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• The Norwegians Are Coming

  Prudent Speculations submits: Earlier this week Chesapeake Energy (CHK) announced that the company was proceeding with the sale of a 32.5% interest in its Marcellus Shale development to StatoilHydro (STO), the Norwegian oil giant.  In return for its new interest in one of North America’s more interesting shale plays, StatoilHydro is paying $1.25B plus the guarantee that it will foot 75% of the expected drilling costs through 2012 for an additional $2.13B.  Another Norwegian company, Norse Energy has already built up a sizeable acreage position in the Marcellus Shale totaling somewhere around 175,000 acres.  Given the interconnectedness of Norway it would not surprise me at all if the executives at Norse Energy and StatoilHydro had at the very least talked over the opportunities that the Marcellus Shale offers to natural gas prospectors.  Nevertheless, the emergence of StatoilHydro as a passive foreign partner should serve as a reassurance to domestic gas produces in search of cash as the Norwegian giant is more likely than not only the beginning of wave of large foreign multinationals looking to diversify their production base via the acquisition of U.S. oil and natural gas producers in relatively low cost venues.  Complete Story » Posted Friday, November 14, 2008 3:18 AM Filed under: XCO, ATN, CHK, Prudent Speculations, NFG, QRCP, D, STO

• Atlas Pipeline: As Dividend Continues, Why Is Stock Falling?

  Tim Plaehn submits: Atlas Pipeline Partners (APL) has declared a 3rd quarter dividend of 96¢, matching the 2nd quarter payout. In the two trading days since the announcement the share price has dropped almost 15%. This has me quite confused. I would understand if the market was pricing the stock at a 7% yield and the price falls because the dividend did not increase, but at $19 APL is yielding 19%. Even more incredible, Atlas Pipeline Holdings (AHD) increased the dividend from 42¢ to 51¢ and that stock is off 20% to yield over 20%.  AHD operates the general partner interest in APL, receives the GP incentives and holds over 5 million units of APL. Complete Story » Posted Thursday, October 30, 2008 3:29 AM Filed under: ATN, Tim Plaehn, APL, AHD, ATLS

• How to Pick an MLP for This Market

  I put together some thoughts on a group of MLPs (Master Limited Partnerships) at the request of a number of subscribers. There are 50 or so U.S. MLPs out there in various parts of the energy business but I limited myself to the upstream (E&P) variety as pipelines and midstream (processing) operations are not my normal ballywick. I’m very comfortable dissecting E&Ps and I took a list of 10 and weeded that down to six I might see investing in for the long term. Where we are in the cycle. The MLPs have been to hedge funds what money markets are to you and me, a place to deposit cash, only with a much better yield and a fairly predictable and safe one as long as commodity prices are flat or rising. Recently, hedge fund redemptions have pounded the shares. There is actually a MLP index, the Alerian MLP Index, ticker AMZ, which peaked at about 342 in mid July 2008 and hit a low of 151 on October 10 before closing at 220 yesterday. So it's volatile. Look at how the index performed during and following the last few market implosions relative to the S&P500 (the index is blue and the S&P is yellow if you can’t make it out in the chart’s legend): Complete Story » Posted Tuesday, October 21, 2008 2:09 PM Filed under: ATN, Zman, LINE, BBEP, LGCY, EVEP, CEP

• Firesale in Oil and Gas (Upstream) Limited Partnerships

  Jens Heycke submits: In an April article ("Upstream MLPs and Canadian Royalty Trusts: High Return, High Risk?"), I wrote: Lehman Brothers owns substantial stakes in nearly every upstream MLP -- more than 10% in several cases. If circumstances force Lehman to dump those units, it might present great buying opportunities for holders with new money and a long term perspective, but really stressful times for current unitholders." This was sadly prescient. Lehman and hedge funds liquidated these stocks with wild abandon. This has been compounded by the mis-perception that when commodity prices soared, the mark-to-market, paper losses on these companies’ hedges were real losses. A recent AP headline read "EV Energy Partners swings to 2nd-qtr loss on bad hedges. Complete Story » Posted Friday, October 10, 2008 2:51 AM Filed under: ATN, LINE, BBEP, LGCY, VNR, EVEP, PSE, Jens Heycke

