the presentation says "Potential to exploit additional horizons across play (Buda & Austin Chalk)" believe what you want....
a) Are you sure they own the rights to BUDA? They stated such in previous presentations and CCs but noticebly absent in the last Qs. I would not take it for granted that they actually own those rights.
b) Study the BUDA. It is quite fickly and can not be fraced (limestone, I believe?) One has to find natural fractures and sweet spots are more like sweet dots.
c) KKR gets to participate in farm outs and CHK gets to buy back in if I recall
d) Look at the map and see that there are not a huge amount of sections in the author's sweet spot
My point is ya better do some serious HW first. Having the article come out the day it hits a huge low, sub $5 is interesting to say the least
he bot contango because they actually have some decent properties and know how to drill....
don't get fooled again! no, no, no
i don't think shorts are adding but neither are longs or any new cash...and the street is still soggy with paper from the blow out and needs to discard before year-end (+ tax loss selling).....
artsbest - i think u got it right, simple as that. A lot of cats have gotten hung on the NG trade. KKR and folks took TXU private as a bet on NG and plewwy, its about to go bust big time....i think wilbur and prem are just willing and able to double down...if NG goes above $5 in '15, then this could be back to high single digits BUT alot depends on Marcellus and what its really worth.....
lets say a company has a net asset value of 10, generates 10% returns but takes 90% of the profits (call it egregious, LLC)....would u still say it should trade near NAV?
KFN is more diversified than just CLOs - they have o&g, cmbs, and soon maritime finance. CLOs are not far more risky - they have senior secured debt underneath them and, in the end, it is no different than buying the debt outright with leverage. Basic stuff. The fact that FSC takes 40% of net income in fees should be enough said.
Many CLOs have senior secured debt underlying them and are overcollaterlized. The only difference between a sub investment in a CLO vs a direct investment in the senior debt underlying it is that you parse the cash flows into something that gets a AAA, which insurance cos. and the like pay a premium for, and the sub tranches. So in effect, you "steal" some money from the guys that want AAA. Your statement that: "Investing in subordinate debt within CLOs is far more risky than investing in secured debt" is very misleading
wise man - does the likely bankruptcy of TXU with KFN holding 300+ mn concern you? Seems like she tanked on big volume the day after S&P report (thurs post close) ?
they are levered and long-rates are rising. Better off buying a small basket of liquid prefs and save the 1.6% manage fee.....
what is the logic of starting coverage when he's been on the CCs for as far as i can remember.....he did seem buddy, buddy with Mr Miller - at least until the last call
you really need too read the financials - here is a snippet: " As the majority of our assets and liabilities include floating interest rate provisions indexed to three-month London interbank offered rate...."
what's your argument again?
yield up, price down....is that what they taught at wharton? impressive
to bad they didn't teach u what the duration of a floating rate note is