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arbtrdr

arbtrdr
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  • Baytex Energy Expands Into The Eagle Ford [View article]
    On acquitition deals a couple things usually happen. The price of the acquirer goes down. Then people do a bit of reading about the deal and the price then moves either up or down. In the case of BTE the price moved up .80US in a couple hours as people relized what the deal included.

    The most important thing about this deal is what BTE bought - using an analogy I read elsewhere - was the very best house on the very best street in the very best town. It bought acreage that is completely proved and with one of the three best operators in the US.

    Hivoltage - wondering why you are suggesting buying Saskatchewan small properties? Many wells there do not even have electricity and are drilled using generators. trucking oil to a terminal and using rail is not cost effective and if oil prices drop then heavy oil is mostly dead.

    I bought a bunch of BTE when it cinverted to a CanRoy. Have reinvested by dividends and doubled up yesterday. BTE will be able to comfortably pay a 6% dividend and reitre a significant amount of the assumed debt. Also producting about $350M in cash from the US takes away any exchange issues. They cvan pay the USD denominated debt with US dollars.

    Buying EF also gave BTE two things - A small operated interest where they will drill 7 or 8 wells this year and it helps as the author stated with the takeaway problem for WCS oil. That problem is not going away. The reason is simple - operators are becoming less and less wiling to guarantee volumes to get pipelines built. OKS had a line fail in the Bakken and BWP/WPZ and MWE/KMP are both having problems getting one going for NGLs out of the Marcellus. Ditto with the EPD comment that committments are becoming more difficult. This means dependence on rail or truck. We all know what a disaster that has been in the last months. Thus the WTI/WCS spread is likely to stay high while the Cushing differential is going to come down as more capability comes on line to get oil to the gulf.
    Feb 8 07:01 PM | 4 Likes Like |Link to Comment
  • Propane Prices Have Been Rising. Why? Who Benefits? Who Is Hurt? [View article]
    Last - EPD, MWE and others in your article are MLPs and do not and never have paid a dividend. They are partnerships that pay distributions and tax liability is reported using a K-1. This is very important and all potential investors should understand the differences and tax consequences before investing in a MLP.
    Jan 10 04:26 PM | 4 Likes Like |Link to Comment
  • MarkWest Is A Must Sell [View article]
    Our author either does not get that or refuses to do so. When someone makes very public statements about a company and some of them are wrong I accept it as a simple mistake. When they refuse to admit or discuss their comments or error that is unforgivable.
    Dec 18 05:26 PM | 4 Likes Like |Link to Comment
  • Enterprise Products Partners Distributes Too Little [View article]
    Scary article. It also included the following: "In fact while EPD pays out far less than it could, it has shown strong distribution growth of 6.2% in the last quarter". In fact the distribution growth was 6.2% for the last YEAR! Those facts wrong as well.

    As others have stated by retaining earnings it gives several benefits - fewer units issued and thus higher DCF per unit, a cushion for being able to increase the rate of increases if rising interest rates effect unit prices, and most important retaining the earnings allows EPD to build organic projects with a return in the 15% a year area that will provide even more $$ for its holders in the future.

    I have owned EPD through a predecessor company and think they know what they are doing. Looking at KMP and its not even covering the distribution because of some operational issues leads to problems much bigger than what to do with a couple hundred million $$ a quarter.
    Dec 13 09:07 AM | 4 Likes Like |Link to Comment
  • Over-Loved MarkWest Under-Delivers [View article]
    Some thoughts -

    MWE has some 19 major projects in service (3 finished in the last few days) and one more to come this quarter and 4 or 5 next quarter. This will significantly increase DCF. Your calculations here are definately a bit light.

    Problems this quarter - 4 of them. A NGL pipeline break was an act of God and fixed, SXL had pipeline issues, MWE had startup issues and will have more, and MGL prices - hopeless until at least 2015.

    As to units issued - Did yuor calculation forget the 4M class B units that vest midyear. I get an even higher total, but think MWE will issue about a 50/50 mix this year. I think you forgot the ATM units they have been issuing - this part is not good.

