EVEP, LGCY and VNR. They are assuming these MLPs will be forced to cut their dividends based on when debt covenants are tripped in their models.
    BBEP – 2Q’16
    EVEP – 4Q’16
    LGCY – 4Q’15
    LINE – 1Q’17
    MCEP – 2Q’17
    VNR – 3Q’15
    VNOM does not have a debt-forced DPU cut risk due to their variable rate distribution policy.

    Despite the horrendous drop, it is too early to bottom fish these names IMO. Crude oil needs to return to the $65 level and hold it for a few weeks before considering jumping into the fire. The bottom in crude oil will not be seen until 1Q’15 at the earliest. Tax-loss selling will persist until EOY.

  • Relates to topic we have been discussion on distributions and costs coming down to offset some of the price delcine

    Goldman: U.S. oil producers may boost output beyond highest rate despite price decline

    U.S. oil production may increase from its highest rate in over 30 years despite the decline in oil prices, Goldman Sachs Group said Monday. "Costs are falling nearly as fast as the price, which means oil producers can spend less to get the same or potentially even more in terms of production," it said. Producers are also shifting drilling rigs to lower-cost fields in response to the price slump, it added.

    http://www.bloomberg.com/news/2014-12-15/goldman-sees-u-s-oil-output-maintained-as-costs-sink-with-price.html

  • moneyonomics moneyonomics Dec 15, 2014 11:48 PM Flag

    looks like well in the low btu area so probably needs no processing or they would have added an "e" in the 59 mmcf/d and would have read 59 mmcf(e)/d

  • Do not jump off the cliff on distribution until you see what is below. A cut of deferral now is irreversible in longer term penalties

    http://finance.yahoo.com/video/oil-prices-rebound-within-3-223200011.html

  • a must listen to. the coxeadvisors web cast below, it supports the wait case on any distribution move. Why take the whole step now, it is very costly in the,longer run (ie if they can even do it yet as discussed before). the time for the price to recover from a cut or deferral is drawn out which prolongs and lengthens the impact on forward financing costs (new units or debt. If oil prices do not recovering in 5-7 months then can reduce or defer the distribution.

    http://coxeadvisors.net/november-28-2014don-coxe-oil-and-politics-a-toxic-mix/

  • HOUSTON, Dec. 15, 2014 (GLOBE NEWSWIRE) -- LINN Energy, LLC (LINE) ("LINN" or the "Company") and LinnCo, LLC (LNCO) ("LinnCo") announced today that LINN has closed the previously announced sale of its entire position in the Granite Wash and Cleveland plays located in the Texas Panhandle and western Oklahoma to privately held institutional affiliates of EnerVest, Ltd. and FourPoint Energy, LLC at a contract price of $1.95 billion (the "Granite Wash sale"), subject to pre- and post-closing purchase price adjustments.

    In addition, on November 14, 2014, LINN closed the previously announced sale of its Wolfberry positions in Ector and Midland counties in the Permian Basin to Fleur de Lis Energy, LLC at a contract price of $350 million (the "Permian Basin sale"), subject to pre- and post-closing purchase price adjustments. These sales are expected to be tax efficient upon successful completion of a reverse 1031 like-kind exchange.

    The Company intends to use combined net proceeds from these sales to repay in full the $1.3 billion term loan, which is the only remaining interim financing from its $2.3 billion acquisition from Devon Energy Corporation which closed on August 29, 2014, and reduce borrowings under its revolving credit facility.

    Upon closing of the Granite Wash sale and repayment of the term loan, lenders under the Company's credit facilities will complete the semi-annual redetermination and increase LINN's borrowing base to $4.5 billion and reaffirm the $1.4 billion borrowing base for LINN's wholly owned subsidiary, Berry Petroleum Company, LLC ("Berry"). Previously, LINN's borrowing base was reduced by $275 million in connection with its $1.1 billion unsecured notes offering in September 2014. As a result of the redetermination, the maximum credit amount under LINN's credit facility will be restored to $4.0 billion while the commitment amount under Berry's credit facility will remain unchanged at $1.2 billion. The maturity date for the LINN and Berry credit

  • ARP/ATLS 8k filing

    Two filings today, ATLS set the expected distribution of SPINCO to be $1.10. ARP gave new estimates for their distribution and coverage ratios for 2015.
    The filings are very short, I'd suggest you glance over them.

    In summary ARP expects to pay out $2.36 per unit for the year, resulting in a 1.1 ratio based on the following assumptions.

    Net production volume per day:

    Natural gas (mcfd)
    221,443

    Crude oil (bpd)
    7,179

    NGL (bpd)
    4,408

    Total (mcfed)
    290,964

    • Net realized natural gas price after hedges of $3.74/mcf (72% hedged)

    • Net realized crude oil price after hedges of $78.15/bbl (68% hedged)

    • Total net production costs of $1.94/Mcfe

    • Partnership management funds raised of $225.0 million for the year ending December 31, 2014 and $275.0 million for the year ending December 31, 2015

  • this is really a must listen to presentation by Coxe

    go to investorvillage mlp board under same subject line

  • moneyonomics moneyonomics Dec 15, 2014 1:37 PM Flag

    biggest issue i have with nrp oil and gas holdings is it does not appear they are hedged in any data I can find

  • iv bry Msg 156725 of 156744 at 12/14/2014 5:12:23 PM by

    imagery

    Why Senate spent the nite rushing thru the House $303T Dodd-Frank Gutting Derivatives Bill?

