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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.
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)?
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."
I live 6 months in Brazil and 6 months in California - right now I'm in Bz. This place is recessing to beat the band!
The locals have no confidence, and for probably many good reasons.
Bz has the 7th (5th last year) biggest economy in the world.
Japan ain't looking so hot either.
NGL's earnings report wasn't that bad. The company made $$; just not enough to pay the distribution. This is not a positive trend.
NGL's water businesses sucked and it was the big moneymaker. Not much fracking going on, so not much need for water cleanup/disposal.
Can't see that changing real soon.
The pipeline is the hope -
Some of NGL's and petros problems
If the experience with natgas pricing and glut is any guide, it shows that low prices do not cause production to fall enough to raise prices - very counter intuitive.
Sure hasn't with natty.
The world economy is sputtering along, not showing even pockets of growth (only India) - petro demand growth is slowing.
I think that NGL is counting on the new pipeline to raise earnings and profits; but seems to me that that is anything but a sure thing - and I want at least a close to sure things when it comes to returns on investment.
If you think that the pipeline will make enough bucks when completed, then NGL is certainly a buy right here.
My little lld REIT hiding place is has been doing just fine.
My NTI short is a winner and I have ammo.
If there is a global semi-recession, shorting seem the way to go, but I've run out of obvious shorts.
Looks like Yellen is worried.
Please stop adding!
NGL is going down for a reason.
Add when it's on an uptrend (a trend is more than 1 day).
Closed out my PBR short yesterday, and I'll short them again if the hit $5 again.
Put the profits in a NTI short. I'll close that when NTI hits the WNR $15+.2986 value (now sitting at $24.15).
The fundamentals for refiners are horrible - huge gasoline builds week after week (8mm bbls two weeks in a row).
The PADD cs is at $11 - up a bit from last week but still just awful (q/q or y/y)
The Bakken discount has gone away so one of NTI's advantages has hit the deck.
Go Warriors (73-9).
shorted this pos
I'm in and out of the MREITS - ORC and NLY. The rate spread has stabilized after a terrible Dec (for REIT holders) so I'm in both right now.
I owned SDRL for years, when it had the divi - in and out also.
SDLP always looked interesting but it loses rig contracts in '17 and I don't think the divi will hold up.
I also seemed to be SDRL's bank - a secondary position that I didn't like.
Sure is cheap.
Bought FB at $19 so cap gains keep me in the green.
A cut and paste from today’s IV BRY board –
It’s really about pipelines and bears on the NGL’s Grand Mesa adventure.
Why The Marcellus Shale Play Could Spell The End For Canadian Natural Gas
(longish article and this section is from just below the middle)
“But the east isn’t the only market that Canadian gas producers are in jeopardy of losing to the Marcellus. The American Midwest is up for grabs too. When the 2,700-kilometer Rockies Express Pipeline came into service at the end of 2009, its Colorado-to-Ohio span was – and is – one of the largest pipelines ever built in the U.S. It was, at the time, intended to deliver a much-needed boost for gas producers in Colorado and Wyoming, connecting them to the fuel-hungry U.S. northeast market where they could escape the Midwestern oversupply and fetch a far better price. But less than six years after the ribbon was cut on the multibillion-dollar pipeline, the one-time lifeline for Rocky Mountain producers was spun into a noose from its eastern end. On Aug. 1, 2015, the Rockies Express Pipeline was partially reversed, sending low-cost Marcellus shale gas into Chicago and the American Midwest, hammering local drillers. A July 2015 report in the Casper Star-Tribune, Wyoming’s largest newspaper, cites a Platts study projecting that sales of gas from the Rocky Mountain region into the Midwest would drop by 1.3 bcf per day between 2014 and 2020 as a result of the reversal, while sales into the area from the Marcellus would rise by 6 bcf per day over the same time.”
thumbs up jugs - I'm hiding in MREITs
By the way, the NTI conversion sits at $24.85 should WNR run out of cash (which they will).
The "refiningreport" had the average 2016 cs for PADD II (2:1:1) as $10.60; just horrible. (Data thru 1/14/16)
Was $15+ last q, $22 in q3, and $19 in q1 '15.
On another negative note, the WTI Bakken differential is $.05.
Lowest I've ever seen it.
The WTI Brent spread was ($1.30)!!!!!!!
