[jugs]

He-said, she-said---it's as likely BS as anything else. Everybody's got an opinion on something if not everything. But when a person stands in line expecting to be compensated, I figure there's clouds forming and we'd be the wiser for stepping back and thinking about that.

You've seen through the BS.

[jugs]

Yes, it was a brilliantly fine love affair...while it lasted. But it did motivate us to move into other picks, each with its own particular allure and promise within.

Starting the beginning of this year till Friday just past, I find I'm ahead to the tune of 42.7%. Last month I projected the year would bring a gain in the 945%-95% range. At that time the gain amounted to 40.5% as I recall. So far it's holding up well. Now, when ALDW kicks in, it'll be a cinch.

[pete807]

Good Bye NTI! Final post... It was great while it lasted. This company ceased to exist and became an arm of Western Refining. You kicked started my positions in other MLPs and REITs this past winter! Thanks!
Little Davy Lamp, the chief puppet in the north will now return to El Paso to his difficult directors job with WNR.... Rewarded for his legal loyal trickery on June 23rd
63,801 shares of WNR. hmmmm... mission accomplished? $1,351,943.19 ...chump change
Don't ya love C corps and their ethical boards?
http://finance.yahoo.com/q/it?s=WNR+Insider+Transactions

[pete807]

The motive for writing this article for Seeking Alpha is clearly mercenary. I just read it and concluded the author was rather clueless. The title gave it away.
While folks opted for cash they got a far different result, getting nearly 30% WNR shares like it or not.... additionally the bullet points show a stunning lack of research, and the body of the article says there are over 500 SuperAmerica stores... there are 166 or thereabouts.

Summary

Northern Tier shareholders have approved the Western Refining takeover.

I am surprised by the voting results, but not surprised that most unitholders choose to take cash instead of WNR shares.

I discuss whether or not former NTI unitholders should consider an investment in WNR.

All stock was valued at under $15. Company was valued by analysts at nearly double that!!
unitholders... the private ones were almost unanimously against it
I wonder when those that did not want WNR will unload those shares...
WNR had a fairly strong Q2 but the large short position continues.

http://seekingalpha.com/article/3985633-northern-tier-shareholders-took-cash-western-refining-deal-now

[jugs]

Excellent roundup!

[pete807]

My guess is they won't go back to the spreads we enjoyed before Congress repealed the exporting of crude. That said the freight via tanker ship will be there so shipping off shore will be more than the pipeline from permian to gulf coast refineries like ALDW, or pipeline to CVRR refineries in mid continent.
Drilling will return in ND by lower cost producers, Rig counts will come up a bit as crude oversupply fades and demand brings about a higher level globally.
Two MLP refiners remain:
ALDW with retail 7-11 stores and geographic proximity to well heads in Permian/ Eagle Ford, and CVRR with its two refineries, will have a volume throughput advantage along with storage and piepine assets. Both have MLP structure which has investor appeal, imo. I own both with larger position in ALDW, but added CVRR today.
I like both their chances and healthy payout possibilities through EOY, then I will rethink their winter cycle which is less earnings unless crude goes above 60-70 per barrel, giving a spread on their lower cost storage inventory. Politics and Canadian XL pipeline approval could be another factor, .... GLTA!

[Pennies_Envy]

Pete - I like your thoughts here. Do you think crack spreads will recover or is this the new normal?

[jugs]

That's humble of you, Pete. Much appreciated.

I wound up getting $27.35 for NTI but I had to trade very carefully---read that as "gingerly." But the real gain I measure is that the cash enabled me to move into picks like SDLP and JPEP, LADR and MDR---and all have prospered, SDLP and JPEP have since been closed out.

For me, the moral of the story isn't how much I made or lost on a pick, it's all in how the aftermath adds up. A good exit highlights the real value of the pick and related transactions.

To you, Pete, I'm thinking you're going to come out of the NTI/WNR debacle very well because you understand all this stuff and are always very careful to place your funds where the end result is most likely to become a fine one.

[pete807]

If someone was dumb enough to take all WNR stock it amounts to $14.66 at todays price of 20.83 for WNR! The other options were in the end very close to each other and forced WNR stock on folks, lol. Smart guys like Cat and Jugs got out with well over $25 per unit! I like to gamble a bit and may still get close to $30 but will have to wait for it to materialize. I sold 2/3 at a bit over $25.
Legal Corporate Corruption at its finest!

