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Ferrellgas Partners LP Message Board

rrb1981 145 posts  |  Last Activity: Jul 22, 2014 11:20 AM Member since: Apr 18, 2001
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  • rrb1981 by rrb1981 Jul 22, 2014 11:20 AM Flag

    Today's SEC filing shows PostRock is making excellent progress in divesting their CEP holdings. Their position is now down to 3.3 million units, meaning a divestiture of 450,000 units over the past several weeks.

    Looks like at current pace, they will be complete by year end, which was the original stipulation, but it certainly will keep downward pressure on the price. The market is going to have to absorb quite a bit of volume.

    Of course, we likely also have a general uptrend in our favor as the market is slowly starting to see the value creation opportunities from having a strong supportive sponsor.

    I'll be glad to see PostRock out of the picture.

  • Reply to

    Name Change Coming Soon

    by rrb1981 Jul 13, 2014 4:30 PM
    rrb1981 rrb1981 Jul 20, 2014 9:50 PM Flag

    Do you mean a reverse split? It would be a good idea, since this is in essence a phoenix. A reverse split of 1:8 would be indeed a very good idea, giving them a price above $20/unit.

    Of course, liquidity is also an issue. The divestiture of the remaining 3.7 million units owned by PostRock should greatly improve liquidity. If future drop downs are effected, it remains to be seen if CEP would issue equity directly to Sanchez or pursue a secondary offering.

    Of course the best thing that could be done would be the initiation of a distribution, even a modest one of $.01/unit per quarter. That would be a great starting point upon which they could grow the payout as they acquire mature properties and roll them into the fold.

  • Reply to

    Go SDRL or RIG

    by shoathai Jul 11, 2014 6:49 PM
    rrb1981 rrb1981 Jul 14, 2014 5:51 PM Flag

    I think people would give your simple minded rants more serious consideration if you learned to use punctuation.

  • rrb1981 by rrb1981 Jul 13, 2014 4:41 PM Flag

    Looks like from SEC filings, PSTR is making good progress on divesting their CEP units. They look to have 3.75 million units remaining and it appears that they are committed to divesting by year end as stipulated in the settlement.

    This should provide some much needed liquidity to PostRock. As a CEP owner, I am pleased to see PSTR no longer meaningfully in the picture. While I believe that a combination of PSTR and CEP made a lot of sense, especially considering their common Cherokee Basin asset positions, the heavy involvement by White Deer made it a no-go. The Cherokee Basin is in need of consolidation to drive synergy given the generally poor economic returns of the coal bed methane wells at current prices. Field volumes should continue to decline, putting more pressure on management to cut costs in order to keep per unit margins.

    White Deer made an investment in PSTR that should have never been made. They have compounded that investment repeatedly and now essentially control PSTR. That being said PSTR must now find a way to reverse its fortunes.

    I am interested in the SCOOP drilling that PSTR is doing and also in what they receive for the Appalachia properties. I am not sure that these moves will be enough to save PSTR. I believe another infusion of capital is likely needed..but it remains to be seen if White Deer is willing to continue to invest into PSTR.

  • I'm expecting a name change any time now for Constellation Energy Partners.

    With the lawsuit settled and the class C & class D units now repurchased from Excelon and subsequently cancelled, the former sponsor is completely out of the picture.

    With the would be stalker PostRock now effectively relegated to a holder of common units (class A units transferred to Sanchez) and as a further stipulation to the settlement, PSTR will be divesting their remaining class B ("common") units on the open market over the next 6 months.

    With Sanchez Oil & Gas and Sanchez Energy Partners I now firmly entrenched as the sponsor, it seems likely that CEP will shortly change their name. I'd expect something to the effect of Sanchez Production Partners or Sanchez Partners.

    Regardless of what name is ultimately decided upon, it remains clear that rebranding is vital as it draws a close to the Constellation era that was a disaster. CEP went from a high flyer to what essentially amounted to a run-off mode in a few short years time. Now with Sanchez looking to drop down producing mature assets into CEP, it is likely that the worst days are behind them.

