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Breitburn Energy Partners LP Message Board

cheapstkbuyer 58 posts  |  Last Activity: Apr 26, 2016 9:31 PM Member since: Nov 16, 1998
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  • Reply to

    annual report

    by dogwood1855 Apr 26, 2016 8:36 PM
    cheapstkbuyer cheapstkbuyer Apr 26, 2016 9:31 PM Flag

    If management didn't think things were pretty dire, why did they suspend preferred distribution and not make interest payment on the senior notes?

  • Reply to

    BBEP Will Move Higher Soon

    by rmenjivar123 Apr 25, 2016 4:08 PM
    cheapstkbuyer cheapstkbuyer Apr 25, 2016 5:42 PM Flag

    One thing you are ignoring is that they issued $350mil. in preferred after March 2015 quarter. That accounts for almost all of your $400Mil. debt reduction.

    True it's not debt, but it is an obligation ahead of the common stock.

    Excess hedge cashflow, which drops off sharply in next 2 years, is going to pay down the bank credit line. That's a plus, but the negative is that production is now falling due to low capex. So, asset value falling as well, as reserves being pumped and not replaced.

    Need the big oil rally and $75-80 hardly a given. If so, put all your money in oil futures and you will be rich.

  • Reply to

    fiduciary responsibility, again

    by readin44 Apr 21, 2016 5:31 PM
    cheapstkbuyer cheapstkbuyer Apr 21, 2016 8:32 PM Flag

    Correct. A leveraged bet on oil that lost. Good luck suing the casinos when you lose in Vegas.

    Management derelict, but everyone knew the bets they were making.

    Current assets worth less than current debt. Convert unsecured debt to equity. Preferred and common will be diluted to a small percent of ownership.

  • Reply to

    fiduciary responsibility, again

    by readin44 Apr 21, 2016 5:31 PM
    cheapstkbuyer cheapstkbuyer Apr 21, 2016 8:10 PM Flag

    You are in at $0.80 and feel duped? By then it had dropped it had dropped over 95%. By then oil had crashed. By then it was clear big cash flow problems loomed when hedges would roll off in 2018.

    Obvious it was a high risk situation at that point. How can you feel duped now?

  • Reply to

    Crooks

    by concrete4116 Apr 21, 2016 2:08 PM
    cheapstkbuyer cheapstkbuyer Apr 21, 2016 3:36 PM Flag

    Has the guidance not been accurate? The main short term issue is the bank credit line, which is somewhat out of their control. Although, they might have been over optimistic on April redetermination expectation, but that has not been resolved yet. They did say it could be significantly reduced.

    Bigger mistake, in my opinion, was the amount of leverage they added at high oil prices. That was reckless. Although, well known by all who did due diligence.

    Guidance only useful for production, cost and capex expectations.

    Giving bonuses to restructure sleazy as well.

  • Reply to

    Selling 77% of Oil for $86 in 2016?

    by dogwood1855 Apr 18, 2016 11:06 PM
    cheapstkbuyer cheapstkbuyer Apr 20, 2016 10:40 AM Flag

    Look around the world? Does anyone have it made? Not really.

    Capitalism has its flaws and somewhat rigged for upper management. Case in point is management getting extra bonuses here after ruining the company.

    But socialism/capitalism even worse. Always ends up which a big govt state trying to control everyone's life to maintain power. So, not a fan of where Beenue wants to go.

    If you have been in index fund over your life you have probably earned around 9%. At least it is possible to earn some money if one diversifies. Betting too much on anything is a huge risk. So, try not to worry too much about things in life that one can't control and enjoy the more important things in life.

  • Reply to

    Ten Million In Bonuses?

    by praytodayfriend Apr 18, 2016 9:53 AM
    cheapstkbuyer cheapstkbuyer Apr 18, 2016 11:56 AM Flag

    Love the extra bonus for losing billions for investors. Classic.

  • Reply to

    CLAWBACK. Time to CHILL or organize

    by zooplankton200 Apr 15, 2016 6:57 PM
    cheapstkbuyer cheapstkbuyer Apr 15, 2016 7:11 PM Flag

    Well, the company is pretty experienced at making money disappear....

  • Reply to

    LINE paid March interest due

    by altitudebrew Apr 15, 2016 8:21 AM
    cheapstkbuyer cheapstkbuyer Apr 15, 2016 10:16 AM Flag

    Yes, certainly could still get the April interest payment.

    We all know they need to restructure the debt, but getting there will be messy.

    Eig should take some haircut on their second lien notes and/or reduce the interest rate and increase the maturity. Unsecured senior notes should be converted to equity, and own the lion share of the company. Preferred should also be converted to common, but at a large haircut to the senior notes. Common holders would be diluted down to a very small ownership. Sorry, but in liquidation common would get nothing. Do a reverse split to get price back up to a reasonable level.

  • Reply to

    If they restructure the debt....

    by bridgejumper08 Apr 14, 2016 4:56 PM
    cheapstkbuyer cheapstkbuyer Apr 14, 2016 6:29 PM Flag

    Cashing out hedges would be a taxable event too. They might do that to reduce credit line if desperate.