[pete807]

With a lot of study I decided that the 26.06 would not happen as the language in that PR said it would be pro rated, ... to be decided. A lot of lawyer speak!
I elected the mixed even though I opposed the merger. There was no vote? presumably because they had the deal locked up with their control of both boards and help from too big to fail banks, allowed to play with a monumental conflict of interest for us private unit holders. The truth is much of the 62% of units not owned by WNR was not PRIVATE investor owned but in bank directed funds.
I reasoned that WNR certainly did NOT overpay for NTI and I could sell WNR when the market sees it.
IMO there will be a huge short squeeze sometime late this year or next because 27% of WNR float is shorted. All the cash flow is bound to help WNR.
Here is what really transpired:

EL PASO, Texas, June 29, 2016 (GLOBE NEWSWIRE) -- Western Refining, Inc. (NYSE:WNR) and Northern Tier Energy LP ("NTI"), a wholly-owned subsidiary of WNR, today announced that they have received the Merger Consideration proration results from American Stock Transfer & Trust Company, LLC in connection with the previously announced merger of NTI and a subsidiary of WNR (the "Merger"), pursuant to the Agreement and Plan of Merger dated December 21, 2015 (the "Merger Agreement"), which Merger closed on June 23, 2016. Pursuant to the Merger Agreement, WNR agreed to pay a total of approximately $860 million in cash and issue a total of approximately 17.1 million shares of WNR common stock, adjusted slightly for cash paid in lieu of fractional shares. Based upon the consideration elections made by NTI common unitholders, this cash and WNR common stock was allocated among NTI common unitholders as follows:


NTI common unitholders who made a valid "Mixed Election" (as defined in the Merger Agreement), or who made no election, received $15.00 in cash and 0.2986 of a share of WNR common stock for each such NTI common unit held.


NTI common unitholders who made a valid "Cash Election" (as defined in the Merger Agreement) received $15.357 in cash and 0.28896 of a share of WNR common stock, prorated in accordance with the Merger Agreement for each such NTI common unit held.


NTI common unitholders who made a valid "Stock Election" (as defined in the Merger Agreement) received 0.7036 of a share of WNR common stock for each such NTI common unit held.
Investors with questions regarding these proration results should contact D.F. King & Co., Inc. at [phone].

Read more: http://www.nasdaq.com/press-release/western-refining-and-northern-tier-announce-proration-results-in-connection-with-merger-20160629-01022#ixzz4DAG81ohT

[TEH721]

Did anyone else not get the distribution option they selected? I selected the 26.06 payout and confirmed with my brokers, but this morning I see that I received the $15 payout and shares of WNR stock? I know of at least 1 other person now this has also happened to.

[catdaddyrt]

NGL has been good to me this year and about to pay off again - today I hope with multi dollar appreciation -

[jugs]

NGL has rewarded me to more than $65,000 and is adding, still. I can't share your view although I certainly appreciate your attention to critically important metrics. I haven't been burnt so it has been quite a joy ride.

[Pennies_Envy]

Yes - thank you jugs

[jugs]

WNR is not a buy candidate for me at this time and perhaps not even in the foreseeable future. My picks need to be movers and shakers for me to get excited and hopeful for rewards proving to be disproportionate to the general market. While WNR has done well in its space, it will soon be carrying more debt than prior to the NTI swallow-fest now taking place. It will be larger and that spells a potential for trouble as it will be more unwieldy.

When I look at CEQP, NGL, SDLP, LADR, JPEP, HLX and MDR to name some picks, I also see unusually strong gains. The only exception is MDR but I continue to add in the expectation that this will rise sharply from current levels.

WNR pays a dividend. Its tax structure bears no resemblance to the income producers mentioned above. It pays a small dividend when it's convenient and not threatening to the company's finances. MLPs are a completely different animal and being a hobby rancher, I love my petting zoo. lol

And I am not intentionally leaving ALDW out of the mix, it's just too early to be part of the income production scheme. But I'm in the hunt, believe me! I've got 1,900 units thus far and will probably be adding today or tomorrow, although in smallish amounts of 200 units or so as I think we'll be seeing sub-$9 soon.
There's no way at this juncture to determine what effect, if any, a BOD declaration of no quarterly distribution might pose. I don't discount it entirely but doubt it will shock anybody.

I hope this helps you.

[Pennies_Envy]

Any of you guys buying any WNR?

