If they can show at DCF at above 1.1 and growing potential,
regarding the latest acquisition and on several other fronts
this stock should be $24 in a hurry.
There is going to be many opportunities to bolt-on to existing
assets and they are small enough that $200 million deals make a difference.
We could get to $25 this year if the LP raise are going well and they get the distribution to go to $2.60 or .65 quarterly...end of year quarter.
In 2015, ARP could be a $25+ stock with an 11% distribution yield...yes,
that's $2.75 a share....All it needs to do bolt-on wisely, and execute reasonably
ARP is a "show me" stock.
We have a very competent senior management team with
unusual opportunities (such as the public LP program)
for an upstream MLP. However,
we also have a somewhat reckless CEO, completely driven by
ego which has hurt credibility. Last year's purchase of those methane
beds with a 9-1/4% loan rate shows its stupidity.
Imagine had we purchased more assets in the Barnett, or beat
BBEP's purchase of those oily assets with growth attached?
I believe that there is a good chance of doing very well with a mid- 20's stock price and an
11% yield to complement. I hope we make some smart, smaller
aquistions going forward and simply execute.
Ed Cohen should retire or be fired. We could apply those millions in compensation
I think the year end tax selling ended yesterday for this stock.
Looking forward to a great year back to mid 20's and small, but
significant acquisitions going forward.
I have been listening to the calls and today's conference as well.
My assessment is that the President, CFO and Operations senior
manager are all smart. If we can hedge well into the $4's, even the latest
acquisition is a winner. I think there will be many opportunities to increase
DCF going forward. I think the board and the competent management of ARP
will keep our Sociopathic Chairman from acting stupid.
There is still a lot potential: The new growth entity will lower our G&A as they share
services, and we should get some kind of carried interest and perhaps some cash which
will allow ARP to increase drilling for its own account.
The problems with transportation, infrastructure and that plant fire will recover in the next quarter which will be very helpful going forward.
They should layer on NG hedges through the end of 2018 at above $4 for all of their base production.
They will only be able to do small deals until the stock price increases which is a mixed blessing. It looks like the operating team is solid and strong at ARP. They need to get the coverage to 1.2 and slowly increase the distribution each quarter from here.
The SG&A drop from the new entity will be helpful, and we should be "carried " in exchange for our land in the PUD drilling on the carve out.
That would be highly acretive. Let's say ARP gets a 15% royalty interest
for our land...along with hopefully increasing public partnership raises.
Yes. They can not use equity for acquisitions below $23,
therefore, they will have to bolt-on, drill existing inventory,
and manage the company for growth. We all know that
their goal is to get into the high splits of above .60 a quarter.
We are aligned in that way, and they are restrained from doing
large acquisitions....I feel good about that.
Much of the increase in income from the many of the big wells did
not hit until mid-way through the 3rd quarter. Given oil production growth as a
percentage of mix is increasing with prices over $100 a barrel, and NG prices above
$3.50 for our marginal and unhedged production of these monster wells, ARP should
have a great 3rd quarter and the 4th quarter will be even better if they execute.
The 4th quarter should be at .80 cents with a .68 cent distribution.
This would put us at a 1.17 ratio which is healthy.
With that kind of coverage they actually have extra funds to increase drilling or reduce the
As important will be the public LP raise, and we are looking for at least $150 million.
And updates on drilling and net production rates...I'd like to see a 280 mmcf per day
exit rate equivalent for the 3rd quarter and 300 for the 4th quarter.
I think ARP had a distribution coverage of .65 in the second quarter. I would expect
to see .75 for the 3rd quarter...If so, a .65 cent distribution will be met.