While I agree with your near term conclusion,there are 3 clues that you don't have one.One 1q earnings are more than a month old.Two,I will assume you meant E&P (exploration and production) and not R&D (research and development) Three,Exploration spending is derived from Capital Expenditures,not Working Capital.......And while I didn't number it Debt level is relatively low when you figure in asset sales that haven't hit the balance sheet yet..And I can't find the numbers that would indicate heavy short selling although it may be happening and not yet reported.. But if I where short I would talk my book too.
Pretty clear they will swap PAA stock for PAGP and the IDR'S will go away..They stated today that the most likely outcome would be a structured tax-free exchange and a flow-thru entity....Price to be paid to PAGP holders is the additional significant variable....as well as the Dist.to be paid by the merged Company that will solve the Coverage issue..
Good news is while spot rates are pressured,Contract rates are not....therefore no impact on all but one uncontracted Vessel
The accreation from the Drop the offering Financed should result in a nearly 50% increase in current (ltm) annualized DCF....WHICH TRANSLATES INTO A SIMILAR INCREASE IN DISTRUBUTIONS.as we move forward...6%PPS HIT TODAY makes little sense.