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When a pipeline is typically "abandoned" and sold to a salvage company is it typically done because the line itself is no longer viable/useful and therefore basically retired??...perhaps due to age and or condition causing safety concerns??.. or is it a case of economics??...or liabilities??..or D) All of the above
If its a case that the pipeline was abandoned simply because it was no longer needed to transport product but still could function are there times they rehabilitate the line and bring them 'out of retirement' so to speak??
Its no secret Carroll & Co will have to come up with a major change in the contractual deal they had previously with GEL but that would also seemingly require how the plant currently functions. I.e. Do what you suggested in an earlier post -
Ditch the trucks and find a way to transport via pipeline.
FWIW- this link takes you to a Google satellite view with various pipeline overlays.
The town of Nixon itself is very near or on the Gonzales County line but the refinery is just across the line in Wilson County.
This google satellite view shows the refinery as Lazarus Energy which is the parent company but its really Blue Dolphin.
There is a pipeline that goes through the BDCO site as Carroll said in earlier press releases but I have no idea as to what that pipeline contains.
I also don't know exactly when this satellite view was taken but it does show what appear to be new tanks that were recently built I'm guessing before they were painted.
https://pvnpms.phmsa.dot.gov/PublicViewer/
Our discussions are all hypothetical of course and based on things we simply cannot verify ..but your descriptive analysis of refineries in general are all tremendously helpful when attempting to understand what kind of animal the Nixon facility most resembles. That in turn will help us grasp what kind of offers might be made if a refinery such as the BDCO were to be put on the block.
The Nixon Blue Dolphin plant sits on 56 acres and for what its worth an adjoining 50 acres is owned by the parent company of Blue Dolphin.
At this point those adjoining acres are not part of the valuation considerations because Blue Dolphin simply doesn't own them but I can't see how they wouldn't be part of a "deal" if the refinery had to be sold to settle their debt with GEL.
Those adjoining acres would make future expansions for someone interested in owning the refinery very doable. That may or may not mean anything material in our discussion but it does add to the mix of considerations.
Ok...so summarize these details.
If these components were added as planned would that increase the complexity index above and beyond a base topping unit?
For example if the plant rated a 1.0 on the complexity index (CI) before you knew these projects were possibly in the mix would it raise the CI??...to say a 1.2...or 1.3... or more?
"By bringing the naphtha stabilizer and depropanizer units back online and with further debottlenecking efforts, combined with the addition of more than 800,000 barrels of newly built storage tanks, we anticipate continued success with further expansion of the Nixon Facility."
In a word - WOW!
SIVB is Silicon Valleys' bank of choice.
SVB Financial Grp. (SIVB)
$220.01 up 27.64 (14.37%)
Volume: 347,940
It stands to reason it came on a day Google is up 7% and Amazon is up a whopping 9% and rising.
If there is pipeline infrastructure nearby, or rail infrastructure to use the Nixon unit intermediate to feed a downstream system, there might be something to salvage. Knocking out transportation-related margin hits might be a key.
Once again your insight is valuable and much appreciated here on the BDCO board.
My interest is of course because I have skin in this game and I admit I'm anxious to hear positive news. However at this point I have written off my investment as a total loss. It stings to be sure!
Losses are one thing..not learning something out of this to take with me on any future refinery type investments would be folly.
I'm enjoying the information and find it quite useful. thank you.
Marker:
Blue Dolphin Energy (BDCO)
$0.20 0.0 (0.00%)
Volume: 2,532
In the Valero example the expenditure to build a 70,000bpd topping unit is $350MM or $5,000 per barrel. For the 90,000bpd topping unit the cost to build comes out to be $4,444 per barrel.
The average expenditure between the two ADU's is $4,722 per barrel.
If we were to apply these numbers to the Nixon facility the costs to replace it would be $4,722 X 15,000bpd capacity = $70,830,000
Is this an apples to apples comparison?? Probably not because the Nixon plant is not brand new its got some miles on it...depreciation...so I honestly can't say. I don't have an MBA in finance from SMU but I know a guy who does. Perhaps he'll chime in. Another consideration is the smaller the plant the higher the expenditure per barrel to build. It may be more in the neighborhood of $5,500 per barrel to build a Nixon clone.
Another big unknown in these Valero examples is do these reported expenditures include the cost of new land it would require to build these ADU's on. ?? My assumption is it does not. I'm assuming they have space at the existing refinery site(s) to add these ADU's.
Therefore if I were to wag an estimate on the value of the Nixon plant I don't think the $70.8MM is an unplausible place to start.