Lots of changes in January.
Historically, refiner stocks rise in late Feb.
Where's WNR getting the bucks for the buyout?
"I'm somewhat confused as to how NTI is served by the acquisition."
That was not part of the equation.
Global Crossing
Harvest Energy Trust -etc
Poseidon
"sometimes the bear eats you"
Jugs, you are certainly enthusiastic about NGL. I am much more sanguine.
My worries are the knock-on effect of low crude and ng prices on the new pipeline. Grand Mesa seems very important to NGL (sold assets to pay for it; guess no one wanted the senior notes).
If the price for crude and ng do not recover, how many producers in the Rockies will still be in business when the co-owned pipeline opens (counterparty risk), and how much oil will be transported?
Then there’s the water treatment segment: as the number of new fracked wells shrinks, so do NGL:’s water treatment opportunities.
One can only hope that crude prices go up and/or the US exports more crude.
Today, 1/11, just checked the news and had my question answered.
Nice to know that when the sale closes NGL should have the $$ to finish the pipeline with their recently acquired partners in the endeavor - "Pair of DJ Basin pipelines joining into single project"
Good read:
http://fuelfix.com/blog/2015/11/18/pair-of-dj-basin-pipelines-joining-into-single-mega-project/
What's the date of that announcement re: grand mesa pipeline open season.
I saw a very similar one from November '15 - than nothing more.
Serious short squeeze - I covered, down $.35 but didn't reverse course.
Guess I'll look for awhile.
WHAT!!!!!!!!!
You got to be kidding me.
congrats longs in NGL - looks like those deal makers have come up with the cash for the pipeline!!!
WHAT
Jugs, I'm on the other side.
Negative earnings, and a hoped for pipeline to turn things around.
I searched and searched for news about the Great Mesa pipeline (Job offers, construction reports, local news headlines, requests for bids). Don't know if construction has started - but I doubt it.
Did find a request for people to offload 50 miles of pipe at a holding site - but it was just a tentative offer by a sub. I found basically zilch.
NGL was partnered with Rimrock Midstream on the project, but that company is off the grid. Rimrock was also counted on the provide gathering logistics.
The pipeline project has gone through many changes, none look positive. Now the pipeline has been consolidated with another future pipeline project by another company - basically to redistribute potential costs.
This pipeline is NGL's road to positive earnings assuming there is someplace to put the oil being shipped out of Co.
I'm up on my bet, but would much rather hold a solid organized company paying 20% dividends.
Any word on the $300 million "senior note" placement?
Any hint?
any supposition?
Jugs, Fitch downgraded NGL - for many good reasons.
I researched the company, posted a comment on the yahoo NGL website ("Fitch downgrade") if you want to read my takeaway after a bit of research.
Well WNR has crashed some more making $26.06 look like NTI owners should be happy.
Not a good time for refiners.
Winter is normally bad and the lifting the export ban only makes things appear worse.
Merry Christmas / Happy Holidays to all
I have found this board to be the most civilized of all the boards I pay attention too. Small but warm
I sold all my NTI today when it hit my price ($26.20).
I too have owned it off an on since 1/13 - It was a solid investment (>5% cg +divis) and almost worry free. A real cash cow with great potential.
Maybe WNR will make it all work out.
I found their (WNR) quote that "the mlp model has been shown to be a failure" and that the union will "unlock" investor value to both be absurd. Spin, spin, spin.
Sorry about the MDR mistake. There is nothing good to say about the offshore oil business now, or for years to come.
I agree with at least a $.75 distribution, but WNR may fiddle the books.
The average PII 2:1:1 crack is now >25% below last q's average and 20% below last year's q4 average. Although, NTI should pickup 10% more production.
I recall that NTI has a 6-2-2-1-1 crack (more or less) and I don't know what that entails so I use the 2-1-1 crack for PADD II from Howardweil.com
I'd sell at $26.20 just because that's my average cost for this batch of NTI.
I would like to free up the $$ for other investments.
I think the "pro-rated" part of the cc distribution discussion indicates that NTI stockholders will get a distribution for the number of days in the quarter that have passed before NTI ownership transfers to WNR.
If next q ex-date is on 2/20, and the deal closes on 3/20, those that held NTI until the end, will get 28 days worth of what would have been the following quarterly distribution.
