225 units doesn't sound like short covering, likely a retail buyer just messed up and forget to set a limit. I put in silly bids on the buy side, got some 2016 calls yesterday for easily a buck under the market, someone screwed up! Sorry. I have absurd sell orders riding off and on, but it's been awhile since someone bit, likely there are a bunch of other guys fishing below me.
Coming off the JPM news yesterday, it didn't pull back for profit taking, and we're now solidly in the $32's. That in spite of no distribution increase (yet). That's pretty encouraging, we're a bit farther advanced that I thought we would be at this time.
What's next? Q4, but that could be confusing. Management guided up, weather regardless, and NGL pricing has firmed, the basic metrics should be good. But, apparently they closed the Berry transaction before the end of the quarter. That will make the balance sheet look good, but if they have to account for new units issued in the "DCF" calc, the headline coverage number could be abysmal. Granted, there will be explanatory noises, but I'm not sure what they can say, given the very restricted information they provided Q3. The SEC is out of their hair for the moment, but they have to tow the line, presumably more S-4's will be coming.
We didn't even get adjusted EBITDA, so an analysis of their leverage position will not be automatic, you'll have to calc it based on DCF and then compare that to debt/DCF of the other upstreams . . . which I'll do, so will others I'm sure, but what will the "press" say about the earnings release? Could be problematic.
By the way, how unfair is it that LINE has to abandon the normal DCF and EBITDA disclosures, while all the other MLP's (or most of them) are still firing away?
I'm not sure where I read it, but the available pool of properties suitable for MLP's in the hands of third parties is apparently vast in comparison to what they've already acquired. LINE's size means they can handle bigger acquisitions, or so the argument goes, properties BBEP and VNR couldn't compete for.
Re: state reporting, I assume those packages are available in turbotax, but I don't know, never used it. Most of the time the gross income is not high enough to require filing, I think I filed in three or four states last year.
Crude was flat when I wrote that. You won't see much correlation, crude is down over the past couple weeks, just about all the upstreams are up, some dramatically.
When were they going to pay Q4, when have they always paid it? Mid February. When are the paying the distribution instead? One third mid January, one third mid February and one third mid March. The median of those dates is . . .
See, now we're up 50 cents, for what possible reason? There is none, it's best just to relax your mind when it comes to these little MLP's and judge their market actions over weeks and months, you can go crazy looking at a day or two. I think the bottom line is this has recovered from the "non offering" and has repriced to a lower yield. Probably it will plateau here for awhile, but if you checked back in four months we could be at the next level, maybe trading in the $23's. So long as NGP doesn't screw this up somehow, no way should it be yielding higher than 9% over time.
My dad used to say, "hold 'er Knute, she's headed for the rhubarb!". I assumed that was some sort of farm analogy, and I'm taking license assuming "nute" was someone's name, presumably the guy trying to keep the animal in question from getting to the (poisonous) rhubarb leaves, but you get the idea.
Kaiser managed a few barbs on twitter of course. I loved this one; "impromptu lunch w old friend / MLP banker (equity origination) today.. 'hopefully i'll have moved on before my job ceases to exist'. You can always tell when someone is reaching when they try to support their fading position by quoting some unnamed friend who supposedly is hooked into to information us mere mortals can't obtain.
Well, it's never sounded reasonable to the market! LINE has been the lowest yielding upstream in recent times, in the 7's. VNR has been in the 8-9 range. Even if LINE gets back to 7, you can't really expect VNR to follow, it's tiny in comparison and lesser known. Maybe someday, but that wouldn't happen overnight, or in a year.
Regarding my attempt at the l-word post, it was impossible. I chopped up the l-word into several chunks, deleted the front and end parts, and put nonsense words in between, but their program still figured it out. Amazing.
The question is whether a novice can prepare their own tax return, and the answer is yes, with a high school education and the willingness to read and do some thinking. You need to track tax basis, passive losses and potential recapture items by unit tranche, and that requires a spreadsheet. I'll try and post an l-word to an example below, but no matter how I chop up the l-word, Yahee may dump the post, it's program to prevent such posts is far superior to the entire message board programming.
If that's greek to you, you're in a no win situation. Should you take your return to a CPA? Maybe, but in my experience very few would have the knowledge, or be willing to bill you for the time to prepare such a spreadsheet. Sometimes you just have to live with inaccuracy, and as Liz suggests, just dump into turbotax and pray.
I don't have any problem with them making acquisitions, so long as it doesn't stretch management beyond their capabilities. Even if a given acquisition is only marginally accretive it broadens the base, makes an incident like the Texas drilling shortfall less likely to have a material effect on coverage.
There's no practical limit to how large this MLP can be, indeed, suppose it vacuumed in all the other upstreams and you had one giant merged MLP remaining (still small compared to the majors). Think of all that compliance and middle management cost savings! The effect of weather or one bad drilling result would be overwhelmed by the norm, coverage would end up being much more stable.
"tax law requires that you separately track the activity of each PTP. What is that?"
Publicly traded partnership. It's a passive loss thing, you can't claim a loss from a PTP against other passive income, it can only offset passive income from the same PTP (or be deducted when there's a complete disposition of the PTP).
Nah, Scoot, you're barking up the wrong tree on this one. As to their silence . . . could they have actually learned something? I know, probably they were just busy buying new cars for the wives for xmas, but it's possible!
Ah, but the K-1 gives you nothing, the information reported there is just on the internal activity of the partnership, not anything related to your unit sales. The ordinary gain potential is listed on a supplemental information page, which may look official, but it's just a piece of paper. And, if you track your own units, then you'll quickly realize that supplemental information is laughably inaccurate anyway.
I've had a few partnership issues come up with agents (not auditors, that just about can't happen, and never involving MLP's). There were only two disputes they fought out for any length of time. One we rolled on, because we had already closed out the transaction, and the IRS offer was less costly than the professional fees to fight any further. What really galled me is that the agent went up and down the halls of the Seattle federal building crowing how he had beat me.
The second one was with an agent who was ignorant and just refused to listen to reason. That went to appeals, sat there for five years, and was still pending when I retired! Agents are just lowly federal workers with fancy titles, if they had any talent they wouldn't be there. Many don't even have desks, they work out of their homes. Auditors, shoot, H&R Block temp workers know more about tax law.
Right., but I don't think that will happen unless the perception is in place that distribution growth is back on line, otherwise the BRY acquisition will look like an unproductive act of desperation (partially true of course).