Tue, Apr. 21, 9:22 AM
Tue, Apr. 21, 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.
Wed, Mar. 25, 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.
Tue, Mar. 10, 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.
Wed, Jan. 28, 12:44 PM
Dec. 23, 2014, 12:49 PM
- Stifel downgrades Breitburn Energy Partners (BBEP -1.7%), LRR Energy (LRE -4.4%) and New Source Energy Partners (NSLP -1.4%) to Hold from Buy due to pressure in the commodity markets and near-term concerns over credit facilities.
- The firm believes BBEP's ability to fund its reduced organic spending while funding the near-term shortfall in DPU coverage will be challenged, but it continues to believe the long-term outlook is attractive because of BBEP’s diversified geographic footprint.
- On LRE, Stifel says it is moving to the sidelines given near-term financing issues, even though LRE does not pose operational risk and the firm thinks the market likely is pricing in at least a DPU cut.
Dec. 1, 2014, 12:46 PM
Dec. 1, 2014, 12:21 PM
- Oil prices are rebounding, with both WTI and Brent crude up ~2%, but only a handful of energy stocks are rising.
- Exxon Mobil (XOM +1.4%) and Chevron (CVX +1.3%) are both up more than 1%, but the vast majority of energy stocks - led by Denbury Resources (DNR -8.9%), Newfield Exploration (NFX -7.6%) and Goodrich Petroleum (GDP -22.3%) - are seeing heavy selling.
- The SPDR Energy Select Sector ETF (XLE -1.2%) is lower despite gains in XOM and CVX, XLE’s two most heavily weighted stocks, as 38 of its 43 equity components trade lower; the ETF has now lost 7.5% since OPEC sent oil prices plunging by agreeing last Thursday not to cut production.
- Among XLE’s most actively traded components, Kinder Morgan (KMI -3.3%), Halliburton (HAL -3.4%), Transocean (RIG -6.1%) and Schlumberger (SLB -2.1%) are sharply lower.
- Other big decliners include BBEP -17.8%, SD -12.1%, SN -13%, CWEI -8.8%, CPE -14.6%, EXXI -18.9%, LRE -22.8%, REI -16.9%, SSE -15.3%.
- Other ETFs: ERX, VDE, OIH, XOP, ERY, DIG, DUG, IYE, XES, IEO, IEZ, PXE, FENY, PXJ, RYE, FXN, DDG
Nov. 3, 2014, 1:28 PM
- Oppenheimer downgrades LRR Energy (LRE -5.7%) to Perform from Outperform at Oppenheimer and withdraws its $20 price target, believing the company is in a difficult predicament as it enters a period of weaker oil prices with falling distribution coverage, limited capacity on the credit facility, and a rising cost of capital.
- While the firm is not concerned about distribution safety in 2015, the period up to 2016 is pivotal to distribution sustainability; the current negatives are balanced by a high current yield (12.3%), which keeps the firm from issuing an Underperform rating.
Sep. 29, 2014, 2:59 PM
- Legacy Reserves (LGCY +2.2%) is ranked as a Top Pick among upstream MLPs at RBC after the firm met with management at the recent Independent Petroleum Association conference; LGCY has extensive properties in the liquids-rich Permian Basin, and it maintains a strong hedging strategy in place to mitigate cash flow volatility.
- The firm rates Linn Energy (LINE +1.1%) at Outperform after a second large asset swap with Exxon that will bring an additional 300 drilling locations and bolsters the existing inventory and attractive production results experienced during H1.
- LRR Energy (LRE +1.4%) is rated only Sector Perform, but investors are paid a hefty 11.2% distribution even if the shares don't move.
Sep. 4, 2013, 10:48 AM
- Oppenheimer restarts coverage of energy MLPs, bullish on the asset class as a whole; the firm shows a bias in favor of investing in higher distribution growth, even if the yields are lower, and for owning general partners due to their incentive distribution rights structure.
- Started at Outperform: EQT Midstream (EQM +2.1%), Seadrill Partners (SDLP +0.7%), Tesoro Logistics (TLLP +1.6%), Memorial Production Partners (MEMP +2.4%), Western Gas Partners (WES +0.4%), Western Gas Equity Partners (WGP +0.7%).
- Started at Market Perform: Williams Partners (WPZ), Crosstex Energy (XTEX), ONEOK Partners (OKS), Genesis Energy (GEL).
- Also: New Source Energy (NSLP), Breitbrun Energy Partners (BBEP), LRR Energy (LRE), Mid-Con Energy Partners (MCEP).
Jul. 5, 2013, 11:32 AMBreitBurn Energy (BBEP -4.7%) is off its worst lows after CEO Halbert Washburn discloses buying 30K shares on July 3 at an average $14.92, worth ~$447K. Shares have dropped 20% since Linn Energy's SEC inquiry news, which prompted Hedgeye to dub BBEP "Linn Energy junior." Other upstream MLPs also are lower: VNR -5.6%, QRE -6.5%, LRE -7%. | 4 Comments
Jun. 6, 2013, 10:47 AMLRR Energy (LRE +7.9%) is surging after issuing a Q2 operating update: LRE estimates average net production for the two months ended May 31 was ~6,450 boe/day, and reaffirms FY 2013 operating guidance of 6,250-6,550 boe/day. Wells Fargo upgrades shares to Outperform with a $17 price target. | 1 Comment
Mar. 18, 2013, 5:33 PM
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