Seems like a perfect fit for Kinder Morgan, especially now with BOSCO operational and also given KM's '14 growth concerns.
Hard to predict the future, but clearly TLP owners have the potential to do well with this sale if the new GP is intent on growing the distribution and boosting the IDRs. Morgan Stanley has done a poor job these past few years since taking TMG (the GP) into the fold.
With a small market cap, a relatively good balance sheet and a strong promotion from an interested GP might make for favorable circumstances over the next couple of years. A $500 million dolalr acquisition, done at a reasonable multiple could drive decent growth to the bottom line.
I own some TLP and have for years. I'm happy collecting the distribution, but will be pleased with any growth that materializes.
Indeed. Not bad for a well run GP of two midstream MLPs, a 5% yield and 5% annual dividend growth.
KMP is so large, that the days of huge growth are behind it, but KMI should still achieve moderate growth even with paltry distribution growth at KMP.
Once the drop downs are complete (KMI to EPB), KMI will be back to being a "pure play" GP. Not sure the market will assign a yield any lower than 4.5%, but at this point, it should be viewed as a decent income play with growth potential.
While Walker has not been successful in monetizing the Utica as originally projected, they've done a fine job of managing the base operations.
Actually, at these prices, EVEP is quite intriguing. If they can monetize another $200 to $300 million in the Utica, they'll be in very good shape.
I'd also expect to see continued acquisitions of gas assets.
I doubt you can name even (1) MLP that pays out more in dividends than it has in revenue.
But perhaps you mean, pays out more in distributions than it has in distributable cash flow?
I bought some more today as well.
The guidance for KMI was very disappointing.
Even more so was the guidance that EPB will have essentially zero distribution growth in '14. Yielding 7% now, makes it a decent value in my opinion, even without growth.
KMP distribution growth is marginal, but we've known for years that KMP has gotten so large that it would be hard to continue to grow it at anything more than pedestrian rates (i.e. slightly above inflation).
Not sure if they are going to try to start running with a higher coverage ratio, if they anticipate turbulent credit markets and are gearing up for rising rates. Also not sure if Park Shaper's departure is related, but it is troubling to see such marginal distribution and dividend growth.
Nevertheless, I viewed KMI, with a 5% yield and growing a mid single digit rates as a nice investment for some capital that was not deployed. I don't expect to hit a home run with KMI. Those days are long gone. I do think though that a GP of KMP/EPB with a solid cash flow stream ought to yield a little lower than 5%. Even a 4.5% yield gives us some decent appreciation.
We might have a few more days of sell off left, but I think the market likely will realize that a 5% yield growing at 5% a year is at the very least, in this inflated market, a decent bargain.
Joe Mills couldn't drive hot nails into a snowbank with a 50 lb sledgehammer.
He nose dived the company in '08, sold off the crown jewel mineral royalty business to a related party so he could stay in charge.
That royalty business required very little capital and produced a nice margin. But ole Joe decided to part ways with the "minewals" business.
It's a well run royalty MLP.
No debt to speak of, management has a large position. They send you a nice distribution Q after Q. You aren't going to get rich on this one, but it's a relatively stable holding and is worthy of consideration as at least a small holding in a well diversified portfolio.
While I understand your comments, in all fairness, I think serious consideration should be given to the midstream assets, which as of yet, have contributed very little, but should begin producing significant ebitda and dcf over the next year or two.
The coverage ratio of .8x is a reason for concern though. I suspect though that the Utica asset sales will continue to be slow and small. I'm guessing that they will reach the point where they "give up" on the clean easy big deals and will start selling anything that is reasonable in terms of price, regardless of whether or not it requires them to sell piece-meal.
Realistically, another $200 million in divestitures ought to go a long way towards closing the DCF shortfall.
Any subsequent divestitures ought to help them either produce coverage and ultimately grow the distribution.
The company does have some nice San Juan and Barnett assets along with the Austin Chalk.
Must have struck a note with you sandy.
I guess you must have had egg on your face with your shameless promotion and your conspicuous disappearance after thy admitted they were moving their rigs out of Texas and over to the Oklahoma side in search of better returns. I know you remember that, because you got so upset when someone on the board noted that Linn's working interest in the Oklahoma side was less than the Texas side.
