Am getting the paper Arnold, based on your recommendation. Antero is applying for new permits almost every week. Just takes some patience…price will probably be back up in 2016 sometime.
Currently rated as buy - Antero Midstream
Antero Midstream Partners LP revenues grew 328.14% in FY 2014 as compared to FY 2013 to 95.75M. Net income grew 217.44% to 16.83M
Antero Midstream Partners LP revenues grew 328.14% in FY 2014 as compared to FY 2013 to 95.75M. Net income grew 217.44% to 16.83MAntero Midstream Partners LP revenues grew 328.14% in FY 2014 as compared to FY 2013 to 95.75M. Net income grew 217.44% to 16.83MAntero Midstream Partners LP revenues grew 328.14% in FY 2014 as compared to FY 2013 to 95.75M. Net income grew 217.44% to 16.83M.
Ditto Arnold and Jacqueline
PART II
2. Permitting does not equate to drilling. I believe a better analytical tool to rely upon is not the number of permits listed in the newspaper, but the number of rigs, actually in the county. You need not drive the roads of Doddridge County to know the number of rigs has drastically reduced and you can find the monthly Rig Count numbers, published online. Additionally, some companies quantify Permitted Acreage as an asset on their Balance Sheet, which allows them to borrow more money. (I do not know AR’s accounting practices.)
3. In 2015, I have had leases with AR expire and they have shown no interest in leasing the same parcels again; that alone has given me a rise in concern.
4. You mention that you still receive numerous offers to purchase your “interest in minerals”. At what price are the offers, in comparison to 12 months ago or even 6 months? Many companies are circling like buzzards, trying to purchase at ridiculously low prices, like ‘close-out buyers’. Recently I had an offer to purchase un-leased acreage in Doddridge County, at $374.00 / NMA, a tenth of what that parcel would have leased for, 18 - 24 months ago.
5. Was the article published in the Doddridge Independent a journalistic article, or a puff-piece about a company that purchases a lot of ink, in the Legal Section? Is the Doddridge Independent a source you are comfortable to rely upon on the OGM Industry or any other matter?
Lastly, I am NOT wishing for the demise of AR! I openly admit that I am blessed; OGM royalties are supplemental income, not my primary source of earnings. However, I believe optimist skepticism is prudent and there is cause to be concerned about the industry as a whole.
WJ
PART I
Let me first preface that I am neither an attorney nor an investment specialist and the following is simply my opinion…
Arnold, I am not as optimistic as you are, considering many conditions.
- AR was listed on THE OXFORD CLUB “Company Death Watch” list. AR’s current P/E is 4.84, their Debt to Earnings (debt/EBITDA) is 4.99, Debt to Equity is 110.30% and has 4.14 Billion in debt with only 6.31 Million in cash. Admittedly, this report was published in the spring of 2015, but the markets have faired about the same, with commodity prices for natural gas hovering at similar ranges.
A. (P/E 4.84) “A low P/E ratio does not necessarily mean that a company is undervalued. Rather, it could mean that the market believes the company is headed for trouble in the near future. Stocks that go down usually do so for a reason.”
B. (Debt to Earnings 4.99) “The higher the ratio, the more likely a company won’t be able to service its debt. For example, if a company has a debt/EBITDA ratio of four, it means that its current total debt is four times greater than the earnings it brought in over the last 12 months. In comparison, the oil and gas industry is averaging a ratio closer to two. Ratios above four should always sound off alarms. Companies above this range are less likely capable of handling their debt burdens. As a result, they are also less likely to be able to take on the additional debt required to grow the business. And that is assuming lenders are even willing to provide more cash.”
C. (Debt to Equity 110.30%) “As an added barrier, companies on the death list also have debt to equity ratios above 100%. Higher debt/equity ratios signal that companies have been aggressive in financing their growth with debt. And if the costs of financing debt begin to outweigh the return a company earns on that debt, bankruptcy is right around the corner.”