  • Reply to


    by averyed510 Jul 11, 2014 12:54 AM
    rrb1981 rrb1981 Jul 11, 2014 5:12 PM Flag

    By my math, in order to keep TLP unit holders whole on the distribution would result in an incremental $8 million in DCF (the additional $.43/unit to TLP plus the IDRs multiplied by the total TLP units outstanding).

    So the reality is it is a $2 million per Q draw...not too bad.

    At 10-12% growth per year at NGL (distribution), it still takes nearly 2 years to catch up, especially if TLP were raising at 1-2% per year. That means you are looking at year 3 before you come out ahead on income, though clearly you probably would have gained on the equity appreciation of a 10-12% distribution growth...but this does require NGL to indeed hit that growth rate for 2 years, which may or may not happen. What if the economy slows down and NGL only manages 7% distribution growth. Then you are looking at 3 years before you break even on distributions.

    I think NGL needs to close the gap. A 1.10x would be more palatable...still results in a small immediate distribution "cut" to TLP holders but does protect them against a softening of distribution growth at NGL.

  • Reply to

    The good news is...

    by buybackerer Jun 12, 2014 11:02 AM
    rrb1981 rrb1981 Jul 10, 2014 5:36 PM Flag

    Now NGL is offering to exchange NGL units for TLP units on a 1:1 ratio. Meaning TLP units would effectively take a 17% distribution reduction, if I am indeed understanding the exchange correctly. $2.21 vs $2.64

    No thanks.

    Hopefully the proposal will be declined by the conflicts committee but as a reminder, this has happened in the past at both Teppco (bought by Enterprise) and also at Penn Virginia (bought by Regency) and NGL will at the very least make TLP holders "whole" on the distribution, which would mean a nice premium on the equity or they could raise the NGL distribution from $2.21 to $2.64 to keep them whole. Both of those will be difficult given the amount of increased DCF it would require.

    Not liking this transaction as it currently stands.

  • Reply to


    by rrb1981 Jun 30, 2014 10:34 AM
    rrb1981 rrb1981 Jul 3, 2014 1:23 PM Flag

    The reality is that you use 2 separate (potentially more as well) avatars. Shameful and pathetic.

  • Reply to


    by rrb1981 Jun 30, 2014 10:34 AM
    rrb1981 rrb1981 Jul 2, 2014 7:27 PM Flag

    I notice you dislike it when I draw attention to the fact that you have (2) avatars. What a joke. Even sandforbrains used to make fun of and accuse others of having 2 avatars.

    Yes, you are noticeably silent on your use of 2 avatars...noticeably silent.

  • Reply to

    Divi itays the same...

    by borisbadenoffthe3rd Jul 1, 2014 4:17 PM
    rrb1981 rrb1981 Jul 2, 2014 12:04 PM Flag


    Agreed. I think Linn will keep the distribution at $2.90 thru 2014.

    They have a lot of moving pieces with the Wolfcamp divestitures, the new Hugoton properties to integrate into their existing Hugoton field, the Devon assets, divestiture of the Granite Wash, potential divestiture of the remaining Wolfcamp properties. Plus, they have the issue of the '16 natural gas hedges being lower and they have to deal with lower oil futures (and they haven't hedged nearly as much). All of this bodes for Linn simply sitting tight in '14, letting it be a year of consolidation. Having some cushion is important.

    They need to let coverage trend towards 1.10x for the simple sake that 1.10x coverage provides nearly $100 million in growth capital that doesn't require equity or debt. That $100 million in coverage can be used to help make up for shrinking margins in '16 on the gas side and on the oil side. With the divestiture of GW and much of the Wolfcamp, the maintenance budget will drop taking a lot of execution strain off the company.

    I don't look for anything more than 3-4% pedestrian level annual growth for Linn from here on out. They are a $10 billion market cap, $20 billion enterprise value. Hard to move the needle on 330+ million units.

    The recent deals though have materially de-risked the company and largely removed the sustainability question.

  • Reply to


    by rrb1981 Jun 30, 2014 10:34 AM
    rrb1981 rrb1981 Jul 2, 2014 11:53 AM Flag

    I see you busted out the dadnorris1 and norrishappy #$%$ today in near sucession. I guess you felt the need to give yourself a thumbs up.

    Laughing at the fact that you feel the need to have multiple logins. What a clown.

