My research looking at FCEL and PLUG shows that although both are involved in PEM, PLUG is targeting the forklift market and FCEL is more into power generation.
It appears to me that both are generating lots of interest because they are into PEM. I believe that PLUG is targeting too narrow of a market and FCEL business model is, my view, targeting a wider market that may be having wider acceptance and faster growing market.I am invested into FCEL and question the viability of PLUG over time?
The economic comparison between PEM forklift and battery operated forklift , the 3 types, makes PEM forklift more expensive to operate. This may not be the case for power plants PEM type generation which would provide power to a wide range of electric user.
True, but it is also the percent invested versus the rewards. With GE you invest a large percentage of your capital and get small some what guarantied reward. In many cases you cannot diversify. With PLUG, FCEL and BLDP you invest small you diversify and you may get big reward. So far I am 20% in PEM cell fuel.
You are right, it is the future potential of TSLA that is attracting and the stock goes up. Amazon is the other stock that has not shown any profit. Or to be exact there is no profit because Amazon reinvest all the cash flow into new facilities and product lines. Plug and FCEL may very well do the same. More cells in service will reduce the cost of production. Accessibility of refueling any where and quickly will bring down the cost with more units in service. None the less PEM cell are more expansive that standard batteries. So this is betting on the future, worked for Amazon and TSLA why not PLUG and FCEL.
All Trusts have an end of life, when there is no more O or G to sale, the trust is done. In the case of WHX and WHZ there is a declared end of life. So what is the problem! Dealing with WHX is playing dice, Vegas has probably better odds!
APA is probably the highest volatile stock in the O&G sector. You buy and you watch every minutes until you sell. I buy in the morning and sell by 2PM. None the less a good stock!
The refiners may be better off than the EPs. The refiner’s profits are based on the crack spread. The EPs have fix expenses and have sales limited by the WTI index with a discount some of the time. EPs have little room to keep their margin. On the other hand the refiner’s expenses are fixed but the crack spread still works, it may be less, but they have more room to keep their margin.
Should the WTI get to $80, EPs have to produce more but can the infrastructure design allows a 20% increase. EPs are worst off; the refiners will still make a profit, smaller but will make a profit.
My beef with “legalese” is that although the thinking is logical, in practice it does not work. Using WHZ as example: In producing oil or gas there is a cost associated, the equipment as to be kept in working order, at the extreme an old Christmas tree can, if not maintain, produce a blowout. A $50 ring between a valve and a pipe flange not properly tighten to the proper foot/lbs will cause a leak and ultimately a blowout. This is a small example, but checking the equipment is a cost. As long as the cost of producing is less than all the administrative and maintenance cost, including a profit, WHZ trust will stay alive. At some point, although oil or gas is potentially available to be extracted, the cost does not support the potential production.
Conclusion, yes it is the volume produced and/or the termination date. It does not mean anything but a devious way to make units holders think that WHZ is still in business and profitable. WHX is at this predicament, Las Vegas, probably, present better odds to make a profit.
Liza, you contradict yourself. the date is the real condition! WHZ will be no longer profitable after that date. Something like WHX but different.
ALDW is modifying the Big Spring refinery to increase profits and market share. I keep my stand on the rural market been more diesel than gasoline. If you look at the Texas ALDW market US I20 is the main corridor with traffic. Big Spring is close to Midland, the fastest growing area of Texas. My guess is that drilling in this area is booming and diesel is the preferred fuel. Drilling in shale play never stop, it may last for years. Yes ALDW once modifications finished will be attractive.
I believe we have to understand what an MLP is. I am one of those that strong believe that MLP is the way to raise capital. Bank loans are passed history, first you have to pay interest and repay the capital. With an MLP the distribution is, really the interest, but the capital is not repaid. MLP allows the Earnings Before Interest, Taxes, Depreciation & Amortization ("EBITDA"). Bank load do not allows this pass on technicality.
ALDW market is limited, my take. Rural markets are more diesel than an urban market which, my view is more gasoline. ALDW is making a change in the refinery to produce more diesel, from light crude API 48/55, which is the local crude in the Permian and Eagle Fort area.
