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UGI Corporation Message Board

rrb1981 128 posts  |  Last Activity: 8 hours ago Member since: Apr 18, 2001
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  • Reply to


    by edlibbybysea 9 hours ago

    The suspension of the distribution at EROC won't help the sector, but EROC has been horribly mismanaged. I chronicled the mishaps a few months back on the EROC board. The latest divestment of the midstream pushes them back to being a pure E&P MLP. We shall see once the dust settles where they shake out in terms of debt and ebitda of base (and thus leverage).

    The conventional E&P assets they hold are not spectacular but it becomes a game of seeing whether the market will misprice them during the transaction.

  • coochy.cooty,

    I believe you are correct. Until Linn announces an outcome on the Wolfcamp, we will likely trade sideways. Even then, if they choose to divest rather than develop, then we have to see if the packages are sold off piecemeal or in one or two larger packages.

    In the interim, you just have to hope for solid operation of existing base. A decent sized acquisition, especially a c-corp via LNCO could have an impact. The Goldsmith type deals don't move the needle enough at this point.

    So, it becomes a game of hurry up and wait (and collect the monthly distribution!).

  • Actually EROC is starting to look far more attractive at $4.00. I still think ARP and LNCO are better values at this point. Norris makes a valid point about poor management at EROC (of course, I made the same comments on the EROC board months ago). I think coochy made the comment that this an opportunity for a dead cat bounce.

    I am more focused on ATLS and ARP if/when the Hedgeye report ever gets released (anyone see it yet?)

  • Reply to


    by rrb1981 Apr 22, 2014 7:40 AM
    rrb1981 rrb1981 Apr 22, 2014 10:57 PM Flag

    Sorry norris, it appears your upset again.

    My math has never been a problem, it's just been one of many things you like to make up to attack me. I'll continue to point out to the board, you never pass up an opportunity to attack, yet, you'll note, my replies to you are always in response to an attack. It appears you and sand still have a hard on for me. It's nice to know I am loved by you two.

    Here is one that you and sand never like answering, so just for grins, I'll point it out again:

    No matter how great all of the Hogshooter gushers are that sand blows his wad over, no matter how fabulous all of the recent acquistions (Jonah, Hugoton, Goldsmith and Berry), which constitute BILLIONS upon Billions in deals, no matter all of the great things they like to drool over, note that Linn is barely covering the distribution with a 1.0x coverage ratio. Where did all of that accretive cash go norris? Don't try to explain it away with NGL prices when we all know that Linn has had high dollar hedges rolling off the books for years and are being replaced with lower value hedges

  • Reply to


    by rrb1981 Apr 22, 2014 7:40 AM
    rrb1981 rrb1981 Apr 22, 2014 6:13 PM Flag


    Yes, the only saving grace is that through the process of selling off the midstream, they should find their leverage greatly reduced, though they are receiving some RGP units, which I believe the analysts are assuming will be sold into the market for cash and the proceeds reinvested in producing, long lived mature E&P assets.

    At present, with LNCO yielding 10.5% and ARP at 11.5%, EROC isn't that attractive at 12.5%.

    Will be interesting to see if 10% becomes the baseline yield for the E&P MLP sector.

  • Reply to


    by rrb1981 Apr 22, 2014 7:40 AM
    rrb1981 rrb1981 Apr 22, 2014 6:10 PM Flag


    Take your medicine.

    I guess I''ll be the one that has to start the Linn centric discussion on how the low equity price is greatly impacting their ability to make accretive acquisitions.

  • Reply to


    by rrb1981 Apr 22, 2014 7:40 AM
    rrb1981 rrb1981 Apr 22, 2014 5:32 PM Flag

    Yawn. More bogus lies from you.