Oh, and as per your typical m.o. you continue to ignore the obvious. Like Linn's lack of capital appreciation over the past 3 years. That Linn holders have missed out on what many would argue is one of the greatest bull runs.
And no stories made up. Bottlenecks were real. Your boy at Linn even mentioned in in the conference call, or did you miss that. Smirk.
Balance sheet bloated, yep, it was. Berry equity deal fixed it. $5 billion in equity to right the balance sheet. 325 million units outstanding post closing. Grab your calculator and do a little math and figure out what 5% annual distribution growth on 325 million units would require (assuming the current $2.90 rate). Oh, and throw in 1.10x coverage.
By aware of myself:
Do you mean am I aware that Linn holders have essentially missed out one of the greatest bull runs over the past 3 yrs and Linn still needs to climb another $10+ to just get back to its high? Yep, I'm aware of that, as you are too. Thanks for asking.
And despite all of your shameless promotion of IP rates, Linn remains priced below what it was at 3 yrs ago.
Yep, I too can pull up a chart. :)
It's really a shame Yahoo won't let us post links anymore, I'd be more than happy to post a link to the 3 yr chart for you to study.
But hey, look on the bright side, the Berry deal significantly cleaned up the bloated balance sheet and got their debt metrics back in line such that we might actually start seeing LINE report them again in their presentations, you know, after they so conveniently disappeared from the presentations after they crossed over 4.0x
Oh, any projection on when Linn bond goes back to $40?
As I recall sand, you were one of the biggest pumpers err supporters of the Hogshooter in the Texas side.
Always spouting off the 24 hr IP rates, which we all know mean a lot less than 60 and 90 production rates. Funny how you disappeared when Linn pulled out of the Texas Hogshooter after they experienced very poor rates of return. You see, IP rates are fine and dandy, but economic returns are what drives the company. But you'll learn.
Oh, look, sand is back, taking care of his homeboy Norris. Did you ever get new batteries for your calculator?
And yes, they botched the Texas side Hogshooter (you know, that funny word..rolling my eyes and shaking my head at your childish statement..)
And yes, it's taken billions upon billions in deals to help shore up holes in their DCF as their high dollar natural gas hedges rolled off the books.
And yes, I would hope finviz points up...after Ellis drove it into the ground. Perhaps he'll focus on making sure the distribution is secure before he gets so antsy to show distribution growth.
Will be very interesting to see how well he is able to drive growth in an MLP with 325 million units post Berry. Yea, that will be really fun to watch.
Wrong, as always.
I said 11 years, not 45. That is a huge difference in compounding. . If you borrowed sandforbrains calculator you'd figure that out quickly.
My annualized returns have not been that good as of late, but, as I mentioned numerous times, when you get multi-baggers in GP's like MWP which I bought in the $7's and of course, as we all know got taken out by MWE, PLX got taken private by Paul Allen's (of MSFT fame) Vulcan firm, the original KMI (taken private by King Richard himself), XTXI, KSL which got bought by what is now NuStar all in the early 2000's, all of those big gains certainly help skew the compounded results. Same thing with BGH, EPE (thanks Dan Duncan), MGG. As I said, I was in the right place at the right time and got in on the ground floor on many of them. Of course, I don't need to swing for homeruns anymore. I'm more concerned with capital preservation and modest distribution growth.
But nevertheless, the returns are real. You can go back and look at some of the boards and find my postings from MLP boards going back to around 2001. XTXI is one. I think if you ask on the MWE board, you can ask buyandwin, he was on the MWP board back in '02 time frame when I convinced him to buy the GP and not the LP. Needless to say, he can confirm that was a good deal.
And yes, I have gotten numerous statements correct about LINE. In fact, it's that correctness that has so irritated you. I'll state again, maybe you can help me with my math on this one...why isn't Linn bond at $40?
This deal is very disappointing to me. I would like to see what the accretion is from the "services" company.
It also smacks of insider dealing. While they do have independent directors, does anyone expect them to object and risk losing their cushy position?
Also, I actually liked NSLP as a nice play on NGL prices. If they could achieve a 1.0x coverage when NGL prices were low, then as prices rise, they should have very nice coverage.