WNR wants us to hold NTI until the end to improve their chances that NTI owners will take the WNR stock option.
Pete, you were a SDRL holder so you follow off-shore activities.
You're now you're a MDR owner; Why???
Does MDR do business with PBR (world's greatest short)?
I'm checking out ALDW, not as much potential as NTI, but definitely worth a look. There are a few of the NTI crew on that ALDW IH board- just like old home week.
WNR should back out; they're obviously paying too much for a
under leveraged refiner (lowest debt/eq in the industry) with an operating margin only 30% higher than WNR's, that pays a 16% distribution, sells into a basically captured market, and has direct access to the cheapest oil in NA.
Hell, WNR will run leverage that baby right up and distribute the benefits to anyone but the shareholders.
Talking about the price WNR would pay for NTI
Last week, I wrote
“WNR would have to fall to about $36.50 (-$6, or more or 13%) to make the NTI offer stand where NTI closed today.”
I thought that that would be an outrageous fall.
7 days later WNR has closed at $36.73.
Last Friday, I heard that short interest in the Dow had reached a historically high level – looks like those shorts had it right.
REITS fell 4% on average today.
‘bout time, as the yield curve keeps compressing.
It does look like a sure thing.
WNR would have to fall to about $36.50 (-$6, or more or 13%) to make the NTI offer stand where NTI closed today.
ADLW has held up relatively well, and the cs even better.
catdaddy may be out of NTI, Pete's position is known, and I doubt there are many newbees entering the fray.
I re-bought 1/2 my position early Friday at $26.09 so I'm a bit underwater.
Well, Credit Swiss flip-flopped.
Yesterday it was CS lowering earnings forecasts for refiners, today it's:
Credit Suisse analyst Edward Westlake says that he has been surprised at Q4 performance so far, and predicts a 2016 environment conducive to earnings strength....
Credit Suisse has Outperform ratings on these refiners: VLO +1.6%, NTI +0.5%, CLMT +1.5%, MPC +3%, TSO +1.2%, ALDW -2.3%, WNR +1.6%, PBF +0.2%, DK +1.7%.
(fm SA)
EIA has had that been saying that for months.
Average regular price in M/SP was $1.96 yesterday, low of $1.83 (Costco)
SA right in the middle.
The crack is still way down y/y.
Not getting any better.
Refiners are at 94% utilization
Gasoline imports are up a bit.
the Bakken/WTI diff shrank even more.
If cl stays below $40, NTI's will have to take that old non-cash charge on inventory
.
Most refiners got hammered today (not ALDW). TSO -5% WNR -4%
Credit Swiss revised 4th q earnings down for the sector.
There new NTI estimate is down 'bout 45% from the previous.
They also lowered NTI's '16 pps to $30 (fm $34) - so I guess I could have waited it out. Maybe I can get back in real low.
I sold all my NTI last week at $27.34, a +10% winner.
EIA has had that been saying that for months.
Average regular price in M/SP was $1.96 yesterday, low of $1.83 (Costco)
SA right in the middle.
The crack is still way down y/y.
Not getting any better.
Refiners are at 94% utilization
Gasoline imports are up a bit.
the Bakken/WTI diff shrank even more.
If cl stays below $40, NTI's will have to take that old non-cash charge on inventory
.
Most refiners got hammered today (not ALDW). TSO -5% WNR -4%
Credit Swiss revised 4th q earnings down for the sector.
There new NTI estimate is down 'bout 45% from the previous.
They also lowered NTI's pps to $30 (fm $34) in '16 - so I guess I could have waited it out. Maybe I can get back in real low.
I sold all my NTI last week at $27.34,is a +10% winner.
Oops - ALDW
Good luck with ALFW - I'm holding at least 'till its a signed deal.
I like my $1+ distribution.
Here are my latest figures on NIT profitability.
The Minneapolis average gas price has fallen from $2.37 to $2.07 over the last 30 days
WTI has fallen $45-40.50 in the last 30 days (+/-, fuzzy graph)
The WTI Bakken (clearbrook) average differential has fallen from $12-$4.50 y/y and from $9.60-$4.50 q/q .