[bzusa]

OUCH - Just saw the 0 distribution news.
The metrics were bad but not that bad -
If I trusted WNR, I'd probably jump in for a short ride up on NTI.
Last quarter's crappy cs is improving and the Bakken/WIT differential has strengthened (just a bit).
But until I see otherwise, I have no faith in WNR's interest in us investors.

I sold my last holding last week (a REIT) and closed my short (NGL) today. Relative tons of ammo available.
I just don see NGL making money this year.
NG is still $2 so only the cheapest producers (Marcelles) will be shipping - I can't see much growth in the Rockies ng shipping patterns.
Oil transport may be able to pay the pipeline debts, but still I don't see much profit for them this year.
There should be another pps rocket when the pipeline actually opens.
So you- all will another chance to make the bucks.
I'll short again if NGL hits $13 again this month.

[dabard51]

jugs, thanks for the warm welcome... my stay will be brief, as obviously NTI will be subsumed into WNR in the next couple of months.

NTI has been good to me over the past couple of years.
Time to move on.

I recently posted on the MDM message board, should 'hard' assets rather than 'liquid' assets be to your taste.

Cheers, all.

[jugs]

You're right, of course. However, regulars on this board and the boards for CVRR, NGL, SDLP, ALDW and CEQP have pointed towards the zero-distribution likelihood for a long time now. The aforementioned boards might help prepare you for journeys down paths as yet untraveled. It does that for the rest of us.

I hope you'll join us! Most everyone I know saw fit to unload NTI shortly after the WNR swallowing process was first announced. One of us pulled out entirely upon the WNR announcement---but it wasn't me. It took me longer to get smart. lol

[dabard51]

NTI: Q1 was a disaster. No distribution. Zip.

Check the news releases. 2016 Q1 is a disaster. No distribution is declared.

[jugs]

Haven't looked into the link yet but thank you in advance.

As for your question---how does debt stack up in such great abundance?

Simple: Because it can.

It's a manipulative ride we, the nation, are on. It started with "futures" and whammo!---Bartering on credit was born. There's not many ways available to control its aggressiveness and nobody wants to see the fall guy take the hit because a bloodbath always results in the end of an agreed-upon solution with the spoils truly spoiling things actually serving everyone.

We owe, the other guys owe, nobody's calling in the markers so that means we're all in this together and while there isn't a remedy, so long as we all shut up, there'll be no rupture in the dam, either.

Nation upon nation recognizes this codependence and doesn't push buttons so hard as to force a collapse.

Business isn't for the faint of heart whether we're talking about a Mom & Pop or a nation. The idea is to push for all you can get without destroying the golden goose, else we all suffer.

[pete807]

There has been a rush to point to a "bottom" being behind us in oil, and I hope it is so. But what if?
On the other side of the equation there are the doomsday predictors and we have all had warnings of a market crash coming by other experts... One says it will happen because of runaway debt. I linked it below. It examines the REAL debt which includes unfunded liability of current programs along with rapid increase because of many factors we understand.
I am one who subscribes to the fact that it is insanity that we as a nation can spend our way out of debt and the numbers in trillions are meaningless words which need to be put in perpective, I use the statement a lot that a trillion is million millions but here is another analogy putting trillions into perspective

One million seconds was 12 days ago.

One billion seconds was 31 years ago.

One trillion seconds ... that was 31,000 years ago.

so almost 20 trillion seconds is 600,000 years!
How did we get to this point? There are many answers... fast forward past all the pitches and buy gold advise and avoid the endless video. You can skim through the written form by clicking leave the video but stay on the page.

http://thesovereigninvestor.com/exclusives/10-oil-in-2016-u-s-economy-doomed/?z=463472

[jugs]

You're right. I'll be at the back door to receive my 1,000 lashes promptly at 5pm.

Thanks for the link.

[pete807]

Barclays ... not Barrons, Feb 29th downgraded.

http://thefly.com/landingPageNews.php?id=2335904&headline=NTI-Northern-Tier-rating-change-
http://www.benzinga.com/news/16/02/6741748/barclays-downgrades-northern-tier-energy-to-underweight-lowers-pt-to-25-00

[jugs]

Getting out of WNR's clutches was possibly the smartest move I could have made. I made my move very early in the process and put a lot of cash into NGL, SDLP, LADR, MDR and NRZ. Each of these has done rather well while NTI has given up much ground, what with my having received more than $27 for most of my units. More interesting for me is that by selling NTI I was able to force a profitable compounding of cash suddenly made available by selling in one and gaining greater distribution levels with all of the preceding except for MDR, of course. Topping things off is that I'm not suffering as NTI loses ground.

