Nobody cares about that corrupt bankrupt financial entity, that performs a reverse split every year.
In my opinion, the major problem with CEQP is the renewal of the so called fixed fee and take or pay contracts. A lot of this contracts are up for renewal this year and next two years. The market is not sure if CEQP will be able to renew the contracts in favorable term, and thus does not beleive the current EBITDA numbers will be maintained . I believe that this uncertainty has lead to the worst case scenario being discounted. I am a buyer here under $9.
Lucius, I an not sure what is your problem. Just providing relevant info from 10 K for whoever did not read it so they can make informed decisions. But , god bless your, put me on ignore.
Contemporaneously with the closing of the Simplification Merger, Crestwood Midstream amended and restated its senior secured credit agreement to provide for a $1.5 billion revolving credit facility (the CMLP Credit Facility), which expires in September 2020. On September 30, 2015, Crestwood Midstream borrowed approximately $720 million under the CMLP Credit Facility to (i) repay all borrowings outstanding under its $1.0 billion credit facility, (ii) fund a distribution to CEQP of approximately $378.3 million for purposes of repaying (or, if applicable, satisfying and discharging) substantially all of its outstanding indebtedness and (iii) pay merger-related fees and expenses. As of December 31, 2015, Crestwood Midstream had $399.0 million of available capacity under its credit facility considering the most restrictive debt covenants in its credit agreement. Crestwood Midstream also has approximately $1.8 billion of senior notes outstanding as of December 31, 2015, with maturities ranging from 2020 to 2023. We may from time to time seek to retire or purchase our outstanding debt through cash purchases and/or exchanges for equity securities, in open market purchases, privately negotiated transactions, tender offers or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material. See Part IV, Item 15. Exhibits, Financial Statement Schedules, Note 8 for a more detailed discussion of the CMLP Credit Facility.
As of December 31, 2015, we were in compliance with all our debt covenants related to the CMLP credit facility and CMLP senior notes.
We are working to renew long-term storage and loading contracts associated with our COLT Hub operations. Several of these contracts expire in 2016 and we expect to extend the contract terms for several of our existing customers. We are also pursuing multiple pipeline and storage projects at the COLT terminal supported by long-term take-or-pay contracts.
Although the cash flows from our G&P operations are predominantly fee-based under contracts with original terms ranging from 5-20 years, the results of our G&P operations are significantly influenced by the volumes gathered and processed through our systems. During 2015, two of our G&P customers, Quicksilver and Sabine filed for protection under Chapter 11 of the U.S. Bankruptcy Code. In January 2016, Quicksilver executed an asset purchase agreement with a third party for the sale of its U.S. oil and gas assets. The sale is expected to close on March 31, 2016, pending certain closing conditions. On February 5, 2016, Quicksilver filed a motion to reject its gathering agreements with us. We filed an objection to this motion on February 26, 2016 and a hearing is scheduled in Delaware on March 4, 2016. We are in discussions with the third party regarding those agreements. We continue to provide services to Quicksilver, and the outcome of its restructuring process could have a material impact on our G&P segment's results of operations. Sabine continues to work with the bankruptcy court on its bankruptcy filing, and we continue to monitor their proceedings, and the outcome could impact our G&P segment's results of operations in the future.
Outlook and Trends
Our business objective is to create long-term value for our stakeholders by maximizing throughput on our assets, expanding our services and exercising prudent control of operating and administrative costs, resulting in stable operating margins and improving cash flows from operations. Our business strategy further depends on our ability to provide increased services to our customers at competitive fees and develop growth projects that can be financed appropriately.
We have positioned the Company to generate consistent results in a low commodity price environment. Many of our assets are located on long-term, core acreage dedications in shale plays which are economic to varying degrees based upon natural gas, NGL and crude oil prices, the availability of midstream infrastructure to flow production to market and the operational and financial condition of our diverse customer base. We believe the diversity of our asset portfolio, wide range of services provided and extensive customer portfolio, taken together, provides us with a positive forward view of our ability to be successful in the current market which has been impacted by prolonged low commodity prices. In addition, a substantial portion of the midstream services we provide to customers in the shale plays are based on fixed fee, take-or-pay or cost-of-service agreements that ensure a minimum level of cash flow regardless of actual commodity prices or volumetric throughput. We are actively working with our customers to further improve the profitability of their operations through the services we offer, and in certain instances, by adjusting our rate, service and/or volume commitment structures to incentivize them to utilize our services in the short-term while preserving long-term flexibility in a challenging market. In particular, we are in active discussions with a number of our customers regarding amendments and/or extensions of their contracts, and these discussions will continue into 2016.
In 2016, we are evaluating strategic actions to substantially de-risk the investment profile of Crestwood and position the Company to emerge from this challenging market environment as a stronger, better capitalized company. These are designed to address our near-term cost of capital limitations and position the Company for long-term value creation for all stakeholders when the market improves and include reducing capital expenditures, further reducing costs, divesting of assets, evaluating distributions and strengthening the balance sheet including repayment of indebtedness.