D. (Debt to Cash 4.14 Billion to 6.31 Million) Regardless of on what resources you use, the majority will state that it requires more than $6,310,000.00 to drill a single horizontal Marcellus Well, in drilling operations alone.
Wilson, I can certainly see where you are coming from, however when the price of something is down crap happens, from Royalty checks being down, to only 5-6 rigs in town in lieu of 15-16, it’s called Company down sizing to fit in with cost of product. It’s kind of like So-called Global Warming, the ice cap is now forming again and El Nino is on its way, their are dry day’s and wet day’s, it’s god’s way. I believe your buisness and mine will be back on top in a 2-3 years, I also believe that t he folks on this forum from time to time needs to hear something positive. But what do I know, I am an eighty year old fart that has always looked on the positive side, seen many changes and have always came up smelling like roses. Oh by he way I recently sold some of my interest for $10,000 and acre ( probably ask for more now) why are companies still trying to buy when things are SO BAD??.
Nancy, article was in Oct 16 issue.
As Arnold so graciously stated, no need to apologize. Everyone is entitled to an opinion and you stated that of The Oxford Club; I stated that of Wall Street. The future of any of these companies is opinion and now we have both opinions from 2 different sources. Nice to get both points of view, given that there is no crystal ball. I think we are all aware that signing a lease with any company is an indirect investment with that company. Your thoughts are always welcome here, as are anyone’s. We count on it.
Wilson, I hope the Oxford Club isn’t your only source. They’re a paid subscription service for investors, yes? Via NYSE… Antero is currently ranked as “out -perform” meaning a stock is expected to do slightly better than the market return. Also known as “market outperform”, “moderate buy”, or “accumulate”. Antero Resources Corp revenues grew 107.19% in FY 2014 as compared to FY 2013 to 2.72B. Net income grew 3,658.30% to 673.59M. Sounds to me like they are making some prudent choices now (downsizing) and looking to the future by applying for permits that can take up to a year or better to be approved. Perhaps the words of Mark Twain, “news of my death have been greatly exaggerated,” could well prove to be true here. News last week that the big banks have already set money aside to support the debt of some of the big oil and gas guys is also encouraging. Goldman Sachs etc are expecting energy to come back, and will stand by their customers. Just another point of view. And Arnold… applause:)
revenues grew 107.19% in FY 2014 as compared to FY 2013 to 2.72B. Net income grew 3,658.30% to 673.59M.
Jacqueline,
As I stated to Arnold, I apologize if my words came across as overly negative, caustic or brutish and for any offense.
Suffice to say, I do not rely upon only one source in making any decisions in life or signing of leases, but do closely review a company’s Annual Report, 8-K & 10-Q. Indirectly, signing a lease with any company is an indirect investment in that company. If you are unaware, I suggest you research what happens to mineral owners, when a production company files for bankruptcy.
In the future, I shall reserve any / all opinions and only read what others submit to the threads. That stated, if anyone is in need of advice on leases, pooling modifications, or any other factual based, non-opinion based insight, do not hesitate to contact me directly.
Cheers,
WJ
Arnold,
I apologize if my words came across as overly negative, caustic or brutish and for any offense a reader may take from my post.
Commodity prices do not affect the treatment royalty owners receive from any production companies. I am tired of being minimized as only a ‘mineral owner’ by the various production companies and Landmen. Let us be honest, they will take advantage of anyone they can, at any opportunity. Just today, it was reported that a Federal lawsuit has been filed against Chesapeake for having sold oil and gas at below-market prices and improperly deducting cost from royalty payments. The production companies are aware that the average mineral owner is not in a position to file a lawsuit to get what is rightfully theirs.
