I hope ur right but, I can find only 2 more years of solid hedges, afterwards they taper off. Where do u see 5 years
Hedges are relatively good till 2016. After which they rapidly fall off. Only co that I know off that is protectied till 2018 is MEMp
What an intelligent post. however remember, "It ain't over till the fat lady sings". This chat room has got to be the stupidxxt board I've ever seen.
Being down when the the dow is up 300+ points is not a good sign. No reason for the stock to be down except there are more sellers than buyers. AFAIK, the story here is still intact. Thinly traded stock.
Excellent analysis. Regarding your conclusion I noticed in their last presentation, they stated that the dist. coverage ratio was 1.17 for unit holders and .95 or so, for the general partner (for the third atr)
No one knows what the cut will be if any however, I doubt they'll be 25%, more like 5% looking at the latest presentation. where they chart their sensitivity to oil prices. . If they do need to cut, the market will not react negatively since it'll be due to the global current oil situation and not company specific. Meanwhile its a good day today for the longs, 2nd highest % gain of the universe of about 60 mlps today.
It took psxp 5 months before its first drop down. imo, the $ rise is speculation that we'll get a drop down soon.
I agree. Take a look at the LGCY Dec wells forgo presentation slide 5, It shows that in 2008 , when oil plunged to $40, they maintained their dist. Same type of E&P mlp, slow decline, long lived assets. So, it can be done.
I read an article where Harold Hamm - one of the smartest operators around who started Continental Resources and really got the shale boom going - actually cashed out of ALL hedges for a monster gain because they see these prices as unsustainable and they want to fully participate in the inevitable price rise. T. Boone Pickens sees oil back over $80 by the end of the year. The Saudis see oil back over $80. There is a miniscule supply/demand imbalance with global production at 93.8 mbpd and demand at 93.3 mbpd. That's a mere .5 mbpd difference which can be corrected pretty quickly - lots of domestic producers are already scaling back and many shale wells deplete rapidly so the supply side will balance in the near future.
Regardless what the media is blaring demand is still at the highest level EVER - look at any chart and nothing but a solid uptrend line with a tiny hiccup down in 2008-09 when the whole world was in panic. Oil and gas will be primary fuels for decades - renewables are less than 2% of global energy supply today even after decades of installations.
In short, this oil price plunge is ridiculous given the overall demand picture and in my opinion mainly orchestrated by hedge funds and traders - NOT driven by economic fundamentals. The bounce back to $80 or better is inevitable - the only question is how long it may take. Less
This msg is from the BBEP community. I thought is was worth repeating here.
Saudi Arabia has a 17%, $39 billion, shortfall on their budget because of the price of crude. They also had a 35% drop in their stock market. SA is not the kind of country that can work their way out of financial problems.. They need oil revenue.. I think they will be doing whatever they can to get the price up soon... The tough talk about not caring if oil goes to $20 is just a bluff.. They care... Less
So let them increase their revolving credit facility. Their Debt to EBITDA ratio is 3. Siimilar E&P mlps operate on a ratio of 6( MEMP, LINR, EVEP,). The norm for all mlps is 4. They can easily increase it. Don't forget, their production cost is $14/barrel. picked up some more shares yesteday at $6.95. 29% yield, insaaaaaaaaaaaaane........