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Inergy, L.P. Message Board

richardleeds 17 posts  |  Last Activity: Jul 7, 2014 8:15 PM Member since: Apr 1, 1999
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  • Reply to

    TOTAL BAN on horizontal drilling

    by natty_0ner Jul 4, 2014 1:35 PM
    richardleeds richardleeds Jul 7, 2014 8:15 PM Flag

    Nonsense. Show us your brain power before spouting off or do your research first.
    PM - from $33-91 a share and dividend from 40 to 94 cents since 2000.
    Lorillard- from $19 to $65 a share over last 5 years, dividend from 30cents up to 60 cents.
    Reynolds-$4 a share to $60 a share since 2000 for a 1,000% return, dividend up from 20 cents to 67 cents for a 300% increase.

  • Reply to

    TOTAL BAN on horizontal drilling

    by natty_0ner Jul 4, 2014 1:35 PM
    richardleeds richardleeds Jul 7, 2014 1:54 AM Flag

    tobacco at risk? Give me a break. The dividends paid by the tobacco industry to its shareholders have been the greatest over the last ten years in tobacco's history. Same goes for the value of the companies.
    These tobacco multinationals own interests in cigarette companies all around the world. Have you ever heard of China? Five times the size of the U.S. with the greatest per capita consumption of cigarettes on earth.

    You really think the oil and gas industry is at risk? Carl Icahn is the largest individual shareholder in this company. How do you think he got to be so rich? Investing in companies that offered the best returns that is how. You do not become one of the wealthiest 50 Americans by being stupid and he did it by investing smart. That is why he owns more of CHK than all the posters on this message board.

  • There is a reason that CMLP is paying 9.25% on the preferred issue, the balance sheet debt.
    Linn Energy which I own a pile of is only paying 6.5% on its debt and expects that to drop with
    the Moody's upgrade on Linn Debt.
    CMLP has too much debt and this preferred issue is really the same thing with a very high cost.

    I would stay away from this until there is a market correction and they get the debt under control
    and demonstrate the ability to pay less to finance expansion. There is a reason that CMLP has
    to pay these high interest rate/dividend rates on debt/preferred.

  • Reply to

    Wells Fargo energy analyst implies Linn overpaid

    by richardleeds Jun 30, 2014 12:26 PM
    richardleeds richardleeds Jul 1, 2014 1:22 AM Flag

    If you look closely, it appears Devon told its shareholders and analysts that they expected to receive between $1.2-1.4 billion. How is it that Linn Energy was pushed into paying so much more? That is what Linn investors should be asking.

  • Reply to

    Wells Fargo energy analyst implies Linn overpaid

    by richardleeds Jun 30, 2014 12:26 PM
    richardleeds richardleeds Jun 30, 2014 7:38 PM Flag

    Shaman, you said you talked to your broker at Wells Fargo and told you his analyst had not commented on the transaction. I suggest you read the following from Barrons today and the author's quotation from Wells Fargo's David Tameron.

    Before you tell me to go sell fish, whose the one here that smells. One of us is very accurate, you, your broker or me? I think Levisohn and Tameron at Barron and Well's Fargo would say its not me.

    Suggest you read the article at Yahoo Finance, Linn Energy from Barrons

    "Linn Energy Buys Devon Assets: Assessing the Deal"

    By Ben Levisohn

    Devon Energy (DVN) agreed to sell non-essential U.S. assets to Linn Energy (LINE) for $2.3 billion today, helping it further its transition from natural gas to oil.

    Bloomberg

    Wells Fargo’s David Tameron thinks Devon’s got a good price from Linn Energy:

    …headline number ahead of expectations; the transaction went off at ~5.1x 2013 EBITDA for majority gas assets (275 MMcf/d, ~1.2 Tcfe of reserves). Not surprised the deal beat our $1.1B estimate which we viewed as conservative, but based on recent conversations with investors, proceeds also above high-end of expectation range (we think Street was modeling $1.2$ 1.4B). The divestment helps further delever Devon Energy’s balance sheet; management expects to reduce net debt by ~$4B by year-end. Overall, we view the transaction very favorably as it should be wrapped up sooner (we modeled Q4) and at a higher price than expected. As a reminder, we recently upgraded shares to Outperform and we continue to recommend the name.

