I'm too lazy to write an article, but here are the numbers I an expecting for 4Q 2016:
- WTI averaged $49.40
- MCEP realized price differential of $5
- 10.4 MM in EBITDA
- 6.7 MM in operating cash flow
- 119.1 MM in net debt (debt less cash and cash equivs)
- net debt to 4Q trailing EBITDA of 2.52x
Current WTI future chain is at $55 for 2018 & 2019. Food for though. Exiting 2018, MCEP will feature the following (forecasted) metrics:
- net debt of 75MM
- quarterly dcf of 6.7MM
- net debt to 4Q trailing EBITDA of 1.8x
- net debt of 45MM
- quarterly dcf of 7.7MM
- net debt to 4Q trailing EBITDA of 1.0x
MCEP could definitely support a distribution in 2018. A 40% payout would by 9 cents per unit a quarter. Could easily be paying 40 cents on annualized basis by year end 2018. My cash flow analysis assumes 3% annual production decline and also accounts for payments made to preferred shareholders. It does not account for the additional share increase should/when the preferred shares be converted to common units.
Disclosure: I am/we are long MCEP.