In addition to your appropriate comments, the preferred distributions would become accumulative if Breitburn suspended them. So what they saved by not paying the preferred distribution would increase their liability by an equal amount. They would be creating a bad reputation for no gain. Also, what has appeared to slip under the radar to most investors, is that Breitburn recently donated $1.2 million to improve educational opportunities for disadvantage children in the Florida areas where their wells are located. I doubt they would be making such a generous donation at this time if they were concerned about cash.
"There is nothing they can do now." SA can start buying up US oil producing companies and taking their production off-line...Which is the way they should have played this in the first place. But now, with oil so cheap, they can pay a lot less for them. That is until Uncle Sam steps in.
You hit the peg square in the head, g_square. Don't start buying till Hal starts buying with his own money. He will when he thinks the timing is right...He always has. Buying now, you're saying you know more about BBEP's future than the CEO of the company does. That's just not good investment strategy IMHO.
The preferred distribution can't be cut only postponed unless bankruptcy. I think BBEP has too much oil and NG reserve, credit access and hedges for that to happen. I look for them to do a joint venture with someone where the other company puts up most of the cash before the end of the year giving them additional revenue. IMO they can hold out longer than SA can.
It was on CNBC. Bill Griffet (sp) was talking to one of the NYSE floor traders and mentioned it. The floor trader responded like he already knew it. Griffet went on to say that SA needs $105.00/ bl to address SA's internal demands. The discussion took place around the time the markets closed.
I'm not in the league with JVRAT on predicting ALDW's quarterly distribution but since the crack spread averaged 10% higher for the quarter, I'm estimating $0.78/ shr. distributing.payment for the 2nd qtr.
The last posting was March 31, 2015
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