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Breitburn Energy Partners L.P. Message Board

nosweat82 22 posts  |  Last Activity: Feb 10, 2015 5:14 PM Member since: Mar 23, 2010
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  • Last year on February 7, Breitburn had a news release that they would report 2103 year results on February 27, 2014. Since this is already the tenth and no similar news release date for 2014 results has been announced, one can only wonder if there is some significant reason for the delay. I’m guessing that there is.

  • Jvrat, again a nice prediction on ALDW’s quarterly distribution. With all the volatility, drop in oil and its affect on stock price, your estimate was amazingly close. Appreciate your giving the board the quarterly results of your distribution model. Hope to see your prediction for the first quarter, 2015 later this quarter.

  • Reply to

    Good News ?

    by mdh81471 Jan 15, 2015 8:33 PM
    nosweat82 nosweat82 Jan 19, 2015 7:54 AM Flag

    "Free market." What part of OPEC's cartel, trying to maintain a monopoly on oil market supply and predatory pricing do you consider "free market?"

  • nosweat82 nosweat82 Jan 13, 2015 9:41 AM Flag

    Money, I just think, given a choice of options, the Government will choose the one that generates the most money for itself.

  • nosweat82 nosweat82 Jan 12, 2015 5:07 PM Flag

    As always, money, appreciate your comments and chart info on IV. We certainly do live in interesting times.

  • Reply to

    I suspect the bottom is in for Breitburn Energy

    by wsd0707 Jan 8, 2015 12:46 PM
    nosweat82 nosweat82 Jan 9, 2015 11:50 PM Flag

    The OBV suggests BBEP will go lower.

  • One of the interesting questions is, “How does the price war in oil end?” If you can come up with the correct scenario for the ending there is the potential for making considerable income and/or avoiding considerable losses. I don’t have a crystal ball but I can identify a number of premises that I feel comfortable stating:
    1. The Saudis, Kuwait and the UAE will not change their tactics unless forced to do so. They will continue to pump oil beyond global demand for as long as it takes to keep prices low and force other producers out of business, particularly North American drillers and producers. Only then, when they once again control the market, will allow prices to rise. Left alone, this will take considerable time—probably at least 18 months.
    2. So if this is allowed to run its course, how does it play out in the US? Well, a lot of smaller and highly-leveraged E&P companies will go bankrupted. Billions of dollars in loans will be reneged on, creating a banking crisis of unknown proportions including a shut down of loans to other industries and individuals
    Massive layoffs in the oil industry. Revenue losses for states that depend on oil for revenue. Loss of the drive for US independence from foreign oil. A virtual shut down of the effort to develop alternate sources of energy: solar, wind etc. (Who’s going to care about other kinds of energy when oil is cheaper?)
    3. On the world stage: Bond defaults, currency inflation and riots in countries whose primary source of national income is from oil exports. (Venezuela, Nigeria etc.)
    4. Obviously, this won’t be allowed to happen. Either the production or distribution of oil form SA, Kuwait and/or UAE will be disrupted by means unknown or some other action will be taken to reduce the supply of oil to below-demand levels. Also I believe Rahm Emanuel’s philosophy will come into play. “You never let a serious crisis go to waste.”

  • 5. In order to protect the national interests, (and address the banking, States’, major oil companies’, and alternate-energy interests), the Government will push aside the free-market forces and inject themselves into the “solution.” They will put an import tax on foreign oil (outside North America) causing North American oil to raise up to profitable levels again. (“Profitable” yet to be determined by the Government). They will take action to directly or indirectly guarantee loans made to the oil-producing industry. I envision these steps, and probably others, to be taken within the next 18 months thereby turning up oil stocks to higher levels than they are today. My only question is, “Will it be sooner or later?”