During 2015, we completed a number of cost-reduction efforts, including the Simplification Merger, and we decreased our on-going expenses related to operations, maintenance and general and administrative matters by $26.4 million during the year ended December 31, 2015 compared to 2014, excluding $29.4 million of upfront costs related to this cost savings initiative and the Simplification Merger. We continue to pursue additional opportunities to further reduce costs in 2016, which we believe will result in lower expenses in 2016 compared to 2015. In addition, we expect our 2016 capital expenditures to be limited to previously committed contractual projects around our existing asset footprint of approximately $50 million to $75 million in 2016.
Based on current operations, we expect financial results in 2016 that are relatively consistent with our 2015 results, despite continued anticipated depressed commodity prices. Through the execution of strategic efforts described above, we expect to reposition the Company for increasing stability and strength through a continued challenging market environment, which will over the long-term, best position us to achieve our chief business objective to create long-term value for our stakeholders.
I listened to the interview for the second time. I can't believe they spent 30 minutes talking without saying much. Sounded like paid advertisement.
If VNR can't raise capital of any sort, a deal of some sort will be reached with lenders. Since this is the last year with decent hedges, I will assume that starting from April (or earlier) all distributions (preferred and common) will be suspended and the cash directed to reduce the balance of secured debt. Survival mode from that point on, praying that commodity prices recover.
Not necessarily in my opinion. But what else can we expect in current commodity prices. If you read the BBEP earning release, under Liquidity, they talked about liquidity issues due to base redetermination for they secured borrowing facility. They have used $1.2 billions of 1.8billions capacity. They expected to be adjusted twice in April and October, and fall below what they currently own. VNR needs to act now to avoid a liquidity crunch , provided that they still have options. Whatever they do, it will surely dilute the common/preferred equity. Some people in this forum think that management can pull miracles. Well , time to wake up and face reality. Unless commodity price increase rapidly and sharply, nothing that management can do.
Donna, if you buy it now you also have to pay for the accrued interest . It's about $3100 per $100000 principal , that's why you need an extra payment.
If one buy bonds now , it requires 4 payments ( 1 year and a half ) to get almost all intitial investment back. If you believe VNR will survive for another 19 months , bonds are a no brainer. In any event they are the best way to invest in VNR by far. They currently trade cheaper than preferred and yield higher, lack of liquidity being a major negative.
Let's see what they say at the earnings call for Q4. But I suspect a major dilution event is coming , maybe through a private equity financing.
The borrowing base under our Reserve-Based Credit Facility is subject to adjustment from time to time but not less than on a semi-annual basis based on the projected discounted present value of estimated future net cash flows (as determined by the lenders’ petroleum engineers utilizing the lenders’ internal projection of future oil, natural gas and NGLs prices) from our proved oil, natural gas and NGLs reserves. Our next scheduled redetermination is in April 2016. Absent new acquisitions of oil and natural gas properties, if commodity prices further decline and banks lower their internal projections of oil, natural gas and NGLs prices, we will be subject to decreases in our borrowing base availability in the future. As a result, absent accretive acquisitions, to the extent available after unitholder distributions, debt service and capital expenditures, it is our current intention to utilize our excess cash flow during 2015 to reduce our borrowings under our Reserve-Based Credit Facility. Based upon current expectations, we believe existing liquidity and capital resources will be sufficient for the conduct of our business and operations for the forese
On June 3, 2015, the Company entered into the Eighth Amendment to the Credit Agreement which decreased its borrowing base from $2.0 billion to $1.6 billion. However, the Eighth Amendment provided for an automatic increase in the borrowing base of $200.0 million which became effective upon closing of the LRE Merger on October 5, 2015. In addition, the Eighth Amendment includes, among other provisions, an amendment of the debt to “Last Twelve Months Adjusted EBITDA” covenant whereby the Company shall not permit such ratio to be greater than 5.5 to 1.0 in 2015, 5.25 to 1.0 in 2016 and 4.5 to 1.0 starting in 2017 and beyond.
If they bought debt , in the balance sheet it would show credit to cash and debit unsecured notes (less cash available, less unsecured debt). In income statement it would show less interest expense occured from this debt thus more income . In cash flow statement would show less cash available in hand . There is no way in he'll that the secured debt owners will allow them to retire not secured debt before the secured debt. The reason they get away with distributing cash to equity holders is because their covenant for their line of credit assumed old EBITDA for the purpose of debt/EBITDA ratio. Once the current numbers are considered the ratio will deteriorate and distribution will be cut. Also a reevaluation of assets tied to the revolver debt will cut down the availability of the secured debt. Once that happens they have to pay the outstanding balance to adjust to current assets value. VNR knows it, secured and not secured creditors know it, shorts know it, small retail investors don't. They will be the suckers being deluted , and paying the creditors.