That is why you should not buy this MLP hoping for price appreciation. This MLP is a buy and hold for the distributions and lower tax rate associated with qualified distributions.
Over 80% of the Earth is Ocean or land that is uninhabitable for humans. The average ocean temperature can go up by 1/2 a degree while average land temperatures drop over 1 degree and it would still be global warming.
The Financial times has an article speculating that it will drive down WTI and may be real bad for spot prices if cushing gets filled to capacity before this refinery comes back on line. Spot Bakken oil closed at $31.96 on Friday.
One of the biggest ports in the world is out of commission that was handling up to 300,000 dwt of tanker oil a day among all the other imports and exports.
That will leave a mark.
In the 1990's when CHK was a much smaller company than today, they dropped from $30.00 in 1996 to 80 something cents early in 1999 before recovering. I bought some at 15/16ths of a dollar. There will be opportunities like that again in the oil patch in the coming years.
The crack spread in the Southwest market is currently $39.00 + and part of their production goes to the Southwest market. They are enjoying the same supply and demand anomalies that CVRR enjoyed 2 years ago when the Midwest had an unusual number of refinery outages, but CVRR was running at capacity.
I didn't say I didn't like the company. I just don't like it at this price. I too have a clean balance sheet and significant leverage I can use when the time is right.
All I know is that spot bakken oil was selling for $34.12 at yesterdays close and the guy who sells a stock at $30.00, rebuys at $10.00 will make 900% more than the buy and hold guy when it returns to $30.00.
If Yahoo is correct, lol, they had 59.69 million on March 31st and their levered free cash flow trailing twelve months was negative 69.0 million. If they continue to burn cash at that rate they are out of cash around March 2016.
I sold everything I had this spring with the exception of 1 refining MLP that I would like to hold forever. In 1999 I was able to buy CHK at 92 1/2 cents and this one at 6 cents if I remember correctly. This cycle I'm making sure I have the liquidity to load the boat when similar opportunity's present themselves.
The last time this happened, the cycle lasted 4 years, 1996-2000, and we are just approaching one year on this cycle. It will probably be longer this time thanks to advances in drilling and extraction technology the past decade and the current money for nothing fed policy..
There is much pain to come in the oil, gas and exploration segments.
The "gods" were aliens and writings from thousands of years ago have been misinterpreted .
Unfortunately for us a rogue alien had an indiscretion, flucked an ape, and we ended up with Lakeed98.
In my opinion all those with floating storage will be liquidating their positions before this leg down in the oil market wipes them out.
It will be good news months or years down the road as low oil prices will stifle alternative energy sources and SUV's will be selling like hotcakes with low gas prices.