What do you make of the recent announcements and the disappointing dividend announcement?

Expand full comment

Hey I missed your comment somehow. Not worried too much. Added a bit 2 weeks ago. It seems pretty likely remaining capacity of Hardisty will be filled up with 10 year contracts when other DRU terminals are ready. So that means a bit over $30m of FCF (including the $2m EBITDA of the biofuel terminal). Even if the other 2 oil terminals produce 0 ebitda.

They should communicate better how much each terminal earns, now it is only a % figure in one page of their presentation. My guess is that they are embarrassed by what a disaster their Casper terminal acquisition was, so they don't break it out.

With Stroud it seems that a pipeline connecting it to some part of Cushing is being built out and will finish Somewhere early Q1 2022. I think odds are decent that they will fill this up as well? And that Sponsor would not build that pipeline if there was no demand?

Plus WTI/WCS differential seems quite large currently, which is good.

Dissapointing that dividend has not been increased though, but wasn't really expecting that anyway.

Continue to think that downside is relatively limited at this valuation. And that sponsor has strong incentive to increase distributions above $1.6 per share in a sustainable way at some point over the next year or two.

Expand full comment

Thanks for the reply. Added as well on recent weakness.

Expand full comment