  • Reply to

    Result of 2014 Predictions

    by nosweat82 Jan 5, 2015 12:29 PM
    nosweat82 nosweat82 Jan 5, 2015 3:23 PM Flag

    I had the opportunity to have had business dealings with a number of top Saudi officials. They are very astute. For them to loose is to loose face, which, to them, is a fate worse than death. Aside from a disruption in their oil supply or distribution, they are in this to the end. I think this is going to go on much longer than most people expect with numerous unpleasant side affects.

  • Reply to

    Result of 2014 Predictions

    by nosweat82 Jan 5, 2015 12:29 PM
    nosweat82 nosweat82 Jan 5, 2015 3:02 PM Flag

    I’m not Nostradamus, but who goes to Las Vegas just to watch the roulette wheel spin?

  • Reply to

    Result of 2014 Predictions

    by nosweat82 Jan 5, 2015 12:29 PM
    nosweat82 nosweat82 Jan 5, 2015 2:54 PM Flag

    I said that about ROYT when the IPO first came out. What I didn't like about BBEP, and still don't, was that they lost their way a little over a year ago and decided that, "Bigger Was Better." That’s led to the production and debt problems they're facing now. It reminded me of Harding Lawrence and Braniff Airlines right after Deregulation of the airlines, and still does.

  • In light of my two successful predictions of the instrument offering (predicted Nov. 9, 2013) and the Whiting bolt-on acquisition (predicted Nov. 20, 2013), I decided to press my luck and offer my predictions for BBEP in 2014. Here was the post from Dec. 18, 2013:

    2014 BBEP Predictions

    1. Distribution will be increased in each of the 12 months throughout 2014.
    2. BBEP will do at least 2 new acquisition of primarily oil properties.
    3. A new type of debt offering will be introduced, possibly a preferred derivative.
    4. At some time during the year the price of BBEP stock will drop below $18.00/shr.
    5. Probably at least one of these predictions will turn out to be wrong.

    Here’s the grades and results on these predictions:
    1. Distribution will be increased in each of the 12 months throughout 2014.
    I call this a miss and it was corrected and posted in mid-January after extensive research and discussions with Breitburn. The covenants agreement with the GP does not allow BBEP to change the distribution during the quarter.

    2. BBEP will do at least 2 new acquisition of primarily oil properties.
    They did two: QRE and the bolt-on 3,700 net Antares Acreage in November.

    3. A new type of debt offering will be introduced, possibly a preferred derivative.
    They did a Series A preferred offering in May.

    4. At some time during the year the price of BBEP stock will drop below $18.00/shr.
    That didn’t happen until October 18, 2014. We all know the rest of the story.

    5. Probably at least one of these predictions will turn out to be wrong.
    I missed on #1.

    Maximum Possible Correct Predictions: 80%

    Actual Correct: 80%

    Which just goes to show that, “Even a hog will root up a diamond every once in a while.”
    What will happen in 2015 is tied to SA and oil prices. That’s anybody’s guess.

  • Reply to

    Jan 2017 Options Are Now Available

    by nosweat82 Dec 19, 2014 1:41 PM
    nosweat82 nosweat82 Dec 22, 2014 12:42 AM Flag

    Although the Jan. 2017 bid/ask spreads were wide, as you would expect with a new offering (+ a point), Interactive Brokers showed volume offers on both sides. So they are available for trade. Just not yet at an attractive price or maybe on the platforms you trade on.

  • This may open up some interesting trades for increasing returns, like buying the stock, collecting the distribution, and selling $10 calls against it.

  • The analyst at Robert A. Baird just dropped his target price for Breitburn from $18 to $7, which incidentally was the price it traded around the last two days. Wow, what great forecasting! Except, now it’s trading around $8 ½. So are we driving down the road by looking out the rear view mirror and calling it analysis & forecasting? I really appreciate these guys. They make six-figure salaries and ask totally irrelevant questions on the BBEP conference calls resulting in opportunities to get important information going absent . Their brokerage firms give their analysis only to “selected” people who are encouraged to invest their money in the stocks they recommend. If that’s not a case of “the blind leading the blind,” I don’t know what is.

