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Sanchez Midstream Partners LP's (SNMP) CEO Gerry Willinger on Q4 2017 Results - Earnings Call Transcript

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Sanchez Midstream Partners LP (NYSE:SNMP) Q4 2017 Results Earnings Conference Call March 9, 2018 11:00 AM ET


Chuck Ward - CFO

Gerry Willinger - CEO

John Happ - SVP of Marketing and Midstream


TJ Schultz - RBC Capital

Colton Bean - Tudor, Pickering, Holt and Company

Matt Schmid - Stephens

Sunil Sibal - Seaport Global Securities

Georg Venturatos - Johnson Rice

Scott Fowler - Truckers Advocate, Incorporated

Jay Abella - Investment Partners


Good morning, and welcome to Sanchez Midstream Partners Fourth Quarter 2017 Earnings Conference Call. My name is Roco, and I will be moderating today's call. [Operator Instructions]

I would now like to turn the call over to Chuck Ward, Chief Financial Officer of Sanchez Midstream Partners. Mr. Ward, you may begin.

Chuck Ward

Good morning and thanks for joining us. With me this morning is Gerry Willinger, our Chief Executive Officer; John Happ, our Senior Vice President of Marketing and Midstream.

Just a few quick notes before we get started, we released our fourth quarter 2017 earnings report this morning and additionally we plan to file our 10-K today after market close. The earnings release along with our latest investor presentations are and will be available on our website, www.sanchezmidstream.com. The discussion this morning will include forward-looking statements, which are subject to certain risks and uncertainties. These are described more fully in our documents on file with the SEC, which are also available on our website.

And finally, we will use non-GAAP financial measures in this morning's discussion to help our unit holders and the investment community better understand our operating performance. Our earnings release is available on our website and includes an appendix that reconciles these non-GAAP financial measures to GAAP measures.

And with that, I would like to turn the call over to Gerry

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Comments (16)

andysbling profile picture
my average price is 13 so im down a little but when you add the 6 payouts ive recieved its $$$...holding long and getting paid for any risk...this Energy market is now in the 1st inning of a bull run....
Hampton108 profile picture
I agree with Tyler, SNMP is so under the radar Santa Claus doesn’t even know who or where they are, and less for some unforeseen reason, cutting the dividend would serve no purpose. May not be a long time hold,..but I’m...

Long: SNMP
tyler.freeborn profile picture
So, we had a few analysts chime in and . . . not one word about the B preferred issue and the implications of the present market price on that. Incredible, it's about all that matters.

Lots of support for the distribution from management, that's nice. I am surprised we have to wait so long for 2018 guidance.

Still, the bottom line appears to be that you can buy or hold this with a high degree of confidence you'll get paid, and given the huge yield, that's not insignificant. This might be one of the most solid yields of this size we've seen since the Financial Crisis, massive coverage, little capex requirements, little debt. The marriage with a depressed Sanchez and the B preferreds may keep the market skeptical, but the cash is flowing, and it seems there's little reason to expect it won't continue.
i have a feeling however, after the "market isnt giving us credit for the distribution" comments, eventually if we dont see any price appreciation, and by proxy yield lowering, they will cut just because the yield is so high.
tyler.freeborn profile picture
Well, what does the market know about this security anyway? It's so small there aren't even options. Maybe the yield alone is enough for just about everyone to have a Cramer like reaction and assume something is wrong . . . which, there is. But not this bad!

I bought a little more at $10.90 after reading this, but I may take down a more significant additional position next week, if the market allows (and there's no reason to expect it won't). I'm going to mess around this weekend with the numbers, see what effect conversion would have with this kind of cash flow. That 2018 guidance would be nice to have, but it seems like management is saying the 1.5 coverage isn't a fluke.
id love it to stay where it is so i can load up, but i just have this feeling that if we dont see some SP improvement they are eventually going to cut in order to issue equity. They certainly cant at 16%.

i have a full position right now (1.1k shares) but id certainly be wiling to double it if the guidance continues to be positive next quarter.

Right now, its a better bargain than ETP.
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