EV Energy Partners' Weak Coverage Ratio Remains A Concern
Albert Alfonso • 11 Comments
Albert Alfonso • 11 Comments
EV Energy Partners: The Price Is Finally Right
Douglas E. Johnston • 27 Comments
Douglas E. Johnston • 27 Comments
Thu, Apr. 28, 9:16 AM| Thu, Apr. 28, 9:16 AM
Wed, Apr. 27, 4:59 PM
- EV Energy Partners (NASDAQ:EVEP) -3.8% AH on news it is suspending cash distributions while electing to repurchase up to $35M in outstanding senior notes.
- EVEP says the repurchase of the notes at a substantial discount to par will create more long-term value for the company; it says repurchases of a total $147M of senior notes YTD 2016 and in Q4 2015 for $80M have reduced debt by $66.8M and cut annual interest expense by $9M.
- Now read EV Energy Partners should be OK until 2018
Thu, Apr. 21, 12:48 PM
Mon, Mar. 21, 3:16 PM
- Upstream MLPs likely will continue to face “an extremely challenging 2016" with low liquidity and high levels of debt, CIti analyst Faisel Khan says, expecting the group to exit Q1 with an average of ~80% drawn on their bank credit facilities.
- Khan downgrades Atlas Resource Partners (ARP -5.9%) to Sell from Neutral with a $0.25 price target, slashed from $3, saying ARP seems to be “running out of options to address leverage and liquidity concerns” and likely will be forced to file for Chapter 11 “either after the next round of borrowing base redetermination or post a potential breach of its debt covenants early next year."
- Cut to Neutral from Buy are EV Energy (EVEP -6.8%), which Faisel says has sufficient liquidity to survive the next round of borrowing base redetermination and has a strong sponsor that may come to its rescue but sees a potential breach of debt covenants next year, and Memorial Production Partners (MEMP -9%), which is drawn more than 70% on its credit facility and a potential borrowing base cut could "wipe out the entire liquidity."
Thu, Feb. 18, 11:48 AM
- Wells Fargo cuts its rating on all upstream MLPs in its coverage to Underperform, the firm's equivalent to a Sell rating, and downgrades its sector rating to Underweight, citing the MLPs' high default risk and its belief that many "could have zero equity value" when their hedges expire over the next 1-2 years.
- The upstream MLP's could have "very high" debt-to-EBITDA ratios over the next 12-24 months, and all could default on their debt payments during that time frame, according to Wells analyst Praneeth Satish.
- Satish says Mid-Con Energy (MCEP -1.9%), Linn Energy (LINE -14.9%) and Atlas Resource Partners (ARP -2.6%) have the greatest risk of default in the near-term, while Breitburn Energy (BBEP +2.4%), EV Energy (EVEP -6.9%), Legacy Reserves (LGCY -7.9%), Memorial Production Partners (MEMP -6.4%), LINE and MCEP have the greatest risk of default in the medium term.
- The analyst cuts his rating on all the above companies, plus LinnCo (LNCO -10.7%), to Underperform from Market Perform.
Wed, Jan. 6, 12:47 PM
- J.P. Morgan says it expects the harsh oil and gas market conditions will force distribution cuts in 2016 from EV Energy Partners (EVEP -3%), Memorial Production Partners (MEMP -4.6%) and Legacy Reserves (LGCY -5.9%).
- "The market has come to the realization that supportive yield-based valuation metrics remain inadequate as distributions appear unsustainable against liquidity and balance sheet concerns,” JPM analyst Gabriel Daoud writes.
- The firm also downgrades Vanguard Natural Resources (VNR +0.4%) to Neutral from Overweight with a $5 price target, cut in half from $10, and lowers its price target for BP Prudhoe Bay Royalty Trust (BPT -6.1%) to $11 from $18.
Dec. 30, 2015, 5:38 PM
Dec. 30, 2015, 12:46 PM
- Hit hard two days ago as oil fell below $37/barrel, oil/gas industry names are seeing more pain today after the EIA reported U.S. crude inventories rose by 2.6M barrels last week - expectations were for a decline. The report comes shortly after the API estimated U.S. crude inventories rose by 2.9M barrels during the most recent weekly period.
- After rising yesterday, WTI crude is down 3.1% to $36.71/barrel. Brent crude is down 2.9% to $36.69/barrel. Nymex natural gas is down 7.3% to $2.20/MMBtu.
