After watching very carefully, and each event in the last few years it is now obvious that the Cohens' have enriched themselves in every way practical. They have not been honest with their true intentions along the way and Cohen has NPD.
We have been duped. No examples are necessary, but apparent to any financially educated and experienced investor.
The company is smaller now with the sale of midstream.
They have low leverage and they should be able to high grade
and streamline. They need to make good acquisition to lower decline
rate and increase cash flow to keep distribution stable. They should make
an acquisition in the $200 million range.
I project about $600 million for the midstream.
This should support $1 of distribution after reinvestment.
This should make the $2 current distribution secure even with little hedging going forward.
If commodity prices drop again, EVEP could settle at $12 which
would be an amazing bargain, even if they need to reduce distribution
one final time to about $1.50 in 2016. I expect a sale of midstream at around 12X - forward cash flow or approximately $600 million.
Yes, even with this price and reinvested, with the hedges reducing in
2016, they may reduce the distribution to approximately $1.4
and I would want to own it at $10. Hedges drop off after 2016 and they
may have to further reduce distribution to $1 if NG prices are under $3 for the
intermediate term which is projected. These projections include an approx 500 million
dollar reinvestment of proceeds later this year.
With the potential of drop downs from parent and the new Enervest fund participation for EVEP, they will be able to reinvest all of the 575 million this year.
When you put together all of the parts, such as ngas under $3 and oil at perhaps $60 along with hedges falling off in 2016, even a good $500 million acquisition might generate $60 million of dcf in 2016. Therefore, I think they may reduce distribution to 12 cents a month by mid 2016. They will likely be under a 1 times disty coverage this year even though they projected 1.15 recently.
All partners of GS past, and present should have all wealth captured and redistributed into affordable housing for millions of gentrified outcast workers. We are talking about 1 trillion dollars.
I think that EVEP with their strong position
in the Barnett and significant drop-down position
going forward, that they will survive.
Even if they cut from $2 to $1.44 (which is my estimate
reduction if gas and oil stay down) would yield a 12%
return, if it dropped to $12 a share.
I expect another 20% reduction in field service costs and the
company will even reduce g&a as they grow incrementally from here.
I like EVEP, but lower.