I think its really about the likelihood of the ARP distribution being lowered or eliminated later this year. They wouldn't want to make a distribution in August and then have to eliminate it in November.
Of course, the even worse possibility is that we are so financially strapped that there just isn't anything to pay out.
I think you don't understand how this works. ATLS will still receive the distribution from ARP units.
What the ATLS announcement tells you is that its highly likely that ARP will be further reducing or stopping the distribution later this year. ATLS board doesn't want a distribution this quarter and then nothing the following quarter - rather they will wait to see the landscape in 2016 and see if things are better - if so, then pay a distribution.
The problem is that soon the debt covenants will kick in and the distribution will be eliminated anyways. (by soon I'm saying around the end of the year, early next year).
So better to bite the bullet, bring down the debt, allow for aggressive expansion when opportunity presents itself. And by eliminating debt at reduced costs - we lower our longer term interest expense and then if/when things get better the distribution can grow quicker.
As our bonds move downwards, it is time for management to suspend the distribution and purchase outstanding debt at reduced prices.
We owe 1.5 Billion give or take. In two years we could actually put a decent sized dent in that. Last traded around $67. In two years we could reduce debt by $300 million + if we could purchase around these prices instead of paying out the distribution.
We are in a bad spot. Its time to be grown up about it. Not only does it strengthen our balance sheet - there is the cumulative effect of lowering interest expense. And it would put us in a stronger position to expand operations if/when prices recover. We have a lot of drilling locations and should be ready to strike should NG and or oil recover over the next couple of years.