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Breitburn Energy Partners L.P. Message Board

  • mlpvestor mlpvestor Jun 16, 2011 7:24 PM Flag

    the Good, the bad and the ugly

    this is where it is ugly. When a company issues so many shares/units in an acquisition to one party it always seems like cheap financing and sometimes maybe it slightly is; but it is like being on a drinking binge, it may feel good at first but it sure hurts later. because of the overhang of kwk growth fianancing has not been as low as it could have with no kwk; becasue unit price has not reached the mid 20's level/lower yield along with other E&P mlp's as it should have to issue new units

    the bad is unit holder are still going to suffer for another year or so until baupost/kwk are done

    the good. hopefully bbep execs have learned a lesson and next time will use the standard model and issue units to a wide rang of investors and take the medicine early rather than carrying it out over years

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    • At the same time, it appears there is a lot of M&A going on that may turn BBEP into a bargain.

    • 7 months ago when i got out and said your money would be better off elsewhere that this was not going up just standing pat and collecting distribution I was booed out of here. So where are we now and what makes you think it will be any different for next 6 months. So far it has gone down more than the distribution from my exit point so that would make for a total negative return. Meanwhile my CLf has moved from 70 to 98 and Chsi has moved from 33 to 58. Not gloating but telling you the fluff is gone here. It may be a while as mlpvestor has stated. GLTU all.

      • 1 Reply to rlbeard6734
      • Hey rlb! Happy for you.I decreased my position here at a good time also but I think you may want to check back in about 3-5 years .Yeah I accumulated quite a few shares during the KWK lawsuit after I read the pleadings and talked to one of the attorneys.Check my posts out back then if you can .Bad Bernanke and a few other people did a good analysis .So with a basis less than 10 and hedges in place through 2013 I'll wait here for a little longer

    • At the time, they did issue some stock publicly in order to pay for the KWK property aquisition. It was such a large aquisition, relative to their size, that their bankers might have pushed them not to sell more publicly. That decision has not help subsequent buyers of BBEP, but most of us knew about the large KWK holdings when we bought our shares. However, we probably did not think too much about if and when KWK would unload those shares. But you are right, that having KWK as a bigger holder has caused numerous problems. Perhaps doing such a large aquisition was a mistake for a small company.

      Anyway, it is good if you want to buy more shares. As a long term holder it may not have much impact, but it does reduce the option to sell at a good price and move into something else.

      • 1 Reply to cheapstkbuyer
      • i hold a large number of shares waiting for the kwk/baupost overhang to play out which should raise the floor for bbep unit prices. my biggest questions now are

        -what is going on in florida and is that the best place to be spending $10mm per well

        -have they been extracting as much value from the kwk asset acquisition as they should have by now

        -if making e&p acquisitions is so difficult right now why not expand on their michigan infrastructure knowledge and expand in the midstream area. eroc got out of shape with debt like bbep but they have also recovered and are succesfully implementing the dual strategy and pvr has a dual strategy of coal and midstream. bbep should not downplay their experience value in midstream

    • Good post.
      I think most investors and businesspeople would agree that shortcuts seldom work, whatever the circumstance.

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