    "...Meet WTI-structured-notes... the transmission mechanism for oil-price-shocks blowing up the financial system...."

    http://www.zerohedge.com/news/2014-12-14/exposing-oil-price-shock-contagion-transmission-pathway

    http://www.zerohedge.com/news/2014-12-13/crude-crash-comes-wall-street-counterparty-risks-rear-their-ugly-heads-again

  • Reply to

    BPEPP?

    by bonzo6 Dec 13, 2014 2:06 PM
    moneyonomics moneyonomics Dec 14, 2014 5:14 PM Flag

    hyphy If I was counseling BBEP management I would suggest they be painfully prudent in their response to the oil price crash and be seen as thoughtful stewards of BBEP by not making quick decisions leading to unintended consequences, without exploring all options as they have went down the distribution deferral/cut path before.

    First to your point on cumulative deferreds which is another point I did not have room to get in my original message when I said "there are others considerations" and one I had in mind was the cumulative deferreds, by stopping the preferred payments before cutting the common below $2.08. I presume some of the QRE holders who retained their bbep units may sue and have a strong case if bbep cuts the distribution so soon after the merger from economic reasons (which was not one of the reasons for not moving the distributions to $2.08 in the merger agreement) before using all other options; as again the $2.08 was part of the merger consideration recognizing both companies were reasonably hedged into 2015 and that if oil prices dropped operating and capital costs would decrease. The oil price drop is into the standard deviation tail on the bell curve, but I again believe BBEP will need to, and actually want to, implement other cash flow savings options first not only for liability protection but also by cutting so soon it leave the impression the merger is a bust and bbep management is dilatory

    Second, again they are reasonably hedged for 2015 and I would bet the beginning of the year 2015 hedges are higher than the end of years as the hedge coverage they present is average and also their California oil is still at the slightly higher brent price.

    Lastly the recovery time in unit price will be extremely slow for a distribution cut, but will be more robust when oil prices recover and they will need to go into the market to issue new units and or to borrow and by depressing the price longer than needed it will make for expensive financing's.

  • Those looking for a new opportunity- DPM (7.35% yield)-55% fee moving to 70% in 2017 (80% of 45 % commodity exposure hedged in 2015)-Strong dropdown plans from LLC-GP (DCP)
    (fee moving up to around 65% in 2016 but drawback only 25% of 35% commodity exposure hedged in 2016)

    Combined GP and DPM are no. 1 gas processor, no. 1 ngl producer and no. 3 pipeline in country. Pay close attention to supplementary slides as it shows were drop-down potential emanates from

    Remember parents to LLC-GP are Phillips 66 and Spectra Energy

    http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MjYwNTI3fENoaWxkSUQ9LTF8VHlwZT0z&t=1

  • moneyonomics moneyonomics Dec 13, 2014 11:45 PM Flag

    marion on your second point (fourth sentence). there have been advanced economic papers written on the subject of deferring production after a well has been completed, in a low price environment, and based on the actual factors it has been demonstrated that generally the worse economic case is to shut in/defer production (in essence the case has been substantiated that deferred production in essence results in that production not being withdrawn until the end of the reserves life thus killing the NPV of the deferral)

  • I speculate BBEP can not reduce or suspend the $2.08 distribution at this point in time without being subject to a lawsuits from former QRE holders; unless they can concretely demonstrate their cash flow has been materially and irrefutably harmed at this point with their hedges in place, costs reductions that will come from lower oil prices, flexibility with capital budget, etc. In the QRE merger agreement they agreed to increase distributions to $2.08 as part of the consideration for the merger, unless related to terms of their partnership agreement or Delaware law, but did not specify due to a change in economic conditions and they have already declared the $2.08 so they were capable of doing it under Delaware law and partnerships agreement. I believe before they reduce or suspend the distribution from the $2.08 level they will first have to clearly establish their inability to economically make the distribution and that has not happened yet. First they can optimize capital expenditures. Secondly they will see C02 and other operating and capital cost reductions from the lower oil price and they are in process of trying to JV their Permian development program. Thirdly they are reasonably hedged in 2015 and from a macro perspective in the world of oil and gas prices both over and under shoot in response to an unexpected event and eventually overtime revert back to the mean moving trend line, which is still upward trending over the long term and not enough time has lapsed to prove oil prices will not revert to the mean upward trend. Fourth analysts have estimated at current oil prices level they can maintain an approx. 94 coverage ratio in 2015 before any additional optimization steps. So taking these 4 and I am sure there are others considerations into mind, I do not think there is enough concrete evidence at this point in time to reduce or suspend the distribution without subjecting BBEP unit holders to potential liabilities and it would distract mgt. from duties.

  • Reply to

    Cash flow coverage of 14% is ample

    by infinitidrivr Dec 11, 2014 8:04 AM
    moneyonomics moneyonomics Dec 12, 2014 2:33 PM Flag

    still no evidence of oil and gas price hedging on e&p asset purchases. being naked in this current oil price manipulation is a poor tactic

  • Reply to

    Why the rise in NAVB today??

    by soulfood51 Dec 12, 2014 2:11 PM
    moneyonomics moneyonomics Dec 12, 2014 2:21 PM Flag

    dec 15 update on mancocept

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