    I discuss many MLPs, and yes, Liza and I discussed EROC. I even stated I was interested in it under $5. And yes, the sell off of the midstream crown jewel business was unfortunate for EROC (but fortunate for RGP and indirectly fortunate for ETE, the GP of RGP and I am a owner of ETE, so I benefit from their misfortune). You can continue to attack me all you like,but you will not deter me from posting on the LINE board. Not sure what you are mumbling about regarding their cost of equity and IDRs. EROC's cut in the distribution makes IDR discussion pointless. As for cost of equity, we can have a rationale discussion about it if you would like? But I'd rather have a discussion on Linn's cost of equity vis a vis the burden that the high yield places on the accretion when making acquisitions.

    Shall you begin the discusion on a Linn centric topic or shall you devolve back into mumbo jumbo about fast food restaurants.

    I notice Linn bond still isn't at $40. Perhaps you should get the cheerleader back to work?

  • Reply to


    by rrb1981 Apr 22, 2014 7:40 AM
    rrb1981 rrb1981 Apr 22, 2014 3:46 PM Flag

    I believe you are mistaken on EROC. The E&P assets are junk or I should say are unspectacular conventional reserves, it was the midstream, and more specifically, the panhandle mistream assets that were some of the best around (cobbled together from multiple producers over the years, including some very well run BP midstream assets that were sought after by several other large midstream names for the sake of capturing volumes and filling plants that they already had in the area). Likewise, years ago, EROC owned a huge portfilio of royalty and mineral rights, which threw off a tremendous amount of cash with very little reinvestment necessary. I follow that business because of my large holdings in DMLP and SBR, which I consider to be best in breed in terms of owning true non participatory mineral rights and royalties. The CEO of the EROC is incompetent and he has nose dived the company twice. The first time he sold off the royalty business to Blackstone (or Blackrock). The second time he nose dived the business he sold off the nice collection of midstream assets to Regency (which benefits me via my ETE holdings). Now the market has eroded the equity value.

    I said I was interested in EROC below $5, it is now below $5 and yields around 12.5%, however, it is not more interesting than ARP at an 11.5% yield, or even LNCO at a 10.5% yield. You see, it is not just about opportunity at the time but also the quality (I'd much rather own a quality name like LNCO at a 10.5% yield than chase the risk of EROC for a lousy 2% extra yield, especially when the potential for capital gains at LNCO is so strong). I will continue to watch EROC, and if the market continues to drive the price down relative to the value of their holdings, I will get more serious in my research on their E&P prospects. In the interim, I'm happy to be continually nibbling on LNCO while it trades below the NAV (private market transaction value) of their production and reserves.

  • Reply to


    by rrb1981 Apr 22, 2014 7:40 AM
    rrb1981 rrb1981 Apr 22, 2014 11:29 AM Flag


    It will be interesting to see if the "clowns" have any new material. I'm wondering how long (or rather how many times) they will get away with these blatant hatchet jobs that are really baseless.

    For those that look to buy cheap, it might be another opportunity to add a nice trio of income stocks, though ATLS (the dual GP), with its rising IDR stream from APL and ARP is clearly my favorite, but if the pricing gets out of whack on ARP, it too is worth owning. 11% yield with a strong weighting on gas, much of which was purchased in the pricing trough ($2/mcf environment). They also have very nice Marble Falls (Barnett combo) oil play where they are getting payouts on wells in 14-16 months yielding a nice mix of oil and ngl's.

    As always, hold back PLENTY of dry powder for both the initial "report" release as well as any subsequent salvos.

    These guys are giving us MLP investors a real nice opportunity. Hmmm, do you think we could give him ideas on others we would like knocked down a bit in price to continue to add to? I have full positions in EPD,SXL, PAA, MMP and ETE, but could always add more and be overweight.

    What is so laughable is that post KMP/LINE, the brokerage firms are almost immediately reiterating their BUY recommendations when Hedgeye says sell. I'm inclined to say buy in small tranches after the report and average in. I did that with LNCO and am quite pleased with my yield on average purchase price. Got my brokerage to set up the distribution reinvestment as well.
    Now, if LNCO can close that gap and perhaps even return to trading at a premium...

  • rrb1981 by rrb1981 Apr 22, 2014 7:40 AM Flag

    Looks like the clowns at Hedgeye are now attacking Atlas Energy (ATLS), Atlas Pipeline Partners (APL) and Atlas Resource Partners (ARP) respectively.