ALDW does not want to barrow money or dilute the MLP outstanding units. So the stretched the cost of shutdown over 2 quarters. No reason to buy ALDW until the shutdown is complete, around $10/$11.
So the distribution is $0.18 on February 20th. Not much but without a crack spread significant it has to be expected. ALDW does not have the exposure of a Philipp66 for example. The market ALDW is present in north Texas from Big Spring to the New Mexico border. The principal urban areas are Lubbock and Amarillo the rest is rural stations. I drove through the ALDW market area last summer on my way to California. I found some of the 7eleven not too attractives. I did not pass through Lubbock and Amarillo so my report may be baits.
ALDW is getting it feed stock from the Permian and Eagle Fort. This crude is not standard WTI it is in the API 48/55. This is the reason ALDW is using all the WTS is can found. With the new pipeline the WTS price is up because GOM refiners prefer WTS because the export market is diesel. ALDW big Spring is in the process of updating the refinery with equipment that will enable the production of more diesel from lighter API crude.
My guess is that ALDW does not want to increase the number of units through an IPO. ALDW prefers to push the turnaround shutdown one quarter and split the refinery modifications over two quarters. The engineering and equipment purchase Q1 and the construction phase Q2. Therefore this Q1 quarter has an 18 cents distribution.
In the above post I used the word "Amortization" I should have used the word "Depreciation".
Since the Frank/Dodd banking regulations, not totally published as yet, the way to raise capital has change. The days when a company would take a loan and pay it off are long gone by. Banks are restricted to loan money; they have to set aside a reserve to mitigate the risks of defaults.
Companies wanting to develop a project set aside assets representing the development and IPO on the bases of future earnings. The cost of the IPO is a onetime cost, the distribution is was would have been the interest payment. The capital is not paid off it is amortized only.
Contrary to a US Royal Trust, the asset of a MLP can be modified, sold, purchased at will. The distribution of #$%$ Royal Trust must be set at the time of the IPO. For the MLP cash flow will suffice to generate a distribution. MLP asset can be future wells and a pipeline, compressors stations already in activity for sometimes. An MLP asset can contain an independent company, the case with KMP.
I am not surprise to see Devon and XTEX setting up a MLP to raise capital for a project. Both parties are winners, and the hard assets can be amortized before taxes and passed on the units holders.
Who needs a bank!
Yes there is the ad-valorem tax. This tax is based on the value of the trust in term of assets and sales. #$%$ Royal Trust diminishes in value since the volume to be produced is less every quarter. This ad-valorem tax should diminishes as well. Since January 2012 MVO unit price is down 50%, the tax should reflect this loss of value.
Yes, if you use the dates published. But if you use the average production versus the max published production I get 20 left.
Liza and I do not agree, she stand fast of the publish dates. My question is what will be left to produce? These dates are in contradiction with each other. If the closure date is the date why mention the max production. If they assume that the trust can produce beyond the max production, why mention the max production.
Per my last post, long WHZ is profitable, but you loss at list 50% of the dividend because WHZ price close at xdate lower than the preceding xdate. So far it is the case. Naturally during the 90 days between the xdate WHZ price will go down in the lower or mid $12.00. Seeing your position losing 10% or more is rough on the hedge. I am out for at least 60 days.
The price loss of WHZ from xdate to xdate represents 1/3 to ½ of the dividend. It is still profitable long. I expect the May xdate price to be $13.15 down from $13.89 of last Friday. At some point the NG price may start to be relevant. The Henry Hub was $7.70 last Friday; the US reserve will be depleted so price may stay in the high $4.00. On the other hand, crude price will drop.
Trusts are not as cumbersome as MLPs. You may not have a tax nightmare. As for the timing, you have to take into account the 3 day rule, which means you have to keep a large percentage of your money free to be invested. not always possible.
The cash flow of a trust comes from the sales of what is produced. All expenses have to be deducted from the sales. What is left is the distribution. The operator expenses includes his profits. The distribution is divided into the 2 types of units, that all. Some trusts have elaborate calculi to figure out the distribution, such as BPT. WHZ is putty simple.