Can you add some color regarding the Barron's piece you mention? I hadn't heard of this.

Thanks!

[pete807]

Here we are on the last day of the quarter with no new information on when the deal will close. Earnings estimates say mid thirties for payout and $1 or more for next quarter. During this period since the announcement of takeover WNR stock has fallen along with crude oil. Tender has held NTI in a range. I expect the real percentage of units now in WNR's control has risen due to Barclays downgrade (collusion) and folks throwing in the towel. As I have posted why wouldn't WNR buy any cheap units with any cash banking the difference between price and offer? Tax consequences have many like me holding into 2016 and we will sell and rebalance to offset cap gains when the deal is over. There will be the formality only of a vote appearing soon. I suspect if there is a whole dollar to be made they will push to complete the deal in Q2.

[pete807]

Wonder what great advise is being troweled out be said "legal advisors".

NTI’s general partner is comprised solely of independent directors who retained independent financial and legal advisors in connection with their evaluation of the merger.

...and what are those waiting periods?

expiration or termination of all waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act

There has been no announcement, mention, or notification of any "vote" either.

and the approval of the merger at a special meeting of NTI unitholders by the affirmative vote of holders of a majority of the outstanding NTI common units

http://www.sec.gov/Archives/edgar/data/1533454/000119312515409349/d105585dex991.htm

[jugs]

?Absolutely mind-boggling!

On a day that has me up whoppingly, I just noticed that NTI and WNR are both down just a tad. But that they are down anything is beyond my understanding. These are, after all, top tier companies in their respective arenas.

That has me thinking a lot of folks are upset with the proposed vacuuming process in play although yet to be finalized as WNR bids to take NTI into its gullet instead of seeing those juiciest of all MLP profits distributed to mere humanoids.

I can't believe WNR's business is at risk, far too well managed for that, at least in my mind. Sure, debt-load issues will play into things but even GE carries debt. This is the way of the market's universe. And NTI has been spectacular and I know this to be the case as I was in it from its earliest beginnings. While I'm now out of it, I gained immeasurably while a unit holder and refuse to let my feelings get in the way of personal business management. If the government refuses to honor the WNR proposal, I'll jump right back into NTI, no doubt about it. Incredible stock.

[pete807]

SEC has not yet declared the merger transaction effective

Before we get started I’d like to address the previously announced Western Refining transaction. On January 19th, Western filed a registration statement with the SEC and Northern Tier filed a scheduled 13E related to the proposed transaction. As Western’s registration statement has not yet been declared effective by the SEC, we will not have any comments nor entertain any questions related to the transaction or the timing of the transaction.

http://seekingalpha.com/article/3931946-northern-tier-energys-nti-ceo-david-lamp-q4-2015-results-earnings-call-transcript

[pete807]

Would not change much about NTI... selling 1/3 was good and I could still end up winning the lottery gamble about to unfold. i think holding will also work because NTI has proven the DD regarding their advantages. As a long term holder I have a very low cost basis for a safe zone source of dry powder which will come into play when tax reporting comes into focus later this year.
On the other hand you bring up the clarity of hindsight....
I would have held dry powder longer on NGL and JPEP for 20-30% more shares I now hold at the same money spent. It is what it is...
For an analogy from the fishing realm... "That's why they don't call it catching!"
I am only comforted by the high book values, yield, crazy P/E, and price to book numbers some of these new positions hold. Also the cash positions sustaining those high payouts so far with some reaffirmed by management.

[jugs]

Hindsight being what it is--- if you could re-format your management of NTI units over the past several months, would you do anything differently?

I'm not comfortable with WNR. I don't trust the GP to hold to previously committed plans as they've laid out. Squirming has already occurred and I expect more of the same from a lack of visibility.

There's much to question regarding liquidity issues to say nothing regarding the handling of all-cash vs the combo offer on the table yet to be consummated.

I think the most troubling of all matters specific to the tender---for me, at least, has to do largely with finding my cash tied up by the above issues. As I've stated, I no longer hold NTI units. I've redeployed the cash by placing same in SDLP, MDR, LADR, ALDW and NGL. I believe I was able to take advantage of terrific prices This re-positioning is far more pleasing to me than would have been the case had I held my NTI positions. I'm quite hopeful Ms. Mercy will shine on me whereas I get a sense of foreboding from NTI's concept of anything I'd be calling fair play.