I’ll take your word for last time I looked (11/5) the WCS/WTI differential was up, around 15% q3/q4 (the cc said they were using max WCS: 30%)
My link for the WCS/WTI differential has died (psca.ca/firstenergy) - help –
At the 4th q midpoint, it seems like NTI’s margin may be down 5-10% q/q, about equal to the throughtput lost last quarter. Maybe the distribution will remain the same….
ALDW sure got hammered yesterday.
Hard to accept the NTI is trading below the offer right now.
Lots of folks do wait out the post ex-day drop, with the rational notion that pps will rebound prior to the next ex day.
Even wait out the winter downturn, aware that there's a rebound in the work.
Gotta worry about unpredictable negative events, but 15% is 15%.
The most recent posts have been appreciated -thanks
As of today, 11/5
The PADD II CS is down 15% y/y and down 25% q3/q4
The Bakken/ WTI differential is down 75% y/y and down 45% q3/q4 (but has begun to widen)
The WCS/WTI differential is up 35% up y/y and 15% q3/q4
For the most part NTI profits on this side of the equation are lower.
Throughput is another matter.
At this time, q/q inventory non-cash earnings adjustments are not a factor - yea!
I’m not happy about a buyout, I’m not a fan of WNR, and I think it’s a done deal at the current offer.
I don’t think that ALDW and CVRR have NTI’s potential.
Asphalt is all good, but cheaper inputs are much better.
Last month I predicted the divi would be >$1 and am sure happy it is.
back to NTI
Here’s my take on the distribution for q3 >$1, but depends on the cost of the Q3 unplanned maintenance, $$ set aside for the cash reserve, and how much total PADD production remains off-line. I wonder how much the non-cash loss on held inventory will be as crude prices have fallen a bit betweem Q2 and Q3 (10% at least).
That will impact the earnings report.
Q4 looks worse then Q3, even with no downtime, as the cs and Bakken/WTI differential decline. On the plus side, the WCS/WTI differential is high and growing (poor Alberta).
I assume that NTI is still using as much WCS as they can.
Interesting news in the refining report week ending 10/16
“ongoing downtime in PADD 2, with over 500MBbl/d to remain offline into November” --- Good
Crack Spreads PADD 2 Chicago 2:2:1
1.5% 3qtr increase over q2 in that PADD 2 CS ---Q3-Good; Q4-Bad
4Q14 $19.93
1Q15 $18.81
2Q15 $21.87
3Q15 $22.29
QTD 15 $18.41
10% loss in NTI output in Q3 –---- Very bad
2.5% decline Bakken/WTI differential in Q3 (Q4-50% decline so far). Bad; Q4-Very bad
27% decline in WCS/WTI y/y ----- Very good
Seems like Unit 2 is back online (as of Oct2).
"The unit was safely restarted and returned to service on October 2, 2015." released on 10/7/2015 -
Took NTI's IR 5 days to let us not-living-in-Saint Paul Park investors know. Guess they don't know what IR stands for.
That news in that announcement sort of fits with my post from late on the 10/1.
"Last trade 100k shares(4:02)+$.04 to $23.60.
My guess, unit 2 is, or almost is, up and running."
By the way, normally, NTI's close of day block trade is around 6k shares - that was not clearing of the books.
From the Yahoo nti board (rt-invest) -
"The unplanned maintenance was finished on October 2nd, and you took five days to report it?
Why, to give insiders plenty of time to buy shares before informing the public?
Thanks also for giving zero information on what caused the maintenance and how it expensive it was to carry out. YOU ARE CORRUPT, WORTHLESS, or BOTH!"
By the way - I wouldn't buy and hold RIG right now. Real good offshore info on the IV SDRL board.
Last trade 100k shares(4:02)+$.04 to $23.60.
My guess, unit 2 is, or almost is, up and running.
"Unplanned maintenance at the refinery’s 58,000-b/sd No. 2 crude unit was due to begin as of Sept. 17, Northern Tier said."
http://www.ogj.com/articles/2015/09/northern-tier-shutters-unit-for-unplanned-maintenance-at-minnesota-refinery.html
Could it be that there is a problem at the apparently shut-down refinery unit.
58k bbls/day is a serious loss with no explanation and no date for start up.
Until unit 2 starts back up, NTI's pps will just go down.
And management just stays mute - ech!!!!!
I dumped 1/2 my position (which I had just bought) when they announced the "unplanned maintenance."