    As to shorting MWE - always painful with a MLP because of the need to pay the distribution and the change of ownership. Would think some short term issues but longer term MWE is growing and with fixed fees.
    Nov 13 08:58 AM | 4 Likes Like |Link to Comment
  • Ponzi Or MLP? Linn Energy's Unsustainable Distributions [View article]
    Only 1 question - Why are so many comments about your articles deleted?
    Jul 12 06:26 PM | 4 Likes Like |Link to Comment
  • Master Limited Partnerships And Your IRA [View article]
    As so many have chimed in the author is 100% wrong. On sale of a MLP there is no UBTI generated. Have dealt with the IRS on this twice. They are not knowledgeable, but they can read. The church analogy is backwards.

    UBTI is all you need to worry about with MLPs inside an IRA. On sale all $$ taken out are ordinary income. In a ROTH no taxes except maybe UBTI. There are proposed ROTRH changes, but nothing passed by Congress yet.
    Dec 7 09:37 PM | 4 Likes Like |Link to Comment
  • Why Dividend Stock Kinder Morgan Is A Buy And 4 Ancillary Stocks to Sell [View article]
    Would have been better if the financial comparison chart had used DCF (distributable cash flow) instead of EPS. EPS not a very good metric for comparing MLPs. That said, the MLPs without GPs have a significantly lower cost of capital, while the others (especially Kinder) has a higher cost. Would it not make sense that ALL the Kinder family would have slower growth than those that have lower costs? Would not the high cost of capital slow growth in KMP/KMR et. al. and thus slow the growth in KMI even if it is leveraged?
    Nov 1 10:44 AM | 4 Likes Like |Link to Comment
  • MLPs Extremely Overvalued Based On Historical Relative Yield [View article]
    The problem is the basis thesis of comparing telecoms etc. to MLPs. Telecoms are constantly needed to pay for current technology and to keep their customers. MLPs in the midstream areas has collections locked up for years and the barriers to competing pipelines is huge!

    Agreed that increasing interest rates will put pressure on MLP unit prices, but the historical correlation is only about .55. If a MLP can increase its distribution then it can offset any interest rate increase.pressure. This has been discussed on the IV board in great detail. MWE for example will increase about 15% this year and again in 2012. An increase of 2 or 3% in interest rates would not cause them any worries. Similarly, EPD has steadily increased through good times and bad for some 7 years.

    BWP, certainly out of favor today has almost totally regulated business and will continue to grow slowly.

    I also suggest you make sure your numbers are correct. Splits often create problems as Bloomberg, Yahoo and others are slow to update.
    Sep 4 02:54 PM | 4 Likes Like |Link to Comment
  • Weekly Intelligence For Master Limited Partnership Investors [View article]
    Great summary. I would try to add is ther contact phone numbers and times for the conference calls. Morgan Stanley has this on thier MLP summary reports and it makes getting to a conference call much easier.