At the same time I must admit I came close to buying NTI this week when it dipped down into the $22's. I hadn't expected to see that and sensed it might be worth a short term fling. But ALDW began to move interestingly as did NGL and I succumbed to both in lieu of NTI.

For the record, I think you display amazing courage, sticking to your guns on NTI. I don't think I know of anybody else who would trust his intellect and guts as you do.

[pete807]

If they don't complete the deal by the end of March another and likely higher payout could be paid to unit holders hanging on for the option of $15 + .2986 WNR. My reasoning is based on the inventory adjustment they used to lower the payout for Q4. I was happy to get nearly $900 this month in spite of the dramatic drop from Q3... That said, I suspect they will work to keep as much cash funneled toward WNR as legally possible within MLP rules and company stated policy.
The share price has been buoyed heavily by the deal as both the other two MLP refiners are at 10 bucks with investors running for the exits and all refining margins down. However the high cost of shipping have made the export of crude at current levels not so attractive and the spread of WTI/Brent reflects the shipping.... maybe $3/bbl. We are not seeing a lot of crude exporting yet
I correctly guessed the impending deal holds NTI in the range it has been in since January and while I don't want to hold WNR for long, If I can't get all cash, it too could surprise investors when they see what the cash flow does to the new combined company.
Retail profits will continue to rise, crude could come up at least $10 and the new company key statistics could take WNR back to $40 later this year. Regardless I do not have to make any hasty decision on the last of my units, but will surely see them gone in 2016. I suspect if I hold through the deal I will realize $27 or better. I may have to accept a dividend from WNR!

[bzusa]

Current value: $22.76 and rising (.29 WNR+$15, guaranteed)
Here's my reading on the prorated deal using a hypothetical situation: (much too long)
Imagine
WNR has ONLY $1000 and 1000 shares that they will pay for NTI.
When the deal was signed, each WNR share is worth $1

They’re paying $1000+$1000 (share value) for NTI
Paying $2000

There are 1000 shares of NTI outstanding
When the deal was signed each NTI unit was worth $2
NTI was worth $2000 on the date of the deal signing.

For each NTI unit WNR will pay (guaranteed)
$1 and + 1 share =
$2 (on the date of the signing)

You can also elect to get $2
Or elect to get 2 shares.
BUT THEY ONLY HAVE $1000 AND 1000 SHARES.

If every NTI unit elected $2 and no WNR, every unit would get $1 + 1 share.
If only 1 NTI unit elected $2 and every other unit elected shares, that 1 unit would get $2, and all the others would get $0.999 and 1.001 shares (more or less).
If half wanted $2 and half wanted all shares, then the ones that wanted $ would get $2 and 0 shares, and those that wanted shares would get 2 shares and $0 bucks.

How many NTI shareholders are going to want to be paid in all WNR shares (hypothetically now worth $.60)?

[jugs]

I'm also noticing they say the unitholder "may elect."

We Americans have "elected" all over the place and how often are we pleased with the outcomes?

It strikes me that WNR is saying that those who "elect" are subject to conditions wrought by circumstances only the market knows and is preparing for the final feast.

One can only wonder if WNR isn't preparing to feast on NTI innocents caught in a maze of confusion?

[bzusa]

WNR did not promise to pay $26.06, they promised to pay $26.06 until they run out of cash.

"As an alternative to the cash and stock consideration, each NTI unitholder may elect to receive, per NTI unit, either $26.06 in cash or 0.7036 of a share of WNR. The election will be subject to proration to ensure that the aggregate cash paid and WNR common stock issued in the merger will equal the total amount of cash and number of shares of WNR common stock that would have been paid and delivered if all NTI unitholders received $15.00 in cash and 0.2986 of a share of Western common stock per NTI common unit."

[pete807]

Without the offer NTI would trade at $15 today imo. How can WNR say they only have x amount of cash to divide among obviously all the unit holders not wanting to get screwed by the cash/share deal? Won't they have to borrow the money to pay unit holders $26.06 as promised? What language in the pro rate comment would allow them to force shares on those NTI unit holders? The uncertainty of the outcome has NTI trading at $22.80 now.
Thought those were buzzards circling but I see they are actually lawyers..., They look about the same from here.