Sanchez Prod Partners
Sanchez Prod Partners
Sanchez offers a ridiculous 17% yield, which usually means a cut is not too far away. What's your current take on the company? Thx.
Re: Sanchez Prod Partners
I've not looked at it closely in over a year.
Go to their 10-Q (which you can find on their website)
Spend about ten minutes going over the Statement of Cash Flows
What you will see is that cash flow from operations can cover all debt service, but after they make distributions on the preferred units there is not enough cash left to make distributions to the common unit holders. Obviously, they cannot keep making those distributions much longer unless revenues go way up.
Positive income in Q3 is encouraging, but cash flow from operations in Q3 was only enough to cover the distributions to the preferred unit holders.
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This is a good sign:
HOUSTON, Dec. 14, 2017 (GLOBE NEWSWIRE) -- Sanchez Midstream Partners LP (NYSE American:SNMP) (“SNMP” or the “Partnership”) today announced that its lenders have completed a regularly-scheduled redetermination of the borrowing base under the Partnership’s credit agreement. The redetermination resulted in a borrowing base of $249.3 million, a 16 percent increase from the Partnership’s previous borrowing base of $215.6 million. The midstream portion of the borrowing base was set at $211.3 million, higher than the credit agreement’s commitment amount which remains unchanged at $200 million.
MANAGEMENT COMMENTARY
“The borrowing base increase announced today demonstrates the positive financial impact our midstream projects have on the business,” said Gerry Willinger, Chief Executive Officer of the general partner of SNMP. “With the recent operational additions of our wholly owned SECO Pipeline and the Raptor Gas Processing Facility, a 50 percent joint venture with Targa Resources Corp. that was recently upsized to processing capacity of 260 million cubic feet per day, the midstream component of our borrowing base increased significantly and is now above the commitment amount of $200 million under the credit agreement. We appreciate the support our lenders have shown during this redetermination cycle, and look forward to working with them as we continue to execute our business plan.”
About the Partnership
Sanchez Midstream Partners LP (NYSE American:SNMP) is a growth-oriented publicly-traded limited partnership focused on the acquisition, development, ownership and operation of midstream assets in North America. The Partnership has ownership stakes in oil and natural gas gathering systems, natural gas pipelines, and a natural gas processing facility, all located in the Western Eagle Ford in South Texas.
Go to their 10-Q (which you can find on their website)
Spend about ten minutes going over the Statement of Cash Flows
What you will see is that cash flow from operations can cover all debt service, but after they make distributions on the preferred units there is not enough cash left to make distributions to the common unit holders. Obviously, they cannot keep making those distributions much longer unless revenues go way up.
Positive income in Q3 is encouraging, but cash flow from operations in Q3 was only enough to cover the distributions to the preferred unit holders.
-------------------------
This is a good sign:
HOUSTON, Dec. 14, 2017 (GLOBE NEWSWIRE) -- Sanchez Midstream Partners LP (NYSE American:SNMP) (“SNMP” or the “Partnership”) today announced that its lenders have completed a regularly-scheduled redetermination of the borrowing base under the Partnership’s credit agreement. The redetermination resulted in a borrowing base of $249.3 million, a 16 percent increase from the Partnership’s previous borrowing base of $215.6 million. The midstream portion of the borrowing base was set at $211.3 million, higher than the credit agreement’s commitment amount which remains unchanged at $200 million.
MANAGEMENT COMMENTARY
“The borrowing base increase announced today demonstrates the positive financial impact our midstream projects have on the business,” said Gerry Willinger, Chief Executive Officer of the general partner of SNMP. “With the recent operational additions of our wholly owned SECO Pipeline and the Raptor Gas Processing Facility, a 50 percent joint venture with Targa Resources Corp. that was recently upsized to processing capacity of 260 million cubic feet per day, the midstream component of our borrowing base increased significantly and is now above the commitment amount of $200 million under the credit agreement. We appreciate the support our lenders have shown during this redetermination cycle, and look forward to working with them as we continue to execute our business plan.”
About the Partnership
Sanchez Midstream Partners LP (NYSE American:SNMP) is a growth-oriented publicly-traded limited partnership focused on the acquisition, development, ownership and operation of midstream assets in North America. The Partnership has ownership stakes in oil and natural gas gathering systems, natural gas pipelines, and a natural gas processing facility, all located in the Western Eagle Ford in South Texas.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
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ddlopata084
- Posts: 102
- Joined: Sat Dec 27, 2014 8:56 pm
Re: Sanchez Prod Partners
I believe part of the share price concern/fear is related to the possible forced conversion of the preferred shares to common, which will result in a massive dilution to the common. And, as Dan alludes and the high yield implies, a dividend cut on the common must then follow...
I have to admit I don’t remember the details on the conversion.
I have to admit I don’t remember the details on the conversion.