Does this article give any clues to a possible range of valuation costs for an ADU? Or is it completely not applicable?
https://www.reuters.com/article/us-valero-energy-topper-startup/valero-starting-up-new-crude-topping-unit-at-tx-refinery-idUSKBN0TX2DX20151214
Thank you jmjjw for the insightful feedback.
You've provided a clearer picture of what the Nixon facility actually is. I knew the plant was very "basic" in its operational capabilities but perhaps not quite to the extent you just explained it to be.
A topping unit is the "front-end" of a complete refinery. It would be a tough call to invest in an asset sale for a topping unit, because the investment to drive it into a profitable, higher margin operation would be substantial.
Number of shares outstanding as of October 12, 2017:
10,818,371
Considering that Carroll controls 81% of that would leave a float of approx 2MM shares.
Marker:
Blue Dolphin Energy (BDCO)
$0.19 0.0 (0.00%)
Volume: 0
Marker:
Texas Pacific Land T (TPL)
$413.01 up 5.915 (1.45%)
Volume: 16,815
Marker:
Blue Dolphin Energy (BDCO)
$0.08 down -0.12 (-60.00%)
Volume: 348,691
*wow...the pps drop didn't stun me nearly as much as the volume. This screams somebody who once held a significant stake knows something brewing isn't good.
Net income for Q1 of 2017 was $907k. This would put them on track to outpace net income for 2016 at $3.1M
The Share Structure is unknown at this time.
Marker:
Ncal Bancorp (PC) (NCAL)
$0.66 unchanged 0.0 (0.00%)
Volume: 0
Marker:
Thor Industries, Inc (THO)
$129.07 up 1.95 (1.53%)
Volume: 720,339
Marker:
Atlantic Coast Finan (ACFC)
$8.65 up 0.04 (0.46%)
Volume: 4,287
Marker:
United American Bank (UABK)
$18.50 0.0 (0.00%)
Volume: 175
Marker:
Svb Financial Grp. (SIVB)
$189.10 up 1.84 (0.98%)
Volume: 427,711
Marker:
First Internet Banco (INBK)
$34.55 up 0.05 (0.14%)
Volume: 44,989
*Approaching a 5 year high.
Nothing public.
This gains attraction with each passing month. The ponzi scheme allegations by Kyle Bass & Co. have dissolved and appear to have been false ..meanwhile the loc's, which were substantial to the tune of $157M, have been steadily diminishing and should be nearing $8M or possibly less.
Those two items imo have turned the yellow light of caution into a green light of go.
Marker:
United Development F (UDFI)
$3.80 up 0.11 (2.98%)
Volume: 50,599
Agreed...I never said .07 was a good price to be in at. The problem is guys with a hundred bucks to spend looking for a sucker to flip it to have kept this inflated above sound investing reality.
That's a problem if you want to build a stake.
There inlies the answer perhaps. If it was a smaller sized community bank with a few branches in the Tehachapi area I can see why it commanded a low end buy out price. That region of So Cal is in kind of a 'no man's land'. There may also have been Directors with a stake who wanted out sooner rather than later as well ?? hard to say. But I do know had that been located more towards the northern Calif region, especially within the influence of San Francisco\Silicon Valley, I can say with near certainty the buy out price would have commanded a nice premium.
I think FSWA can command a nice premium in a buy out situation. It too is just a small community bank but unlike the Tehachapi bank it sits in a very prime desirable location. Banks are like real estate its all about location..location..location...and FSWA has it. Just don't over pay.
Good luck.
Chevy
Sorry for the loss.
1X is on the lowest end of the average buyout.
Unfortunately not all banks are created equal. For example geographic footprint of the selling bank is not considered in calculating book value but it plays a huge role in determining whether or not the selling bank can command a hefty premium.
What state(s) or region(s) was this bank operating in?
What that bank official told you was completely right. Market value and book value are two different animals.
D & O of either the selling or the buying institution can at a minimum be heavily fined or at a maximum pay steep penalties and do jail time if the transaction varies too much from book value.
Small banks today on average are acquired for between 1 X BV ~ 1.7 X BV. Anything outside of that higher or lower will land D & O in hot water.
Mr. Market doesn't set bank acquisition prices. Value does.
Marker:
First Sound Bank (se (FSWA)
0.071 0.0 (0.00%)
Volume: 0
Current Report Filing (8-k)
Date of report (Date of earliest event reported): September 26, 2017
Blue Dolphin Energy Company
Item 1.01 Entry into a Material Definitive Agreement.