    Tameron updates his note:

    We received a few questions following our thoughts on DVN’s transaction. Primary question was on the EBITDA multiple; to clear up any confusion, the 5.1x we referenced below was based on aftertax proceeds. Using the $2.3B pretax figure, which is more appropriate, results in a 6.6x multiple (based on 2013 EBITDA provided by DVN).

  • Reply to

    Wells Fargo energy analyst implies Linn overpaid

    by richardleeds Jun 30, 2014 12:26 PM
    richardleeds richardleeds Jun 30, 2014 2:56 PM Flag

    I am not griping. Merely pointing out that Linn Energy was paying top dollar in the sector for Berry and Devon according to analysts that follow the sector.
    Most energy companies including Devon and CHK have been attempting to improve the debt equation of their balance sheets.
    Linn has not joined the crowd. Without excess cash that debt number grows which CHK eventually found out when its share price cratered in half.
    It is a lesson all energy operations should pay attention to.

  • Reply to

    Wells Fargo energy analyst implies Linn overpaid

    by richardleeds Jun 30, 2014 12:26 PM
    richardleeds richardleeds Jun 30, 2014 2:51 PM Flag

    rrb,

    I buy what you are saying but the cost of money to Linn Energy and for everyone else is going to increase when the FED gets off this cheap money environment. We have been in a very cheap money environment.

    Cheap money is keeping housing from cratering but how long is that going to last to the detriment of savings, etc.?

    All financing costs eventually go to the norm which in my book over the last 50 years is about 3 points higher on everything including Treasury paper and T-bonds and all other debt.

    Linn caught a break on debt costs and hedging about 4-5 years ago. That is going away.

  • Reply to

    Wells Fargo energy analyst implies Linn overpaid

    by richardleeds Jun 30, 2014 12:26 PM
    richardleeds richardleeds Jun 30, 2014 1:52 PM Flag

    what the market might be saying is that investors are not all that bright. So tell investors if Linn has the ability to pay off every increasing debt when all cash flow goes to the distribution and capex.
    Eventually the reserve life catches up with you especially as you increase debt every year.

  • Reply to

    Wells Fargo energy analyst implies Linn overpaid

    by richardleeds Jun 30, 2014 12:26 PM
    richardleeds richardleeds Jun 30, 2014 1:50 PM Flag

    Say what you want but Linn Energy has around $10 billion in debt.
    They use all cash flow for capex and distributions. How will that
    debt be paid off when all the debt number does is grow year after
    year and cash flow does not increase to cover anything but the
    distribution and capex. What is a business that demonstrates no
    capability to pay down debt. Try doing what Linn is doing in your own
    financial affairs.

  • The energy analyst said they expected Devon to receive $1.2-1.4 billion for the production/acreage.
    Linn paid almost double.
    Also Linn has to borrow the funds and pay interest on the borrowed money until they close
    a transaction to sell around $2.5 billion in leases/production assets to cover this purchase.

    It looks to me like Devon got the better end of this deal.

  • Reply to

    They could boost share price 50% with ONE well

    by margin321 Jun 16, 2014 10:34 PM
    richardleeds richardleeds Jun 20, 2014 6:14 PM Flag

    The Three Forks might be the best land that Lightstream has an interest in and it has not been exploited. Let Crescent and the others drilling in the Torfquay-Three Forks prove up the value and then in 1-2 years Lightstream can drill the area. If the wells pay off in 1 year as indicted, this would be a game changer for Lightstream and the shares could return to the former highs in 1-2 years.