- The biggest decliners include Chesapeake Energy (CHK -4.1%), Petrobras (PBR -4.1%), Linn Energy (LINE -7.5%), Gulfport Energy (GPOR -5.2%), SeaDrill (SDRL -5.5%), MV Oil Trust (MVO -4.5%), EV Energy Partners (EVEP -6.7%), and Southwestern Energy (SWN -5.7%).
- Other notable decliners include Hercules Offshore (HERO -5.2%), Marathon Oil (MRO -4%), Devon Energy (DVN -4.4%), Encana (ECA -4.1%), Range Resources (RRC -4.7%), Sandridge Mississippian Trust (SDR -4%), Newfield Exploration (NFX -3.8%), BP Prudhoe Bay Royalty Trust (BPT -3.1%), Enerplus (ERF -3.9%), and ONEOK Partners (OKS -2.5%).
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Nov. 9, 2015, 3:48 PM
- EV Energy Partners (EVEP -26.1%) sinks by more than 25% after reporting a 54% Y/Y drop in Q3 revenue, falling gar short of expectations, and warning distributable cash flow likely will fall below levels needed to maintain its $0.50/share quarterly distribution.
- "Over the next several months, as the budgeting process for 2016 is completed, EVEP will address its future quarterly distribution levels and policies to align future distributions with projected distributable cash flow," the company says.
- Q3 production was 9.7 Bcf of natural gas, 212 Mbbl of oil and 526 Mbbl of natural gas liquids, or ~153M cfe/day, a 13% Y/Y decrease and 6% lower Q/Q.
Nov. 9, 2015, 12:45 PM
Sep. 4, 2015, 12:45 PM
Aug. 24, 2015, 10:59 AM
- EV Energy (EVEP -6.2%) is downgraded to Underperform from Neutral with a $5 price target, cut from $13, at Baird, which notes that after selling its UEO assets for $575M, the company has yet to fill the cash flow gap required to maintain its already haircut distribution into 2016.
- With an onerous cost of equity, EVEP will be hard pressed to win an auction, and buying assets even at size may not do enough to hold off another distribution cut, the firm says.
Aug. 13, 2015, 12:45 PM
Jun. 15, 2015, 12:30 PM
- Wunderlich analyst Jay Dobson finds a few worthwhile investments in an otherwise weak upstream energy exploration MLP sector that has too much debt on average and has suffered from the dramatic decline in oil, natural gas and natural gas liquids prices since late 2014.
- Also, a lack of hedging discipline has left the industry more exposed to the declining prices and, in some cases, with very limited financial flexibility, Dobson says.
- But four Buy-rated MLPs are best positioned for the current energy environment, sharing the attributes of solid liquidity, a runway for improvement, and aggressive action, Dobson says: Memorial Production Partners (MEMP +0.3%), Vanguard Natural Resources (VNR +1.8%), LRR Energy (LRE +3.5%) and Legacy Reserves (LGCY +0.4%).
- Rated Hold: ARP, BBEP, MCEP, NSLP, EVEP
Apr. 15, 2015, 3:54 PM
- EV Energy (EVEP +9.7%) is upgraded to Outperform from Sector Perform with a $22 stock price target, raised from $20, at RBC Capital, which notes that EVEP's recently announced sale of its 21% stake in the Utica East Ohio UEO midstream project for $575M marks an attractive price.
- With re-determination risk passed and liquidity at a max, the firm believes the potential reinvestment of proceeds marks a visible catalyst and shifts EVEP's risk/reward profile for the better.
Feb. 2, 2015, 2:58 PM
- EV Energy Partners (EVEP +10.1%) is strongly higher despite its announcement earlier it was cutting its Q4 cash distribution to $0.50/unit from its $0.774 payout for Q3, and estimates a 2015 distribution coverage ratio of more than 1.15x.
- EVEP says coverage could improve if it is able to divest its midstream assets, Utica acreage or Eagle Ford acreage.
- EVEP also said it expects Q4 daily production to average ~171M cf/day, down 2.7% from Q3 levels, which lifted overall 2014 production to ~63.55B cf, up 3% Y/Y; EVEP foresees 59.34B-64.94B cf of natural gas during 2015.
- Reduces 2015 E&P capex plans to $55M-$65M vs. ~$100M for 2014.
EV Energy Partners LP operates as a master limited partnership, which is engaged in acquiring, producing and developing oil and natural gas properties. The company operates through two segments: Exploration and Production and Midstream. The Exploration and Production segment is responsible for... More
Sector: Basic Materials
Industry: Oil & Gas Drilling & Exploration
Country: United States
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