My first introduction to AR was after they purchased Bluestone Energy to get a foothold in the Mid-Ohio Valley. Prior to the acquisition, I had the ultimate faith in the integrity of Bluestone and had a fantastic working relationship with one of the principals, a gentleman that was born and raised in Doddridge County. I knew things were going to be different, the day I prepared to drive to Ellenboro to sign a Pooling Modification at a meeting that had been scheduled for two weeks and received a notice that AR had filed a partition suit against me, since I had not signed that exact Modification.
I have been sued twice (and won) by a production company who are demanding a Pooling Modification, for the same parcel, which greatly altered the original terms of the lease. I have no qualms in signing a Pooling Modification, but will not allow the original terms to be altered, to favor the production company. Unfortunately, not many mineral owners are in a position to pay 10,000.00 + in legal expenses, to reserve what is justly theirs and production companies are relying on that fact.
I could go on as to why I am not optimistic about the future of AR, but shall simply say that I do hope their predictions come true and we all profit greatly from our mineral ownership.
Best wishes,
WJ
Wilson, You need not apologize, the blood has run deep in a lot of posting on this forum, however in the long run we as a whole are a great bunch of people, that are hoping for the best.
Well said jacqueline
I am trying to take advantage of this slow period by continuing my genealogy research of my Doddridge families. Maybe this is old news, but I just discovered an easy way to view last will and testaments online. By using the website, commonly pointed out by Nancy, the Doddridge Co. Document Inquiry, http://129.71.205.241/ , to find the book and page number of the Will and the Family Search West Virginia Will Books, https://familysearch.org/ark:/61903/3:1:9392-C3TN-J?owc=M6DN-PNP%3A… , you can find the Will, view and download it. Family Search also has other WV counties and states scanned in. They have not been indexed into their search but you are allowed to browse through all the records. Some of the counties, including Doddridge, have an alphabetical index in the first pages of each book in case you don’t know the exact page number to look for, it will have it listed. This is saving me from having to either ask for records from the courthouse or go there myself to look them up! Hope this helps some people with their research!
Thanks, Stephanie! That should be very interesting to explore. I hadn’t known about it before.
Mr. Wilson Johnson, Please do not hesitate to offer your insight and knowledge on this site. There are still lots of people out there that have not gone through the lease process nightmare and your help, along with others on here, is priceless. Where can one go and get the info provided here without spending thousands of dollars. Getting an attorney is good but, when you need more info now, we want to be able to provide that info now. When our family had a partition suit filed, I and others would have loved to have had you in our corner. At the time, no one knew much about partition suits. Nancy and myself know a lot about them now. As for my thoughts on AR…Can’t stand them
Is there a way I can look up whether or not there have been permits issued to drill or if they have started drilling? We are in a 5 yr lease (yes they can extend it for one more 5 year period) and the 5 years is almost up and we haven’t heard a thing. If I need a permit number to see if drilling has begun, how do I obtain the permit number?
Nicole, if you know the county, district, map # and Partial #, and the last name on the lease someone on this forum may know your answer. The way that I track my lease is by going to the weekly report (West Virginia Dept of of Enviornment protection ( Weekly Report) and check the permits, it will show you a map that will determine ownership,of course this should have been done soon after you signed the lease, being a five year old lease it could have been permitted long ago.
Nicole, if you know where your property is, you can go hereWV Office oil and gas map and move around until you see your area, then look for circles and especially ones with orange lines going from star-like things. Those are permitted horizontal wells. If you see one that seems to be near or under your property, go here and select your county, then look down until you find the API number connected with the line you found. This should give you more information. I know this is not a detailed explanation but there are more details elsewhere. If you have questions please ask.
You might try this permit search site because sometimes the owner’s name is either the well name or farm name.
You can contact the Assessor’s office and order the tax map that is listed. Ask if they have an index map for the district which they can send. With that, you can find landmarks like creeks, roads, etc and then go look for them in the map link I put below. Not easy but can be done.
Arnold’s suggestion is a good one too, to look at Weekly Reports and look for your county and see if anything is there. Definitely hit or miss.
Ways to get started.