Young Research & Publishing Inc.

Investment Research Since 1978

Disclosure

  • About Us
    • Contributors
    • Archives
    • The Final Richard C. Young’s Intelligence Report
    • You’ve Read The Last Issue of Intelligence Report, Now What?
    • Dick Young’s Research Key: Anecdotal Evidence Gathering
    • Crisis at Vanguard
  • Investment Analysis
    • Bonds
    • Currencies and Gold
    • Dividend Investing
    • ETFs & Funds
    • Investment Strategy
    • Retirement Investing
    • Stocks
    • The Efficient Frontier
  • Investment Counsel
  • Dynamic Maximizers®
  • Retirement Compounders®
  • Free Email Signup
  • Dick Young’s Safe America

Are EnerVest Investors at Risk?

October 26, 2017 By E.J. Smith

The energy hedge funds of private equity firm EnerVest are said to be worth “essentially nothing” to its investors by the Wall Street Journal. But the firm’s senior vice president Ron Whitmire says that’s just not true. According to Houston Chronicle reporter Jordan Blum, Whitmire “disputed that assertion, arguing that upcoming asset sales will create the necessary value to pay off much of its debt. That may not alleviate the concerns of investors who have seen their financial bets largely disappear. Whitmire declined to comment on what EnerVest is telling its investors, citing confidentiality.”

EnerVest is betting big on selling its oil and gas acreage to pay down debts and realign the funds’ balance sheets. It will also rely on renegotiating with lenders to help solve the funds’ problems.

Blum writes:

Rather than speculating on future oil prices, EnerVest invests directly in the oil-and-gas-producing assets, said Pavel Molchanov, an energy analyst at Raymond James in Houston. The acreage, even if considered safe investments at the time, falls prey to the low oil price environment.

“The lesson for everyone is that excessive leverage in a commodity downcycle can be lethal. That’s what led to EnerVest’s meltdown. No big surprise there,” Molchanov added.

Still, Whitmire contends EnerVest is in a solid position overall because of its diversification, investing now in areas like South Texas’ Eagle Ford shale when everyone else is paying top dollar for assets in West Texas’ Permian Basin.

EnerVest’s most recent “Fund XIV” is doing well with almost $2.5 billion committed to it, he said, with the fixes needed for its XIII and XII funds. Likewise, EV Energy Partners partners with EnerVest on some of its acquisitions, but EnerVest’s funds don’t invest in EV Energy.

Still, EV Energy warned investors in May it faces default risks in early 2018 if it can’t work out new deals with its lenders and its finances don’t improve.

Read more here.

Share this:

  • Email
  • Twitter
  • Facebook

You Might Also Like:

  • Investors Building Risk by Blindly Pouring Money into Index ETFs
  • Are Catastrophe Bonds Worth the Risk?
  • Are Investors Too Bullish?
  • Author
  • Recent Posts
E.J. Smith
E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zilldjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris.

Please get in touch with E.J. at ejsmith@youngresearch.com
Latest posts by E.J. Smith (see all)
  • How Did You Save So Much Money? I Really… - April 19, 2021
  • NJ Deli $35k in Sales, $100 Mil Valuation - April 19, 2021
  • The Three Bubbles Threatening Your Portfolio Today - April 16, 2021

Search Young Research

Most Popular

  • It’s as Simple as 4%? No, Not Anymore
  • Is Inflation Imminent? Prepare Now
  • Your Port Against a Storm.
  • Vanguard Wellesley (VWINX) vs. Wellington (VWELX): Which Fund is Best?
  • Long Live the Dividend King
  • Inflation? Yes.
  • Fidelity Investments #1: Hires 4,000 Focuses on YOU
  • Banks Prepare for Boom
  • The Highest Yielding Dow Stocks
  • The Power of a Compound Interest Table

Don’t Miss

Default Risk Among the Many Concerns with Annuities

Risk and Reward: An Efficient Frontier

How to be a Billionaire: Proven Strategies from the Titans of Wealth

Could this Be the Vanguard GNMA Winning Edge?

Cryptocosm and Life After Google

Warning: Avoid Mutual Fund Year End Distributions

Is Gold a Good Long-term Investment?

How to Invest in Gold

Vanguard Wellington (VWELX): The Original Balanced Fund

What is the Best Gold ETF for Investing and Trading?

Procter & Gamble (PG) Stock: The Only True Dividend King

The Dividend King of the North

You’ll Love This if You’re Dreaming of an Active Retirement Life

RSS The Latest at Richardcyoung.com

  • Landmen Shift Focus to Solar and Wind Leases
  • Key West Greetings From the Thirsty Mermaid
  • The Vanguard Wellesley Way
  • Toilet Paper and SPAM: What More You Can Do?
  • Incentivizing People to Stay Home?
  • The Government Cannot Constitutionally Interfere With Gun Ownership
  • French Wine Weather Disaster Worse than 1991, 1997, 2003
  • Key West Breaking News from Dick Young
  • A Pitiful, Helpless Giant?
  • What Happens When Even Logic and Facts Can’t Persuade the Left?

About Us

  • About Young Research
  • Archives
  • Contributors

Our Partners

  • Richard C. Young & Co.
  • Richardcyoung.com

Copyright © 2021 | Terms & Conditions

loading Cancel
Post was not sent - check your email addresses!
Email check failed, please try again
Sorry, your blog cannot share posts by email.