Now, it appears that NSLP is branching out. It sounds more like Kos wanted to monetize the MCE but couldn't find a buyer. To make matters worse, they retained some IDRs on the embedded assets. Crazy.
I won't be buying any after this deal. They had a lot of potential, especially with a supportive sponsor that could drop down assets after they have been de-risked.
No one cares about your mindless drivel. You are letting your anger and hatred get the best of you. If you don't like my suggestions, that is fine. Others may be interested in purchasing a royalty holding, or another oily weighted E&P MLP.
You've been upset with me for about 2 or 3 years now. Ever since I called attention to Linn's woefully inept acquisition efficiency in terms of converting billions of dollars into, at best, marginal accretion. Of course, we all know that as Linn watched it's $8/mcf gas hedges roll off the books and get replaced with $7/mcf, then $6/mcf, then $5/mcf and now $4/mcf hedges, it put a serious strain on their DCF.
It's why jack bailed out of Linn. Linn is from an operational standpoint, a well run company. Sure, they botched the Hogshooter, but had they not gotten themselves so overextended financially, they could have weathered that storm, even with the NGL pricing debacle and midstream bottlenecks (high line back pressure).
What is also very much worth noting. You like to criticize math, yet never bother to post any of your own. It's much easier for shills like yourself to cast allegations and disappear than actually produce proof. It's why the board, full of many intelligent people, people of dramatically different educational, occupational, religious and political backgrounds who all come together to discuss something we all enjoy: investing almost universally give you thumbs down on nearly every post. Your routine is old, tired, unimaginative and repetitive and adds nothing of value. The universal disdain for you appears to transcend even political boundaries, with liberals and conservatives alike giving you thumbs down. Congrats on that!
And for a final closing, I've averaged a compounded ~36% return for the last 11 years. The bulk of that came from midstream MLPs and GPs (being in the right place at the right time in the early 2000's ). But thanks for being concerned with my math.
Why isn't Linn bond at $40? :)
As I mentioned, you have to go to the annual unit holder presentations to see most of the data regarding DMLP's operations. Their true mineral royalty business in phenomenal and the reversionary back end Bakken working interests are now on the cusp of starting to add material cash flows (they get a reversionary back end working interest after the operator has received 1.5x drilling cost, or full payback plus 50%). It means DMLP gets a nice piece after the wells are well into the flat part of the curve, meaning the piece of action may be small, but should be low decline. Plus they get an interest in about 150 wells.
It is a legitimate point though that the 10-Qs and 10-K's are minimal, they are a small operation, something like 20 employees and they don't drill or operate. They collect receipts from royalty interests. I owned the old Dorchester Hugoton (DHULZ), Casey McManemin merged 2 of his privately held royalty investment funds into the company, changed the name to Dorchester Minerals (took over as CEO with older CEO staying on - very old man) and has been doing a spectacular job for 10+ years. Heck, they even spun off the XOM holdings to us unitholders during the merger, having had a nice stash of XOM from a deal in the past where they accepted stock rather than cash. It's very much a black box, so obviously should be well understood and researched. It makes up a small position in my portfolio and produces nice distributions, which get redeployed.
Yes, the reserve life is lower than desireable, but tends to move in lock step with their maintenance cap ex drilling.
I actually though the ratio at LGCY was down below 3.0x, perhaps it has crept up. Will need to look at most recent release. They don't go out as far as would be desired in hedging as you point out.
Ok, since you prefer hedging, then that likely rules out Dorchester Minerals (DMLP). I've owned it since it was Dorchester Hugoton. It's essentially a royalty vehicle, in an MLP, rather than a trust. They can actively grow holdings. They have both true royalty interests as well as net profits interests (and some reversionary back end working interests in the Bakken).
Debt free, but variable distribution. Management is top notch. Casey McManemin. Read the annual unit holders reports archived on the website. Very informative.
It's a sleeper type. Just keeps paying me distributions, quarter after quarter after quarter. They add acreage from time to time to replenish inventory.
Are you open to midstream? A lot of well run midstream MLPs, though, I would caution, the sector is very hot. Seems like a new closed end or index fund comes out every month or two tracking the MLPs. It will be difficult for you to find a 8% yield that is associated with a well run, strong midstream company, especially one without IDRs. I'd remain patient and wait for one of those "bobbles" that tend to hit the sector once or twice a year.