sandforbrains was an amusing clown. He was good for copying and pasting, especially out of date, irrelevant articles, usually in an attempt to save face for the countless foolish projections he made that seldom came to pass. I usually gave him an "E" for effort. Overall though, he was a dimwitted sloth.
I see you are upset that you did not realize that steam injection could be viewed as tertiary recovery! Nice try by you trying to slip out of that gaffe. Although the board can see you are nothing more than a hate filled nut that has taken his medicine. You should try enjoying life instead of wallowing in angst and hatred. I pity the quality of your life, how shallow and empty it must be.
Of course, you probably weren't aware of the numerous methods of tertiary recovery, with CO2 and steam injection being just 2 of them. You also likely haven't heard of high pressure air injection which is employed by Denbury in some of the fields they acquired from Encore years ago. Or perhaps some of the surfactant injection plays. But it should be expected for someone like yourself that has to be spoon fed by Clay.
You've been moping ever since the degenerate sloth sandforbrains finally departed. I doubt we will see ilk of his nature return to this board. He got terribly mocked for his distribution projections and his thin skin couldn't take the mockings he received. The poor, poor dumb nervous twit sandforbrains had to run off like a little baby whose diaper was full.
By the way Norris, are you still upset that Linn bond isn't at $40? I mean, with, you know, record DOW JONES closings nearly every week and Linn still sort of just lingering around $30ish, despite Linn closing billions upon billions in deals (Berry, Goldsmith, XOM swap, Devon deal)....kind of makes you realize just how untenable the decline curve got and how overly dependent management got on "hoping" that things would go well in Granite Wash, Hogshooter etc....and we all know that their "ex ante" returns were...ahem...just a little off target. Sorry, couldn't resist.
Of course, it should be expected when Ellis decided to deviate from the original business model of buying mature, low decline properties with predictable annual declines and manageable operating costs and then hedging them out for 5 years and running with a prudent coverage ratio. Abandoning that model for pie in the sky growth thru the drillbit wasn't successful and now they are finally returning the company back to its roots, divesting Wolfberry, Granite Wash etc. Back to basics. A tough pill for the "rock stars" to swallow, but they did swallow their pride and have given their mea culpa. Their next project will be to restore the balance sheet to something that isn't so bloated now that Linn's fabulous hedges are nearly all run off the books. Gas hedges tapering down in '16, management still playing games and rolling the dice on crude hedges ...but, I firmly believe management has seen the light and will shape up soon. They might even get coverage ratio to 1.10x..certainly once they divest their GW and perhaps if they divest the remaining Wolfberry (latest company announcement about paying for Devon deal with proceeds of GW/Cleveland Sands can only cause speculation that Wolfberry 2 isn't going to happen in time for 1031 exchange)..
Sorry Norris, you are wrong. You let your hatred and anger get the best of you (as always).
See copy and paste from SEC filing by Berry....tertiary recovery is real.
Enhanced Oil Recovery Tax Credits
In 1990, President Bush signed into law the Revenue Reconciliation Act of 1990 which included a tax credit for certain costs associated with extracting high-cost marginal oil which utilizes at least one of nine designated "enhanced" or tertiary recovery methods. Cyclic steam and steam drive recovery methods, which Berry utilizes extensively, are qualifying EOR methods. Hydrocarbons produced from primary or other secondary recovery methods are not eligible for the credit. In 1996, California conformed to the federal law thus, on a combined basis, the Company is able to achieve credits approximating 12% of its qualifying costs. The credit is earned by investing in a qualified EOR project which includes three distinct costs: (1) drilling new wells, (2) adding facilities that are integrally related to qualified production, and (3) utilizing a tertiary injectant, such as steam, to produce oil. This credit is significant in reducing the Company's income tax liabilities and effective tax rate.
As for sandforbrains, he was a dumb, hyper, strung out nervous twit that was overly concerned with what others thought of him. A real knuckle dragging Neanderthal. In other words, low life #$%$.
I based it on the SEC.gov filings as of several days ago, so I believe inside monitor to be incorrect since PSTR shows their holdings as of just a few days ago at 3.3 million units and volume over the last few days has not been meaningfully higher than normal.
The SEC filings actually show the daily sales. However, PSTR did originally have around 5.5 million units and are now down to 3.3 million, so since earlier in the year they are down 2.2 million units.
It is somewhat of a moot point. PSTR is getting out, which will boost liquidity and remove the cloud of uncertainty that they brought with them as a less than friendly sponsor and stalking horse bidder.
The removal of Exelon also clears things up.
Now we need to see Sanchez make a decent sized drop-down and a renaming of the company and those should be decent catalysts, with a distribution being reinstated as the ultimate catalyst.
I think NAV is presently well above current market price (depending on strip prices and cost controls). The platform they have can and should handle much more volumes without meaningful SG&A increases (the game plan at least). If they can succeed in doing that, it should mean cash falling to the bottom line and DCF being sufficient to distribute. I'm expecting an initiation of $.04/unit annually, with, hopefully a series of $.01/q increases. That would put them at $.32/unit in 2 years. Sanchez has a tremendous opportunity to use CEP as a roll-up vehicle and to drive appreciable cash and fees back into SOG/SEP I.
I think if you look closely at Linn's Brea-Olinda operations, you will realize that they are not presently being frac'd and that it is largely PDP with few remaining PUDs (the company site lists 20 drilling locations). Think more along the lines of conventional, in-fill drilling than what is typical in unconventional shale drilling (horizontal & frac'd). Not likely a material event here, even if they were not able to develop those 20 remaining locations. Remember, this field has been producing for 120+ years, well before hydraulic fracturing...
The Berry operations are primarily steam/water flood operations (secondary and tertiary recovery) so not as much of an issue there either, though clearly more legislation will likely make doing business as usual more difficult...but that shouldn't be anything new for companies that regularly operate in the republic of Kalifornia.
I believe the operators that have holdings in the largely undeveloped/untested Monterey Shale will find themselves far more vulnerable/impacted if the measures pass. Also of interest are the California offshore operations (Memorial Energy [MEMP]) owns several offshore platforms and the old PXP (now part of BHP) owns the old Point Arguello platform. I doubt those are impacted materially, which is surprising given how sensitive the issue but it remains to be seen. MEMP's buy of those properties a few years ago was well timed, with them getting the benefit of excellent pricing (above WTI) but long term it remains to be seen if it was worth it.
Overall, Linn's California operations may exhibit moderate growth, but it isn't the primary growth driver for the company and thus measures passed by the kooks in Kali aren't likely to have a major impact on Linn long term. California is more of a hold steady and extract/exploit. I'd expect to see more of their growth capital deployed in other oily basins.
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.
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.
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.
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.
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
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.
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.
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, $20 billion enterprise value. Hard to move the needle on 330+ million units.
The recent deals though have materially de-risked the company and largely removed the sustainability question.
I see you busted out the dadnorris1 and norrishappy #$%$ 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.
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.
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.
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.