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5 hours ago, Cleo McDowell said:

Legacy Reserves announces transition to C Corp. I think that just about wipes out all of the upstream MLPs. 

There's still EV Energy Partners (bankrupt, but I assume will restructure as an MLP) and Mid-Con Energy Partners.  There's also non-ops like Viper. 

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3 minutes ago, skipmcgee said:

There's still EV Energy Partners (bankrupt, but I assume will restructure as an MLP) and Mid-Con Energy Partners.  There's also non-ops like Viper. 

You really think EV will restructure as an MLP? I haven't followed them so have no idea, but seems like it would be pretty foolish. 

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You fellas know anything about the growing trend of debt-to-cap governed loans to midstream companies backed by private equity firms?

We are seeing a lot of it. And I can’t get my partners comfortable with it. 

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58 minutes ago, Rex Kramer said:

You fellas know anything about the growing trend of debt-to-cap governed loans to midstream companies backed by private equity firms?

We are seeing a lot of it. And I can’t get my partners comfortable with it. 

D/C ratio seems like a fairly normal debt covenant.  Is there something else weird to this trend?

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Yes. That these companies don’t have cash flow, and banks are loaning against nonoperational assets. The debt to cap as the primary governance goes away after a “changeover date” when throughput/processing start, and then the loan is largely managed by the more traditional Leverage ratio that steps down over time. 

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47 minutes ago, Rex Kramer said:

Yes. That these companies don’t have cash flow, and banks are loaning against nonoperational assets. The debt to cap as the primary governance goes away after a “changeover date” when throughput/processing start, and then the loan is largely managed by the more traditional Leverage ratio that steps down over time. 

Any leverage is going to amplify risk, but it's not like PE funds are going to be financing greenfield midstream projects with all equity.  Is there anyone that would be willing to fund a pipeline purely with equity?

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I'm a banker.  Think of this from our perspective - no cash flow and taking construction risk for 9-12 months.  Banks aren't looking at true greenfield in the sense that they'd finance just any midstream project in this manner.  It'd be Permian, Wattenberg, etc. - areas with throughput already present to be shipped.  

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10 hours ago, DCA_HORN said:

Thanksgiving 2014 hit then 6 months of sanity and now it's a free for all. Too much supply. 

You serious, Clark (Frieda’s boss)?  Supply globally is down relative to 2014 (as it relates to demand/consumption). 

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16 minutes ago, BTW said:

I live in Midland and develop salt water disposal wells as well as sell completion chemicals.  Just checking in on the new thread

Do you own SWD wells?  

“I rent. I have a lease with an option to buy.”  

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11 hours ago, Rex Kramer said:

I'm a banker.  Think of this from our perspective - no cash flow and taking construction risk for 9-12 months.  Banks aren't looking at true greenfield in the sense that they'd finance just any midstream project in this manner.  It'd be Permian, Wattenberg, etc. - areas with throughput already present to be shipped.  

Well yeah.  I wasn't suggesting lending for a natural gas processing system in Iowa.  There has to be actual demand.

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18 minutes ago, AnonymousInternetPoster said:

For those that care, lots of new sand company activity in West Texas; Preferred Sands, Hi-Crush, Alpine Silica, Black Mountain Sand, Hi Roller and US Silica.

Good luck finding enough trucks/drivers to haul all of that sand.

They'll come back...they always come back

(or someone will invent a different solution)

Edited by Neonmoon
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2 hours ago, AnonymousInternetPoster said:

For those that care, lots of new sand company activity in West Texas; Preferred Sands, Hi-Crush, Alpine Silica, Black Mountain Sand, Hi Roller and US Silica.

Good luck finding enough trucks/drivers to haul all of that sand.

I have a trucking company out of ETX looking for $30M in growth capital to address this specific opportunity they have in the Permian.  

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10 minutes ago, T’Boo Ted Marshall said:

I have a trucking company out of ETX looking for $30M in growth capital to address this specific opportunity they have in the Permian.  

What's the name?  We ship a metric ass ton out of the Great American warehouse in Houston and we're always looking for good carriers.  Assuming they can handle Hazardous materials.

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I wanna put some money into Permian focused stocks.  Thoughts on, in order, FANG, PXD, OXY, PE, and JAG?

Also noticed XOM trading fairly low.  Any thoughts there?

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11 hours ago, 3adays said:

Any predications on CHK? Hoping they get back to $4.00 so I can unload the shitbag. 

They are selling assets. Too much debt to be bought imo. Could be wrong. Don’t see 4 happening anytime soon 

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Thoughts on what OPEC will do.

https://www.msn.com/en-us/money/markets/opec-could-accidentally-sink-oil-prices/ar-BBKPCQF?li=BBnbfcN&ocid=DELLDHP17

 

The global cartel that's aimed at propping up oil prices could accidentally send them plummeting next year. 

If OPEC lifts its production caps at the end of the year, it's likely that oil prices will gradually fall in 2019 — Thomas Pughs, an economist at Capital Economics, predicts Brent crude oil will drop to $55 a barrel from $75. 

But if they don't ease the oil market into any decision to cut production, it could be painful.

"There is a significant risk that OPEC does not give any clear indications of its intentions for output next year prior to its meetings, which could result in a much quicker and sharper fall in prices than we are anticipating," Pughs wrote Wednesday in a note to clients.

The cartel, along with non-OPEC members led by Russia, struck a deal in November 2016 to cut oil production by nearly 2 million barrels per day, in efforts to tackle a global oil glut that had been plaguing prices since 2014. 

The future of those oil caps, which expire in 2018, is anything but certain. Saudi Arabia, who is widely seen as the unofficial leader of OPEC, has said it's necessary to continue limiting oil production

At the same time, lifting oil caps is an attractive move for OPEC. Oil prices have risen more than expected this year — Brent crude, the international benchmark, topped $71 a barrel in January. Higher prices encourage output by non-OPEC members, like US shale producers, so keeping oil cuts would mean losing more market share. 

a close up of a logo© Thomson Reuters

"This has created uncertainty in the market which could lead to sharp price movements around OPEC’s next meeting," Pughs wrote.

Additionally, member countries — Algeria, Angola, Ecuador, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia and the United Arab Emirates — only meet twice a year, and their decisions are often last-minute. This leaves limited opportunities for the group to officially update policies. 

In the meantime, investors are left to speculate from statements by individual members — which can be contradictory and even misleading, according to Pughs. 

"Members will typically hint at additional output cuts or make positive statements if prices have fallen rapidly, in an effort to boost investor sentiment," Pughs wrote.

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1 hour ago, Rex Kramer said:

Might take a large flyer on FANG, PXD, and XOM, mid-size flyers on PE, OXY & VNOM (because agreed), and a small flyer on JAG. 

I bought VNOM back in September and I'm up 43.28%.  Plus, you gotta love the 7.99% yield.

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