  • cheapstkbuyer by cheapstkbuyer Apr 14, 2016 6:18 PM Flag

    What were they trading at and the end of the day? Can't find them on Schwab.

  • Reply to

    Is the best upside in Sr. Unsecured Notes

    by arbitrage_hedgie Apr 11, 2016 11:28 PM
    cheapstkbuyer cheapstkbuyer Apr 12, 2016 6:42 PM Flag

    They also have $252MM Asset retirement obligation as a liability. More than twice the market value of the senior notes. That offsets a good chunk of the non oil and gas and derivative assets.

    When you net a lot of things out , it is mainly the oil and gas properties plus the derivatives plus a slight net positive amount of all other assets minus non senior note debt.

    Luckily value of properties is going up again.

  • Reply to

    BBEP- Understanding

    by cardplayer5858 Apr 11, 2016 6:29 PM
    cheapstkbuyer cheapstkbuyer Apr 11, 2016 7:08 PM Flag

    Yes, based in cashflow they should not go chapter 11 this year. Biggest risk is the banks want to cut the credit line more than they can handle. By next year they certainly could be violating leverage covenant in the bank line.

    Only about $1.1Bil. of the bonds are priced at the 7 cents. Not the credit line and not the secured EIG bonds. And if you try to buy in quantity, the price will go up quickly. Plus the tax hit.

    Bank credit line provisions may also block them from using funds to payoff other debt first. They are greedy and want to be paid first.

  • Reply to

    Help me Umderstand

    by concrete4116 Apr 9, 2016 8:29 AM
    cheapstkbuyer cheapstkbuyer Apr 11, 2016 5:20 PM Flag

    Makes sense. Bonds probably okay, but I was disappointed to find that EIG was senior. Wouldn't touch the common or preferred.

    Do you think EIG will try to come in with more second lien debt? Maybe if banks cut the line hard. But not sure they want to pony up more. They must be mentally writing off the preferred at this point.

    Eig rescue could mean this coupon and maybe next get paid, but would reduce the pie down the line.

  • Reply to

    Help me Umderstand

    by concrete4116 Apr 9, 2016 8:29 AM
    cheapstkbuyer cheapstkbuyer Apr 11, 2016 1:44 PM Flag

    Yeah, no one wants to pay the accrued interest with it in doubt. If they pay the coupon, price should pop up some.

    One negative for the notes is that the EIG notes are secured by second lien. So, $1.9bil in debt collateralized ahead of these notes.

    With oil and gas properties valued (PV10) some where in the vicinity of $2bil, not much value left after the secured debt. At least this is my take on the low price of the notes.

  • Reply to

    What is driving this run?

    by rahdbob3 Apr 11, 2016 9:54 AM
    cheapstkbuyer cheapstkbuyer Apr 11, 2016 11:39 AM Flag

    Hard to say who is buying. I sold some today, but may regret it tomorrow...

  • Reply to

    BBEP compared to other oil MLP's

    by m_sebato Apr 10, 2016 3:13 PM
    cheapstkbuyer cheapstkbuyer Apr 10, 2016 9:12 PM Flag

    It's down more than 90% since you convinced yourself it was a solid investment. That should tell you something. I notice how you only argue with feelings and not facts.

    I am not short and wouldn't recommend that either. Certainly oil can take off in a big way and bail this out. But a safer bet would be to buy oil futures or BBEP bonds.

    Look at their valuation of the oil and gas properties they did late last year and compare it to their debt. Debt greater than asset value is a dangerous thing. That's why bonds, which get paid ahead of you, are trading 10cents on the dollar.

    This is a deep out of the money option on oil. A long shot. But hey, long shots come in every now and then. But they are risky, not solid investments.

  • Reply to

    BBEP compared to other oil MLP's

    by m_sebato Apr 10, 2016 3:13 PM
    cheapstkbuyer cheapstkbuyer Apr 10, 2016 8:26 PM Flag

    Nice pump. Management's "smarts" has lost billions for investors. BBEP is likely to be one of the ones that falls by the wayside, but always possible the oil gods will bail you out. Bonds trading below 10 cents on the dollar is all you need to know about how good the future looks.

    Averaging down a dangerous strategy with deteriorating fundamentals. A lesson usually learned the hard way.

  • Reply to

    Bond buys

    by kmknier Apr 8, 2016 3:29 PM
    cheapstkbuyer cheapstkbuyer Apr 10, 2016 5:30 PM Flag

    Found the answer to my question . The EIG notes are senior to the publicly issued 2020 and 2022 notes.

    I just lost any interest in those. I assume EIG notes not publicly trading.

  • Reply to

    Bond buys

    by kmknier Apr 8, 2016 3:29 PM
    cheapstkbuyer cheapstkbuyer Apr 10, 2016 5:14 PM Flag

    Do you know if any seniority difference between the notes EIG bought vs the ones they issued publicly? Equal standing?

BBEP
0.3301-0.0348(-9.54%)Apr 29 4:00 PMEDT