    My only comment would be that BWP actually has good assets. What they lacked was the ability to figure out how to manage them when the market for moving NG changed abut 3 years ago. BWP made a choice not to renew contracts at a lower rate and instead sell space in the spot market until demand and rates improve. This caused about 1/3 of their problem as lower renewal rates would pay them more than the $$ today, but cap upside in the future. Hard to fault BWP on buying Petal from EPD. It is a world class facility, but nobody is going to store gas today with rates lower in the future. This is also going to hurt the other MLPs that have NG storage like Niska, BPL, and PAA in varying degrees. But again, this market will come back.
    Feb 16 08:49 AM | 3 Likes Like |Link to Comment
  • End Of The Road For Boardwalk Pipeline Partners [View article]
    Couple of thoughts. Was very strange they are projecting no income from either their new projects going into service or storage. Understand that gas is backwardated, but it still is useful during the winter and fall heating bseasons and to provide a steady supply for utility demand.
    Your headline suggests BWP is going out of business. Would you reaaly mean that? Do not think do. BWP put forth the blackest picture possible while still providing about .40 of DCF. They plan on paying down debt to a debt/EBITDA ratio of about 4X. That is lower than many other MLPs.
    I also own KMP, but it pays out 100% of its cash and it too has lots of issues with ipies being in the wrong place or going in the wrong direction for transport. Almost every other MLP is a better bet, but KMP is toward the bottom of thatr list for 2014 with slowing growth and a low DCF increase.
    As to BWP - It is and will continue to generate about $1.50 or so in DCF this year with projects coming on line in G&P that will provide $$ beginnig late 2014. What is BWP worth - I have no idea but the CS estimnate of about $20 over the next 4 or 5 years seems about right.
    Feb 10 10:42 AM | 3 Likes Like |Link to Comment
  • Realty Income: Lower Rates Should Provide A Boost [View article]
    Just wondering how moves in interest rates over a period of a week or even a couple months can materially effect O? Their debt last time I looked they had about $400M on their revolver and no debt due until late 2015. If they issued debt to get rid of the $400M the difference of about .1% would be about 400K a year. Not very significant for a multi billion $$ company. Agree O is a good long term hold. FYI - I have owned O since the mid 1990s through thick and thin. 2013 was ugly but nothing really materially changed for O except moving to higher quality tenants and thus a lower return. Am guessing the market did not like the lower return on investment with better tenants.
    Jan 24 12:40 PM | 3 Likes Like |Link to Comment
  • Natural Resource Partners: One Response To The Distribution Cut [View article]
    You did not follow your own rule. I do note that NRP is excellent on answering questions made using the telephone. Sort of archaic, but effective. They have executed their diversification plan well and with the retained cash can continue to both delever and expand into non coal investments. Am personally a bit surprised they cut to .35 and a lower cut was certainly possible.

    Last, a comment on NRP being a MLP is definitely a good idea. Many investors buy and have no idea they are going to receive a K-1. For a midsized MLP last year some 5000 calls received on this. Please just a couple sentences on the tax differences with MLPs. OK?
    Jan 13 09:05 AM | 3 Likes Like |Link to Comment
  • 7 Challenger Dogs Chase 10% To 27% December Upsides [View article]
    Great article but truly scary in that many of the companies mentioned are MLPs. Would it not be important to tell the difference between getting a dividend taxable at 15% to most taxpayers using a 1099B and a partnership where the distributions (the pay NO dividends) are reported using company K-1s. Much of the distributions are tax deferred, but there is recapture when you sell that can actually create a tax bill greater than the amount received on a sale for long term holders.
    Jan 10 01:25 PM | 3 Likes Like |Link to Comment
  • 3 Aggressively Growing High-Yield MLP Plays For 2014 And Beyond [View article]
    Interesting choices and comments. First a comment that investors need to understand MLPs a partnerships and as such they have very different tax consequences both for filing taxes and on sale.

    You indicate investors" should also consider the distribution record of the company. I value past distribution growth highly as it suggests distribution continuity and lends credibility to management. Three top MLP which have earned reputation." APL has a very different reputation. From two failed acquisition projects to cutting their distribution from .96 to .15 in 2008/2009; APL has not always exactly comer through. They do have new management, but the current team again has not shown the ability to move distributions up on a regular basis. The jury is still out on this one.

    As to PAA - storage has been continually strong and PAA is one of the best in that segment along with MMP. No problems with suggesting this except it is a bit pricey with a yield that could get hit if and when we get a spike in interest rates.

    FYI - I hold all three of these MLPs - PAA and APL for over 10 years. None of them are in my top 5 holdings for MLPs. EPD and MWE are.

    KMP is a huge MLP. It also is having issues in growing as fast as before. Some of this is simply because it is so huge. Some is because not all of their projects have played out as well as hoped. KMP seems to be stretching in an attempt to force the DCF and raise the distributions by an little bit too much. And no, they currently do not cover their distribution and share fully 50% of it with their GP. They are a great company but there are probably better investments in the next couple years out there in the MLP arena like EPD and MWE.
    Jan 10 09:02 AM | 3 Likes Like |Link to Comment
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