  • Reply to

    Stock market is well overdue for a correction

    by bearnobull Jun 30, 2014 10:48 PM
    rrb1981 rrb1981 Jul 2, 2014 11:51 AM Flag

    thegreatone561 (aka Mr Barf), you do realize that interest rates are slowly moving up? Have you checked lately? Check your local credit union or bank. You'll see both higher rates for lending as well as for savings.

  • Reply to


    by rrb1981 Jun 30, 2014 10:34 AM
    rrb1981 rrb1981 Jul 1, 2014 7:42 PM Flag

    Yes, management did a very good job of sticking to their guns and closing the Berry deal despite a lot of foolish unit holders crying for it to be scuttled.

    Linn's financials would have been a nightmare without Berry.

  • Reply to


    by rrb1981 Jun 30, 2014 10:34 AM
    rrb1981 rrb1981 Jul 1, 2014 7:37 PM Flag

    You are trying to mix 2 things that are not up for comparison. Hogshooter disaster brought on the need for Berry. Berry deal while increased tremendously from the original ratio, provided Linn with plenty of qualityoily PUDs and the solid world class California operations, and you are mistaken (you need to borrow sands calculator), it wasn't dilutive. You need to go back and look at the 10-Q data, more specifically the cash flow and then the number of units issued. The deal was accretive, not to the degree that Linn management originally had projected, but rest assured, you dilutive call is dead wrong. Sorry, but then again you are used to being wrong, much like the ash clown sandforbrains.

  • Reply to


    by rrb1981 Jun 30, 2014 10:34 AM
    rrb1981 rrb1981 Jul 1, 2014 7:33 PM Flag

    yawn. More gibberish from you Norris, as always. A condition you cannot escape nor change. I pity your existence.

  • Reply to

    Stock market is well overdue for a correction

    by bearnobull Jun 30, 2014 10:48 PM
    rrb1981 rrb1981 Jul 1, 2014 6:17 PM Flag


    Why do you address Mr Barf (yourself)? We all know you simply signed in under a different login!

  • Reply to


    by rrb1981 Jun 30, 2014 10:34 AM
    rrb1981 rrb1981 Jul 1, 2014 6:03 PM Flag

    You can blame Obama and the SEC all you want but that won't change reality.

    As for Berry, Linn is lucky they were able to close the deal. It saved them...despite what many clowns think, I was accretive and also provided them with a tremendous portfolio of high IRR oily PUDs. I've said it many times, for those that didn't like the Berry deal, they really wouldn't like the picture if the deal had fallen apart.

  • Reply to

    Ah Mad Who thinking back to EPB

    by norrishappy Jun 30, 2014 2:23 PM
    rrb1981 rrb1981 Jul 1, 2014 5:59 PM Flag

    I notice Linn announced the distribution. Yet again, sandforbrains was proven wrong. I guess he won't be returning again for at least another month due to his epic fail on distribution increase projection.

    Laughing, at sandforbrains...the poor nervous twit. Hopefully he returned to mutual funds and CDs.

  • Reply to


    by yertle120 Jul 1, 2014 11:10 AM
    rrb1981 rrb1981 Jul 1, 2014 3:10 PM Flag

    Actually, I doubt Linn has any greater knowledge on this package of assets than Devon. It really speaks more to the difference in business objectives of Linn and Devon. Linn is looking to acquire and exploit mature, low risk, low decline production to generate cash flow. Devon is looking to monetize these low growth assets to redeploy that cash into growth in oily assets.

    This swap is really about taking execution risk out of the picture. Linn will divest their Granite Wash assets which are not fully developed and will replace them with these assets. Overall, we will see a massive lowering of the companies overall decline rate, which will drastically reduce overall maintenance capital. This in turn reduces their need to be so aggressive in drilling, reducing their capital intensity and allowing them to focus on their highest IRR properties, thereby increasing capital efficiency.

  • Reply to

    Ah Mad Who thinking back to EPB

    by norrishappy Jun 30, 2014 2:23 PM
    rrb1981 rrb1981 Jul 1, 2014 1:53 PM Flag

    As I said before, the board is much cleaner without the nervous twit sandforbrains. He could never learn, a faulty condition in his wiring. His departure significantly raised the average IQ on the board.

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