OK, everybody---finally we have something to feel good about.....
Back in December of 2018 I emailed Trey regarding a few items. At that time I encouraged others on the board to do similarly which I know you did.
Last month's email to Trey led to a back and forth, something he and I have done at other times in the past. My main concern had to do with limited communication between the company and its investors, often amounting to none save for the usual Conference Call. My background in Investor Relations speaks for itself as I know how important it is to maintain an open channel with your supporters.
Following, then, is an unsolicited email from Trey which came in yesterday afternoon. I've had a stomach virus and am not operating on all cylinders in a timely fashion:
_____________________________________________________
Trey Karlovich III
Jan 11, 2019, 1:58 PM (18 hours ago)
to me, Linda
(Linda is NGL's in-house assistant to Trey, handling Investor Relations materials and such. Explanation from Jugs)
Len –
We rec’d your note on unit repurchases as well as similar notes from others. I assume it came up on a message board. Please feel free to share the following:
NGL is continuing to evaluate and work with its bank group on a potential unit repurchase program. Any agreement with the bank group would be disclosed publicly in either a press release and/or an 8-K filing for an amendment to the credit facility. Additionally, the securities rules dictate that a public announcement regarding a share repurchase must be made prior to commencement of a program. Any units repurchased and the average price of the repurchases are also required to be disclosed in the 10-Q/10-K.
This is something we are working as part of the overall balance sheet strategy for the company. I would expect us to have more color on this topic in the next earnings call and/or closing of the South Pecos. Sale.
I hope this is helpful. Let us know any follow up questions.
Thanks,
Trey
Trey Karlovich
Chief Financial Officer
NGL Energy Partners, L.P.
6120 South Yale Avenue, Suite 805
Tulsa, OK 74136
(p) 918-477-0509
(m) 918-527-2999
trey.karlovich@nglep.com
______________________________________________________
(Jugs speaking now:)
I've long assumed the South Pecos sale was commenced in order to further strengthen the company's balance sheet on one hand and to demonstrate deep conviction on the other hand. You may recall the dollar value of the So. Pecos sale amounts to about 10% of money reclaimed by selling off the retail propane division. Thus it should come as no surprise that Pecos-related monies have yet to exchange hands. I'm thinking that money will clinch the appeal for a buyback go-ahead from the banks. I'd come to that conclusion upon the announcement of the sale so Trey's message has me thinking we're in parallel mode.
Trey is clearly changing stride a bit in reaching out in this manner but the part I especially like is that I need not remain closed-mouthed about it. My IR background pushes me to peer as deeply into words written as I can. I'm appreciating one item before all possible others:
Trey is making a concerted effort to open communication channels with NGL investors. This is a first for me as it's not common practice for MLPs and royalty trusts to have any contact whatsoever with unaffiliated persons. I've attended many meetings with high profile energy leaders and corporate bigwigs but unless I was on an IR shopping list for another company trying to hire me, such communications simply won't happen.
Often investors fail to appreciate the sensitivities of management. I was lucky to pick up on Trey's and Mike's sensitivity early on and were it not for that, alone, I'd not have invested nearly so much.
So think about Trey's note---why would he pursue this path?
My take:
I think he's feeling awfully good about something and can't stand the fact that he dares not let the cat out of the bag. Hmmmm, doesn't that attitude sound a bit familiar around these here parts? lol
One thing we investors invariably miss altogether is that you cannot get a solid read on a company until and unless you take the trouble to know people directing the company and trace their actions and methodology. I believe we're seeing more now than ever before. And my confidence, although never weak, now has me suggesting thinking thusly:
This may be the heads-up announcing before the fact that the window of opportunity is about to close. If the buyback is announced at the CC, then that would make sense as all ears and eyes will be focused on buyback talk at that time. Should the program launch upon the official closing of the So. Pecos sale, that's fine as well. It's all good.
For sure, we now know the few variables involved in terms of timeline dependence. And we know this will likely happen for us very soon, indeed.
____________________________________________
Let's discuss this in depth here on the board. I intend on posting it at Yahoo also as I know a lot of good people there will be hungry for information. As questions come up repeatedly, I'll make note of same and bring them to Trey's attention when appropriate.
For now, let's chew on things.
As for my own actions? I'll be scouring my portfolio, hoping to find
poorly performing stocks I can churn and convert to more NGL. This is the opportunity of my lifetime and I know it. I will not be hesitant for I know too much at this point. Sure, some is conjecture but most is not! I trust in what I'm seeing and those with whom the vision is shared. That explains my connections with NGL and it most certainly does with this wonderful board we all have and enjoy here at IHUB.
Cheers, everybody!