  • Reply to

    Will Chevron buy CHK in 2014?

    by richardleeds Jun 19, 2014 5:31 PM
    richardleeds richardleeds Jun 20, 2014 1:56 AM Flag

    nattyOner,

    You are showing your deficiencies. Icahn is one of the wealthiest investors in the U.S. and he owns a ton of CHK. If we listen to you, you are saying he is going to take a beating. Who do you think is smarter, you or Icahn. We already know who is a better investor because he built a fortune of $1 billion up to $25 billion over the last 25 years.

    One of Icahn's largest holdings is CHK. That should tell you everything you need to know if you apply your analytical process to investing.

  • richardleeds by richardleeds Jun 19, 2014 5:31 PM Flag

    The market cap of Chevron has increased by almost $50 billion in the last 12 months.
    They could offer a 50% premium over the current market price and take CHK out for $30 billion in Chevron stock. It would be an easy transaction for them to pull off .

    One year ago I wrote on the DTV message board that I thought that DTV could be taken over by ATT during the next year or two at around $100. Well, my shares appreciated like crazy over the last year and my prediction happened.

    I'm expecting that Chevron shares will continue to appreciate with all the turmoil in the Middle East and the currency they will have for an acquisition will even become less costly. Who are the targets that are out there for Chevron? Not many. I would not be surprised to see CHK bite the dust in the next 12 months as an independent.

  • richardleeds richardleeds Apr 20, 2014 1:43 AM Flag

    CHK just did a major bond offering to refinance maturing debt and replace higher cost debt. The reduction in interest rates on $3 billion of new financing is almost 4% lower than the cost of previous debt financing. This will lower interest costs by $100 million per year. Also, starting in 18 months Cheniere will start to export natural gas and each year thereafter other companies will have export facilities coming on line. This will end the domestic market pricing for natural gas.
    In addition, each year CHK has more NGL wells and oil wells drilled than the previous year, so they are moving to higher revenues on the liquids each year.
    Finally, they are going to spin-off the oil service companies and the debt related to those assets, so the amount of debt will decline.
    As cash flows increase from less interest expense and higher cash flow from liquids they will be able to pay the debt down.
    This management team is one year into a three year make-over and the result each year should be a higher stock price.

  • Reply to

    short thesis for Eagle?

    by bluedreamdreamer3 Apr 15, 2014 11:16 PM
    richardleeds richardleeds Apr 17, 2014 2:57 PM Flag

    it is not a buying opportunity as the net value of the reserves is being diluted each year by issuing 10% more equity through the drip. This is the same situation as Argent. In addition, Libya is going to bring more oil production to the world market in 2014 and so is U.S. drilling by CHK, DVN, APA and COP.

    Issuing 10% more equity each year as this has been doing without increasing reserves by a greater amount is just a poor investment that rewards the insiders that brought this thing public. Ask yourself how much the insiders have purchased for their own account and then you will can ask yourself why they do not think it is a buying opportunity.

  • Reply to

    I THOUGHT aubrey was GONE?

    by natty_0ner Apr 11, 2014 4:48 PM
    richardleeds richardleeds Apr 12, 2014 1:32 AM Flag

    Show a little intelligence. This is not $3 billion in more debt, it is refinancing existing debt with debt costing 3-4% less. On $3 billion of debt that saves $100 million a year in interest.

  • richardleeds richardleeds Apr 10, 2014 7:56 PM Flag

    A spin-off does not bring any cash to CHK. The shares in the service companies are delivered to shareholders (spin-off). CHK receives nothing but the new public company assumes the debt associated with the assets so the CHK debt shrinks but so does the carrying value of the assets.

    More will be gained by CHK from the $3 billion in new debt that is replacing old debt. CHK is lowering its cost of debt on this 3 billion by around 4% per year. That is $120 million a year saved in interest costs which over the term could save around 1 billion in interest.

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