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4Q 2016 Forecast For MCEP

|Includes: Mid-Con Energy Partners (MCEP)

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

Exiting 2019:

  • 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.