    Report is due out on Thursday. I expect this to be a copy and paste hatchet job that was done on Kinder Morgan and Linn in the past 6 months.

    Might be a good opportunity to pick up some of the Atlas names on the cheap. I follow them lightly, so I'll be rereading the 10-Q's and presentations over the next few days to see what's new.

    ARP, the E&P MLP, is trading onear 11.4% yield. They recently made a small all gas acquisition in W. Virginia. It's not without its risk, they run with a lean coverage ratio and also operate some private drilling programs for investors, which is very lucrative, but also volatile.

    Nevertheless, ATLS is a pure play GP, owning IDRs on both an E&P MLP and a midstream MLP, as well as some nice private incubator MLP companies via Lightfoot.

    Will be interesting to see if Barrons chimes in!

  • Reply to

    Kinder Morgan Inc

    by rrb1981 Apr 17, 2014 7:45 AM
    rrb1981 rrb1981 Apr 17, 2014 8:54 AM Flag

    Should have added that coupling my KMI buy, with continued LNCO purchases, 2014 is turining out, despite the market getting very frothy, to be a good year to pick up value. Got to love Ben Graham and buying dollar bills for $.70 on the dollar.

    Also pleased to be buying WRES, which I consider undervalued and an ideal LNCO acquisition candidate due to low leverage, high PUD and oily composition with option value on the CMB assets.

    Continuing to DRIP my EPD, PAA, SXL and now DRIPing LNCO letting cash accumulate on many others.

    Also been continuing to add modestly to my SBR and DMLP positions, which are shaping up nicely.

  • rrb1981 rrb1981 Apr 17, 2014 7:47 AM Flag


  • I'm pleased with the KMP and of course KMI results. Slow and steady wins the game. I'll take the $.01/Q dividend increase at KMI. Thanks to Hedgeye for allowing me to pick it up on the cheap.

    Even though KMI (and KMP) are massive entities that are not going to be able to grow at rapid rates, it is still nice to have some bellweather stocks in my portfolio that I know will crank out modest dividend growth year in and year out.

    Furthermore, based on KMI management projection, if things go as planned, we are looking at a couple of more $.01/Q dividend bumps later this year. Couple that dividend increase with the nice stock and warrant buybacks and it is shaping up into a nice total return for '14.

  • Reply to

    We Need a GDP type moment!

    by choo2choo Apr 14, 2014 1:19 PM
    rrb1981 rrb1981 Apr 15, 2014 2:41 PM Flag

    A GDP type jump might happen with the announcement of terms involving the Wolfberry, be it a JV, an outright divestment, a like-kind exchange ("swap") or some combination.

    Or the market may continue to ignore the value and its impact on DCF and DCF/unit.

    I continue to add to my LNCO position several times a week in small buys. The market is getting frothy (my opinion), so I enjoy buying undervalued stocks. Also still adding to KMI and WRES.

  • Reply to

    Ohio bans fracking

    by gal1918 Apr 11, 2014 6:58 PM
    rrb1981 rrb1981 Apr 13, 2014 3:10 PM Flag

    thegreatone561 (aka braf)...

    Linn has openly stated it is in the market for mature, shallow decline properties and is open to divesting, JV'ing their higher risk(and return) capital intensise Wolfberry properties. So they are both looking to buy and sell.

    Ones personal politcal affiliation should have nothing to do with Linn's strategy of buying or selling properties. And, one can only hope you don't put too much credence in a rag like Motley Fool.

  • rrb1981 rrb1981 Apr 11, 2014 7:00 PM Flag

    Sorry, it is sand that likes to copy...not me.

    Better luck next time.

  • rrb1981 rrb1981 Apr 11, 2014 5:12 PM Flag

    Well, it looks like you are capable of learning.

    So now you admit that debt/ebitda is indeed a real metric and one that must be monitored as referenced by your response that they need to acquire a low leverages c-corp (via LNCO) to further lower their leverage.

