Little LRR Energy Has Big Hedges, Strong Prospects
Alpha Wolf • 44 Comments
Alpha Wolf • 44 Comments
Is LRR Energy's 14.30% Yield Worth The Risk?
Sep. 18, 2015, 9:54 AM
- LRR Energy (NYSE:LRE) declares $0.1250/share quarterly dividend, in line with previous. (Pro-rated for July & Aug.)
- Forward yield 10.96%
- Payable Oct. 15; for shareholders of record Oct. 1; ex-div Sept. 29.
Aug. 26, 2015, 12:45 PM
Aug. 21, 2015, 11:57 AM
- Linn Energy (LINE -7.9%) is leading the upstream MLPs lower, with Hedgeye's Kevin Kaiser trying to get confirmation on chatter CFO Kolja Rockov is facing financial difficulties and had to cancel an $8M house he was building.
- LinnCo (LNCO -5.6%)
- Breitburn Energy (BBEP -1.3%), Memorial Production (MEMP -5.2%), LRR Energy (LRE -5.9%), Eagle Rock Energy (EROC -5.3%), Vanguard Natural Resource (VNR -7.4%).
Jul. 30, 2015, 4:33 PM
- LRR Energy (NYSE:LRE): Q2 EPS of -$0.52 may not be comparable to consensus of $0.25.
- Revenue of $10.7M (-38.5% Y/Y) misses by $20.62M.
Jul. 17, 2015, 1:04 PM
- LRR Energy (NYSE:LRE) declares $0.1875/share quarterly dividend, in line with previous.
- Forward yield 12.58%
- Payable Aug. 14; for shareholders of record July 31; ex-div July 29.
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
May 26, 2015, 4:59 PM
- Low oil and gas prices contributed to Vanguard Natural Resources' (NASDAQ:VNR) decision to make two significant acquisitions in less than 40 days - acquiring Eagle Rock Energy Partners (NASDAQ:EROC) one month after a deal to buy LRR Energy (NYSE:LRE) - CFO Richard Robert said in a conference call today, noting the company received consent from LRE to proceed with both deals simultaneously.
- Robert says the expanded VNR will be well positioned when the commodity price recovers, and that the deals strengthen the company’s asset base while also boosting its liquidity and flexibility to reduce its debts moving forward.
- VNR says it is postponing its June 4 annual meeting for a to-be-determined date so unitholders can also vote to approve the EROC deal.
Apr. 30, 2015, 4:44 PM
- LRR Energy (NYSE:LRE): Q1 EPS of -$0.82 may not be comparable to consensus of $0.20.
- Revenue of $36.2M (+39.1% Y/Y) beats by $5.78M.
Apr. 21, 2015, 9:22 AM
Apr. 21, 2015, 7:48 AM
- Vanguard Natural Resources (NASDAQ:VNR) agrees to acquire LRR Energy (NYSE:LRE) in a cash and stock deal totaling $539M.
- The deal will be a tax-free unit-for-unit transaction with an exchange ratio of 0.55 VNR common units per LRE common unit.
- VNR says LRE's long-life, low-decline, mature assets are well-suited for its upstream MLP model, the assets add additional scale to its existing Permian and Arkoma Basins, and production of ~40MM cfe/day will increase its current production by 10%.
- VNR +3.2%, LRE +7.9% premarket.
Apr. 20, 2015, 11:11 PM
- LRR Energy (NYSE:LRE) declares $0.1875/share quarterly dividend, -62.3% decrease from prior dividend of $0.4975.
- Forward yield 9.47%
- Payable May 15; for shareholders of record May 1; ex-div April 29.
Mar. 25, 2015, 10:58 AM
- LRR Energy (LRE -3.2%) is downgraded to Sell from Neutral with a $5 price target, cut from $7, at UBS, which notes concerns about leverage and liquidity.
- LRE recently said that with the upcoming debt re-determination, there is potential for a cut to its borrowing base; the company has a $1MM capital budget for 2015 and $20M of debt available before the re-determination, and the firm wonders why a distribution cut is not at the top of management's list of alternatives.
- While UBS believes there could be some impacts to debt facilities during the spring re-determination, it is even more apprehensive about the fall if prices remain weak, and the oil price swoon highlights these concerns.
Mar. 10, 2015, 2:38 PM
- LRR Energy (LRE -2.6%) may suffer a “significant" distribution cut in 2015, perhaps as much as a 66% cut in Q1, as the company is "simply incapable of conducting business with a yield approaching 28%," Oppenheimer analyst Bernard Colson writes.
- LRE may be overdrawn on its borrowing base soon, which may lead to expensive second-lien financing from its bank group, Colson adds.
- LRE is known to be experiencing tight liquidity, which would be further limited in May when its borrowing base gets re-determined.
Mar. 3, 2015, 5:07 PM
- LRR Energy (NYSE:LRE): Q4 EPS of $1.12 beats by $0.81.
- Revenue of $96.1M (+212.6% Y/Y) beats by $63.14M.
Mar. 2, 2015, 5:35 PM
Feb. 17, 2015, 2:59 PM
- Upstream MLPs have outperformed to start 2015, generating average total returns of 10%, but yields have also come down from their peak to ~20% YTD, and Wunderlich analyst Abhishek Sinha thinks the average yield will continue to slip to 12%-14%, as more companies are forced to cut distributions.
- The analyst expects cuts to come from Vanguard Natural Resources (NASDAQ:VNR), Legacy Reserves (NASDAQ:LGCY) and LRR Energy (NYSE:LRE), following the likes of EV Energy Partners (NASDAQ:EVEP), Breitburn Energy Partners (NASDAQ:BBEP) and New Source Energy Partners (NYSE:NSLP).
- Sinha also says he is less concerned that Viper Energy Partners (NASDAQ:VNOM) could be hurt by rig count reductions after parent Diamondback Energy (NASDAQ:FANG) reaffirmed its intentions to continue to run its two-rig program on VNOM’s acreage.
LRR Energy LP is engaged in acquiring, exploitation and developing producing oil and natural gas properties in North America.
Sector: Basic Materials
Industry: Independent Oil & Gas
Country: United States
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