My focus for now... still the mid-streamers.
OMP did well for me again today, tacking on over 50% thus far since I called it on the low on Sept 30. News out today gives a more than positive tilt in better earnings guidance and stable financial conditions, with the OAP BK still set to resolve as soon as November. I've noted all along that they're making their numbers... and the risks belong to OAP not OMP... and as the market started catching on to that today, the yield dipped below its recent 29+%, and below 27% now with the move today. "After Oasis Petroleum emerges from its highly efficient restructuring process, we expect to resume"... was only about the Q&A session after the conference call... but many probably read more into it... as words intended in saying more. The restructuring will cost the old/current OAP shareholders most of their equity in the conversion of debt, and the loss of most of the upside they've had before, in result of losing the debt as leverage. OAP likely IMO to get hammered, still, post BK, as sudden access to liquidity liberates the former note holders from the risks held... allowing them to sell some shares. But, for OMP shareholders, a revitalized OAP that has eliminated its debt... and has equity to give... is a solidly healthy customer with lots of new room to accelerate growth of field production... while driving those accelerations into OMP's pipes meaning higher future revenues.
Unfortunately, the one I've not been mentioning anywhere, playing it close to the vest, while hoping it would continue drifting lower into December... just didn't cooperate. ALTM spiked up almost $7 after hours... a bit over 70% on the day... sigh. Maybe it won't hold ? ALTM has a far more tortuous path to restoring its troubled growth than OMP has... as it is irrevocably tied to Apache's fortunes in the Permian... but, it does have the advantage of having itself been restructured already, while Apache still twists in the wind. At ALTM the number of shares outstanding now, after doing the reverse with the restructuring... is just really low... giving it maybe another 7X leverage just in the numbers on the reverse there... which might matter... IF they can ever get the whole thing back on the donkey...
Others in the midstream are performing well enough given better days: stable (?) prices (on average) with increasing volumes flowing out of the oil patch. But, I'd still consider rotating out of those that have outperformed thus far... doubling or more... while shifting into a bit more risk held in those with a bit more unfettered upside (more fully realized downside ? ) now... as the individual issues begin to follow their own paths ahead... rather than all following in synch with the market... ENBL, ENLC, WES... couldn't keep up with ALTM today.... although ENLC spiking overnight seems it is holding with OMP...
|
