CEP - Constellation Energy Partners LLC (Public, NYSE STOCK)

[BadThad]

This could be a nice energy play, but it's fairly high risk...it could also be a nice bounce play since it's down over 27% today.

CEP - Constellation Energy Partners LLC - Google Finance

52-week high: $22.74
52-week low: $1.47
Current stock price: $2.46
Todays range: $2.99-2.00

Constellation Energy Partners ($2.37, -$1.00, -29.67%) has suspended its quarterly distributions to shareholders because of a review that showed the oil and natural gas exploration company is 98% drawn on its lines of credit. The company said it had $10.2 million in available cash as of June 25, which it said was sufficient, but that with weakness in natural-gas prices and the economy it couldn't continue distributions at this time.

HOUSTON--(BUSINESS WIRE)--Constellation Energy Partners LLC (NYSE Arca: CEP) today reported that its lenders have completed a semi-annual review of the company’s borrowing base pursuant to the terms of its credit agreements. Based on this review, the aggregate borrowing base under the credit agreements has been set at $225 million. The aggregate borrowing base had previously been set at $265 million.

As of June 25, 2009, borrowings outstanding under the company’s credit agreements totaled $220 million, leaving the company 98% drawn on its lines of credit. Under the terms of the company’s credit agreements, no distributions to unitholders may be made if the borrowings outstanding under the credit facilities, net of available cash, exceed 90% of the borrowing base. As of June 25, 2009, the company had $10.2 million in available cash, leaving the company 93% drawn on its lines of credit, net of available cash. As a result, the company will temporarily suspend quarterly cash distributions to its common (or Class B) and Class A unitholders effective immediately.

“We continue to see signs of distress in the economy and financial markets as well as weakness in the price of natural gas,” said Stephen Brunner, the company’s President and Chief Executive Officer. “While we believe the company has sufficient cash on hand, operating cash flows and available credit to manage the company, distributions to unitholders are currently not permitted based on the requirements of our credit facilities. We currently intend to retain surplus cash as we execute our operating plan for the remainder of 2009.”

Additional details concerning the company’s credit facilities can be found in the company’s filings with the Securities and Exchange Commission and on the company’s Web site (http://www.constellationenergypartners.com).

[newmny65]

You might wait a bit and get in cheaper. I tied up a BUNCH of cash with EROC right after they slashed their div and have pretty much been holding in the red.

[BadThad]

The stock looks to have stayed pretty flat. Futures are pointing up today, perhaps will see a slight move for CEP.

[newmny65]

Starting to look a little better. I might get in this afternoon if it drops to my price..

[BadThad]

Staying flat after the fall, I think this stock is pretty much at the bottom. The real question is, how long before it starts moving up again.....could be a LONG time. If you buy, be ready to hold.

[BadThad]

Just a little more DD, the company looks to be in decent finacial condition compared to other companies I watch:

CEP has a debt to total capital ratio of 28.80% which is in-line with the Oil & Gas Operations industry's norm. With an Interest Coverage ratio of 7.64 and a Quick ratio of 3.55, both of which are in the industry's strongest quintile, the company should be able to easily repay debt.

One thing that sucks, the volume is very low. Only 66k shares traded this morning.

[chicity]

This stock is rocking today. They announce earnings on Friday, I wouldn't be surprised if by the week's close, they were trading at $4 a share. I'd buy now, CEP seems to be following the rest of the big oils lately.

[BadThad]

Thanks for the bump, some DD is in order!