• @VIC: Leon Cooperman on "The Investing Climate & All-Weather Stocks"

  Todd Sullivan submits: Todd Sullivan attended this week's Value Investing Congress on behalf of Seeking Alpha. Leon Cooperman presented on "The Investing Climate and All-Weather Stocks" Complete Story » Posted Wednesday, October 08, 2008 7:15 AM Filed under: ATN, APL, AHD, ATLS, Todd Sullivan

• Atlas Energy: More 'Criminally Undervalued' Than Cramer Realizes

  Prudent Speculations submits: As many of you know, I have been a longtime fan of the Atlas family of companies.  For those that are interested you can find a brief write up of mine of the parent company, Atlas America (ATLS) here.  Of the Atlas America subsidiaries, Atlas Energy Resources (ATN) has been catching the eye of members of the investment community of late.  One of its more vocal proponents has been Jim Cramer.   Mr. Cramer’s involvement and discussion of the stock means that the investment thesis behind Atlas Energy Resources is becoming increasingly understood by mainstream investors, which is a great thing for those shareholders that got into the stock long ago.  Nevertheless, market pundits such as Mr. Cramer are still failing to differentiate Atlas Energy Resources from its peers.  Regarding Atlas Energy Resources Mr. Cramer recently stated that, “Atlas Energy is criminally undervalued" and that at its current price it is an absolute steal.  Complete Story » Posted Friday, August 22, 2008 5:09 AM Filed under: ATN, Prudent Speculations, AHD, ATLS

• Atlas Pipeline & Atlas Energy's Positive Synergy

  Tim Plaehn submits: I have had Atlas Pipeline Partners (APL) as a component of my Income Portfolio since the first of the year (2008) and the dividends have been outstanding, paying 93¢ (Q4,2007), 94¢ and 96¢ so far this year. On the recent earnings release the company is projecting $2.00 to $2.20 for the next 2 quarters and $4.25 to $4.50 for 2009. The share price is down significantly from around $43 to start the year, but I believe the market has this one wrong and the income growth should continue. While listening to the earnings conference call last week for APL the comment was made that the sister company, Atlas Energy Resources LLC (ATN) would announce this week, so I decided to listen in. To put it bluntly, I am impressed! ATN is a natural gas producer that seems to be firmly set on a growth path. It is now the largest producer in the growing Marcellus Shale and is working to at least double production there in the near future. It also has new production coming on line in Tennessee and a stable production base in Michigan. Complete Story » Posted Sunday, August 10, 2008 7:36 AM Filed under: ATN, Tim Plaehn, APL

• The Quest for Marcellus Shale Exposure

  Prudent Speculations submits: The Marcellus Shale is quickly becoming the biggest thing in the U.S. natural gas industry since the Barnett Shale. You can hardly watch CNBC without hearing Jim Cramer talk about the Marcellus Shale and his “wildcat drillers.” As investors, we know that if you want exposure to the Marcellus you cannot just buy any company with Marcellus acreage. You need to buy the company with the greatest exposure to the Marcellus if you want to maximize your investment gains. Unfortunately, I have not been able to find any publicly traded company that is a true pure play on the Marcellus Shale. But, after looking at the different companies involved in the play, some clearly stand out as having more exposure than their peers. The following table shows the enterprise value per acre of the Marcellus Shale drillers: Complete Story » Posted Thursday, July 17, 2008 12:19 PM Filed under: REXX, XCO, ATN, RRC, CXG, EQT, CHK, Prudent Speculations, NFG, QELP, EOG, QRCP, COG, XTO