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Gold/Mining/Energy : NGL to da moon (well, maybe to $10?)!!
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Area51
To: Area51 who wrote (21)11/17/2023 2:33:27 PM
From: Elroy1 Recommendation   of 127
 
I don't think much needs to develop, things can just stay the way they are now and it probably gets to $10 by Q2 2025. That's 20 months, not two years.

By Q1 2024 they will have paid off the $208m remaining in 2025 notes.
By Q2 or Q3 2024 they will refinance the remaining $2.6b 2026/7 debt into perhaps $2.8b 2031 8.5% debt.

At that point they have $260m per year in debt interest payments, and maybe $140m per year in Cap Ex.

The next issue is about $930m in floating rate preferred stock, which will be about $400m or less in arrearage by summer 2024.

Raising $2.8b new debt to pay down $2.6b old debt leaves $200m left over. That's half the $400m arrearage.

With $600m per year in EBITDA, we can just call that free cash flow, and it means they've got $300m per year to handle the remaining $200m arrearage, with $100m left over for "other" (it always comes up).

And in fact, EBITDA is probably going to be more than $600m in fiscal 2025 (Mar). And it's probably growing.

Once they've paid the arrearage (probably by Q1 2025 latest) they've got $300m LT debt interest, $120m preferred dividends, and $150m Cap Ex, leaving at least $65m for "whatever". That's enough for a 65 cents per unit annual distribution.

We'll see. Once they get to next summer the future will be much more clear, but I think a $10 unit price and a ~65 cents per year distribution looks very reasonable for the June 2025-Mar 2026 fiscal year.
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