    You admit that coverage ration needs to be improved (especially in light of the fact that the company has temporarily abandoned their 5-6 hedging policy).

    And, for once you got something right (big applause), Linn is not liquidity constrained. Of course, I haven't seen anyone posting as such on the board.

    To complete the trifecta, you need to go ahead and admit that Linn's average annual decline rate of over 30% was becoming untenable, especially in the face of less than stellar and unpredictable Hogshooter results (that were meant to be the growth avenue for the company, but instead, became a real burden where they got less than acceptable returns).

    Oh, and you are incorrect again, ratio and ration aren't not synonyms. Sorry..

    I bought some more LNCO today (yep, even on an up day).

    Patiently waiting on either a Permian sell to goose DCF or on acquisitions (assets or whole companies). Even if they only raise DCF, and not the distribution, the perception of stability should help stabilize the price. The upgrade today of LNCO was interestng. In a market full of overpriced equities, I'm thrilled to be buying LNCO at under NAV.

    Now, we just need our lil cheerleader sandy to get his pom poms out and start telling us about all of those gushers.

  • rrb1981 rrb1981 Apr 11, 2014 2:48 PM Flag

    First, it is ratio, not ration.

    Second, as you are so very predictable, you make an accusation but fail to provide ANY facts to back up your assertion.

    Third, you really need to take your meds, or lay off the bottle. You continue to be incoherent.

    But, in rebuttal, my statements were fully correct and it is obvious that you are letting your anger and hatred get the best of you again. Your animosity for me is such that you feel compelled to comment on every post I make, yet seldom have I ever, unprovoked, commented on any of your posts (mine are always replies back to your unfounded allegations and innaccurate innuendos). Even if I were to copy and paste an exact message of yours, you would disagree with me, for the simple fact that you've tied yourself in knots and I've been one of those on the board that have openly laughed at your childish attitude.

    As I said a long time ago, I'm not going away from the board, so you might as well resign yourself to the fact that I am here to stay. You can continue to comment on my messages as you wish, but you must realize that your attacks are only filling the board up with non Linn focused messages, which somewhat defeats the purpose of this board. You like to prattle on about politics and ethanol, which are not terribly germane to Linn's success on a day to day basis. Yes, legislation impacting the MLP sector is germane, and yes, the impact of ethanol on refined products is germane, but you utter nonsense day in and day out about corn prices isn't impactful to the discussion on NGL prices, natural gas prices, rig counts, or other E&P cetnric topics.

  • rrb1981 rrb1981 Apr 11, 2014 2:18 PM Flag

    The barter system as you put it opinions, is very elegant for the Wolfberry.

    Linn's current equity price dampens accretion (over 10% yield), so swapping higher risk (albeit much higher return) unproductive acreage that requires enormous amounts of capital for mature, low risk, low decline production that will add immediately to their ebitda makes a lot of sense.

    It also helps them avoid any taxable gains (1031 exchange).

    It raises coverage ratio more meaningfully than undergoing a full development program that is capital intensive and requires debt and equity issuance to fund.

    Note that Legacy Reserves is doing the same with their Wolfberry acreage as is EVEP with their Utica acreage.

  • rrb1981 rrb1981 Apr 11, 2014 2:12 PM Flag

    I'm also pleased to see that you pulled your head out of the ground and realized the Permian assets were worth more than $1 billion as you alluded to a week or so ago. The production alone is worth well more than $1 billion (17,000 boepd) and you were off spouting about doing a $1 billion unit buyback (not going to happen). Every bit of the proceeds will be redeployed into production. One, because it will increase their ebitda, which will lower their debt/ebitda metric and actually increase their borrowing capacity, and secondly because doing the buyback would not raise ebitda, it would raise DCF/unit, but so would increasing ebitda without increasing unit count. How simple you must be to think an MLP of this size would do a unit buyback of $1 billion. How simple..

    $1 billion in proceeds would likely result in near $140 million in additional EBITDA (made at an industry standard 7x multiple). The board can rest easy at night knowing norris isn't making the financial decisions for the company!

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