  • Reply to

    BBEP Analysts Firms and My View Forward

    by nosweat82 Dec 12, 2014 12:41 PM
    nosweat82 nosweat82 Dec 12, 2014 9:55 PM Flag

    Bigbear, Thanks for the coverage ratios. I would have thought it would be lower than 0.93 at $55 oil. We already know that BBEP won’t cut the preferred distribution for January and I’m not sure a cut in normal distribution is locked in yet, either. I think a lot depends on what the price of oil does between now and the end of the year, Whatever the common share distribution is in January, they are contractually obligated to pay it in February and March as well. So there won’t likely be another surprise until April.

  • There are ten analysts firms that cover BBEP. Wunderlich is the first to cut the price target. They dropped it from $20.00 to $9.00. All the other nine still have price targets from $17.00 - $24.00. (Will someone please wake them up!). Breitburn was fortunate (read: “lucky”) to have squeezed their SO in just before the bottom fell out of the oil market. Otherwise they would be up against the borrowing cap now and, in my view, a distribution cut or elimination would be immediate instead of possible.
    I see little chance of changes coming from the lenders’ review in April. There’s an old saying on Wall Street, “If you owe me a million dollars, I got you. You owe me a billion dollars, you got me.” Assuming the status quo, I think the lenders will just ride out the down turn in oil with Breitburn. They may even increase the borrowing limit cap some to help tide BBEP over. After all, they can last with the current or slightly higher loan level a lot longer than many of the oil-producing countries outside of the mid-east can at current oil prices. If this goes on for very long, I think you will see the break up of OPEC, which Saudi Arabia doesn’t want as they loose their forum for oil domination. Also I don’t think Russia will stand by for long and watch their economy go down the drain. Disruption in the production and/or distribution of mid-east oil—either directly or covertly—is a likely possibility if the current melt down continues.
    There is no doubt that Breitburn is in a worse position than most E&P MLPS because of the extensive expansion and production problems starting with Whiting, which I’ve discussed in previous posts, but that doesn’t mean they’re in serious financial trouble. They’re just over extended at the time a perfect storm hit. They’ll survive and come back stronger than before and I wouldn’t be surprised to see Hal pull a rabbit out of the hat to help speed along their recovery
    In the meantime: hang in there. Things will eventually get better.

  • Reply to

    The conference

    by bicepsbunny Dec 9, 2014 11:57 AM
    nosweat82 nosweat82 Dec 9, 2014 12:39 PM Flag

    Jim was talking about 2015 budget preparation and I’m guessing this was one of the parameters they came up with for different levels of oil pricing. In that context, my guess is that it was related to income from operations only and did not include hedging profits.

  • Reply to

    The conference

    by bicepsbunny Dec 9, 2014 11:57 AM
    nosweat82 nosweat82 Dec 9, 2014 12:26 PM Flag

    I think they’re reluctant to be one of the first E&P MLPs to cut distribution. Agree, from a business perspective and overall future health of the company, it’s the best thing to do. They could come out of this situation in a very strong position if they have the guts to do it. I think they’ll try to hold on as long as possible, hoping oil will go back into, at least, the mid-80s and bail them out.

  • Reply to

    The conference

    by bicepsbunny Dec 9, 2014 11:57 AM
    nosweat82 nosweat82 Dec 9, 2014 12:10 PM Flag

    Here’s my take FWIW. Unlike in the past, I picked up very little in Jim’s presentation: “Everyone would be challenged to do acquisitions in this environment.” “CAPEX will come down next year, maybe to around $150M.” “Decline rate is a little higher—low to mid teens.” “For each $10 drop in the price of oil, EBITA for BBEP drops only 3-4%.” The only thing I could pick up on distribution (I think in answer to a question, which I could not hear and was not repeated from the podium) is if current conditions continue past 2016, “everyone in our group will be challenged.” Maybe someone with better ears than I have could enlighten us on what the question was and any other information of value. Thanks bicepsbunny for your input.

BBEP
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