forgot to mention I also hold a much smaller position in Linn so I could get the Houghton play. In my 25 years in E&P I found over the long run it is better to be roughly commodity balanced with a little heavy on liquids, so in the three MLP holdings composite I would say production wise I am approx 55% to 60% liquids and 40% to 45% dry gas
I hold both bbep and arp. from a balance perspective. They a hold a composite portfolio that encompasses some of the better US conventional fields and still keeps me in commodity balanced so get a better overall balance holding both
jim thanks for timely and informative post. coincidental but my personal mlp weighted average target is a 6% current yield with a 12% cagr target
OT: ny coincidental but informative on average yield expected by private equity firms and upstream MLP's from bbep yahoo board
jim_hairball • 20 hours ago
WF take on BBEP / QRE
Why No (Institutional) Love For Upstream MLPs?
• Waving The White Flag? BBEP’s announced acquisition of QRE on July 24,
2014, caught our attention. Why is QRE selling? As a private equity sponsored
upstream MLP, Quantum Resources seemed like an ideal candidate to own an
MLP. Rather than sell mature properties in the third-party market, private equity
can sell to its own MLP and participate in the full cycle economics of a given
property via LP and GP ownership. Instead, Quantum Resources is selling its
MLP and will have no formal relationship to continue dropping assets into BBEP.
So did Quantum Resources give up on the upstream MLP business model?
• Why No (Institutional) Love For Upstream MLPs? This brings us to a
larger question about upstream MLPs. While most of the MLP sector has seen
greater interest from institutional investors, this has not been the case for
upstream MLPs (excluding Linn Energy, upstream MLPs are held 20% by
institutions compared to 34% for the broader universe). We are somewhat
surprised by this. As traditional midstream MLP valuations get bid up and yields
contract, upstream MLPs are one of the last areas of the sector that still offer
attractive yields. Given the formation of so many closed-end funds that need to
generate sufficient income to support their own roughly 6% yields, we would have
expected capital to flow to this subsector (much as it has to other higher yielding
mwe, ngls, bbep, dpm, etp,enlk, arp, apl, rgp, line
6.1% current weighted average yield,
11.5% current weighted average CAGR
my goal from a weighted average npv return perspective is to target a cagr at least twice current yield, so I am close to the target but not quite there. if arp performs as they project for a couple more quarters and bbep acquisition of qre is successful their cagrs should improve which should achieve my target. as with you not a recommendation just my perspective
any thoughts here
yahoo erases any messages i post with a ling. go to search engine and type in investorvillage (all one word) and you will see a join tab. hit join and may get a second page and hit join again then hit free basic membership
If they pay 10 cents distribution based on $3.9 mm ongoing operating cash flow, it will partially come out of borrowings. If it comes out of borrowings after having stopped paying it for two quarters why in heaven sakes would a discerning BOD approve it just to say they paid a distribution?
eus they dismantled the company so now their goal should be long term growth. "If" the $3.9 mm is correct as ongoing DEF base, then they can only pay $.02 to .04 quarter out of operations or maybe even a nickle then why pay anything becasue at a nickle and it traded at a 10% yield based on yield then with value added in for rgp units it could trade around a $3.00 price anyway, so why not pool the distribution and re build the assets then come back later with a healthy distribution. bbep did it a few years ago and yes it took time to regain investors confidence they came back stronger than ever
jbc my observation.
I retired from a major after 25 years (also had 5 years in minerals). Tried other areas, reits, etc. but always got surprised as I could not read between the lines for what was not being said. I concluded I would stay mainly with what I knew best; which was energy (maybe a mineral here and there), as with my experience one can read between the lines more times than not on what is "not being said" which lowers the risk somewhat. JMO. also in my energy investments I try to cover prime geographic concentrations/areas with both E&P and MLP's pipes/g&p's and I see energy as a necessity commodity for the rest of my life
thanks nosweat i found it, good analysis. it appears the issue was mostly in Permian (plus gas, etc) in second quarter and not so much postloe. they made commitment again to have Permian rectified by end of year and be at committed exit volumes. we will see if they can do it. i would suggest 3rd quarter will be closer to 1 but still under. close to 1 market may still be forgiving but if not agree will take a haircut
once speculators jump in no telling where price will land after a few weeks.
$300 mm rgp units plus levering up with $300 mm more debt will buy some, but not significant high value liquids reserves. will buy more dry gas reserves but with current futures price deck will not get equivalent near term cash flow. My questions is at the dcf unit in press release why pay any distributions? Why not sell scoop, pool their operating cash 9DCF) for a few years and use $600 mm plus pooled cash plus scoop proceeds and re build themselves before paying any more distributions?
Second Quarter 2014 continuing operations Financial Results
Reported Distributable Cash Flow from continuing operations of $3.9 million as compared to the $4.6 million for the first quarter of 2014; however final chart shows $9.8 mm adjusted whatever that means.
$3.9 mm divided by 156,650,000 (unit outstanding) = $.02
$3.9 mm divided by 102,780,000 (unit floating) = $.04
$9.8 mm divided by 156,650,000 (unit outstanding) = $.06
$9.8 mm divided by 102,780,000 (unit floating) = $.10
ny as always thanks for taking the time to share. I have no strong conviction to share as I currently see most all of the infrastructure mlps as too rich to start a new or increased position except maybe etp/ete/rgp group (my question on mmlp and I did restart a position in rgp and added a little to etp). I do think ARP (E&P MLP) yield is priced too high in the 11% range and could possibly see a 15-20% price gain in price in next 12 months if they meet their started targets in production/distribution growth, energy prices stay reasonably consistent, etc. and no world calamity