24/7 Wall St. » ENP

Encore: Change Partners and Dance (EAC, ENP)

247wallst — Wed, 10 Dec 2008 10:23:08 +0000

Yesterday, we reported on a deal involving a master limited partnership buying a property from the owner of its general partner. Last night, Encore Energy Partners (NYSE:ENP) announced that it bought about 1,800 producing and royalty interest properties from Encore Acquistion Company (NYSE:EAC) for $49 million. The properties currently produce about 500 barrels of oil equivalent daily, most of which is natural gas. The properties are expected to produce for another 15 years or so.

Encore Energy’s CEO and president said that these properties are "agood match" for a master limited partnership because they offer "highmargins, predictable production profiles, and shallow declines." Thecompany is using its revolving credit to fund the purchase. About $3million of the purchase price was used to hedge production for the nextfour years at an average price of $7.51/thousand cubic feet of naturalgas.

Encore Acquistion owns two-thirds of the common shares of Encore Energyand all the interests of Encore Energy’s general partner. At the end ofSeptember, Encore Energy reported long-term debt of $164.7 million, andEncore Acquistion reported long-term debt of $1.2 billion.

Encore Energy had $34 million in operating cash flow in the thirdquarter, and paid out about $23 million in distributions. This latestpurchase will allow the company to increase its operating cash flow,and juice its payouts a bit for the current quarter. And that’s whatMLPs are all about: increasing distributions.

Paul Ausick
December 10, 2008

Posted in Mergers and Buy Outs, Oil & Gas Tagged: EAC, ENP

Encore Files Large Shelf Registration (ENP, EAC)

247wallst — Wed, 01 Oct 2008 16:44:32 +0000

Encore Energy Partners LP (NYSE: ENP) has filed a shelf registration to sell up to $1,000,000,000.00 in securities for its units. It will sell common units representing limited partner interests in Encore Energy Partners LP and debt securities of Encore Energy Partners LP and Encore Energy Partners Finance Corporation.

This is a Delaware limited partnership formed in February 2007 by EACto acquire, exploit and develop oil and natural gas properties and toacquire, own and operate related assets. Its primary business objectiveis to make quarterly cash distributions to unitholders at currentdistribution rates and to increase those quarterly cash distributionsover time. Its assets consist primarily of producing and non-producingoil and natural gas properties in the Big Horn Basin of Wyoming andMontana, the Permian Basin of West Texas, and the Williston Basin ofNorth Dakota.

Encore Energy Partners has a current market cap of $692 million. At$22.08 on the close, it is in the middle of its $16.56 to $28.73trading range over the last 52-weeks.

Encore Acquisition Company (NYSE: EAC) is the ultimate parent company of the general partner and its subsidiaries.

Jon C. Ogg
October 1, 2008

Posted in Oil & Gas, Secondary Offering Tagged: EAC, ENP

Top 10 Pre-Market Analyst Calls (AMGN, ENP, NTAP, PT, QCOM, SWIR, VCLK, VRSN, WY)

247wallst — Thu, 15 Nov 2007 07:57:39 +0000

These aren’t all of the impact analyst calls, but these are the key calls that 24/7 Wall St. is focusing on:

Amgen (AMGN) raised to overweight at Lehman.
Encore Energy (ENP) started as Overweight at Lehman.
Network Appliances (NTAP) raised to Peer Perform at Bear Stearns; estimates raised at Goldman Sachs.
Portugal Telecom (PT) raised to Peer Perform at Bear Stearns, but cut to Hold at Citigroup.
Qualcomm (QCOM) earnings estimates cut at Goldman Sachs.
Sierra Wireless (SWIR) cut to Market Perform at Piper Jaffray.
ValueClick (VCLK) raised to Buy from Hold at Citigroup.
VeriSign (VRSN) cut to Hold from Buy at WR Hambrecht.
Weyehaueser (WY) raised to Buy at Lehman.

Jon C. Ogg
November 15, 2007