As previously disclosed, on August 11, 2017, Lazarus Energy, LLC (“LE”), a wholly owned subsidiary of Blue Dolphin Energy Company (“Blue Dolphin”), received an unfavorable outcome in the arbitration proceedings between LE and GEL Tex Marketing, LLC (“GEL”), an affiliate of Genesis Energy, LP. The arbitrator’s final award (the “Final Award”) denied all of LE’s claims against GEL and granted substantially all of the relief requested by GEL in its counterclaims. Among other matters, the Final Award awarded damages, legal and administrative fees, and court costs payable to GEL by LE in the aggregate sum of approximately $31.3 million.
A hearing on confirmation of the Final Award was scheduled to occur on September 18, 2017 in state district court in Harris County, Texas. Prior to the scheduled hearing, LE and GEL jointly notified the court that the hearing would be continued for a period of no more than 90 days after September 18, 2017 (the “Continuance Period”), in order to facilitate settlement discussions between the parties.
On September 26, 2017, LE and Blue Dolphin, together with their affiliates Lazarus Energy Holdings, LLC and Jonathan Carroll (collectively, the “Lazarus Parties”), entered into a Letter Agreement with GEL, effective September 18, 2017 (the “Letter Agreement”), confirming the par. ies’ agreement to the continuation of the confirmation hearing during the Continuance Period, subject to the terms of the Letter Agreement. The Letter Agreement includes the following terms, among others:
- The Lazarus Parties and GEL agreed to work together in good faith during the Continuance Period to negotiate and document the terms of a settlement and payment structure to resolve all of their disputes and obligations, including those related to and arising from the Final Award.
- LE agreed to pay GEL approximately $3.6 million, consisting of a cash payment and disbursement of certain funds held in the court’s registry, which amount will be applied to reduce the balance of the Final Award.
- The Lazarus Parties waived all objections to confirmation of the Final Award, but GEL agreed that it would not take any action to confirm, enforce, collect, execute upon, perfect or exercise any remedies regarding that waiver or the Final Award prior to the earlier of (1) the expiration of the Continuance Period without the parties’ agreeing to a settlement and (2) termination of the Letter Agreement.
- The Lazarus Parties agreed that, without GEL’s consent, they would not, subject to certain agreed-upon exceptions, (1) incur debt, (2) create liens on their assets, (3) sell, lease or otherwise transfer assets outside the ordinary course of business, (4) engage in transactions with affiliates or amend the terms of existing affiliate transactions, (5) become party to bankruptcy, reorganization, liquidation or similar proceedings, (6) make investments in, acquire material assets of or merge or consolidate with any other entity, (7) allow changes to their equity ownership structures, or (8) amend their debt instruments or organizational documents.
- GEL may terminate the Letter Agreement on the 45 th day of the Continuance Period, or November 1, 2017, if it determines, in its sole discretion, that settlement discussions between the parties are not advancing to an acceptable resolution.
Blue Dolphin can provide no assurance as to whether negotiations with GEL will result in a settlement or as to the potential terms of any such settlement.
https://ih.advfn.com/p.php?pid=nmona&article=75761566
---------------
Marker:
Blue Dolphin Energy (BDCO)
0.28 0.0 (0.00%)
Volume: 1,000
Marker:
Gastar Exploration I (GST-B)
$19.021 up 0.871 (4.80%)
Volume: 4,450
Marker:
Gastar Exploration 8 (GST-A)
$17.00 up 1.35 (8.63%)
Volume: 7,214
Marker:
Blue Dolphin Energy (BDCO)
$0.20 down -0.2 (-50.00%)
Volume: 3,900
*Houston storm no doubt effecting the administrative operations of Blue Dolphin.
Down into the abyss....
Marker:
Blue Dolphin Energy (BDCO)
$0.30 down -0.25 (-45.45%)
Volume: 19,605
*The question is will Carroll & Co sit down with GEL and hammer out a deal both can live with?? It makes no sense for GEL to do a kamikaze like strike on BDCO's refinery and send this to BK. It's hard to have faith in the same parties that got us here in the first place. We'll see.
Marker:
Texas Pacific Land T (TPL)
$381.35 up 10.01 (2.70%)
Volume: 28,105
Bankruptcy would actually hurt all parties including all creditors.
Option 2 requires making a "deal, deal" since BDCO cannot pay.
BK or debt for equity stake?
Marker:
Blue Dolphin Energy (BDCO)
$0.55 down -1.1 (-66.67%)
Volume: 12,589
Catastrophic day for BDCO.
Somebody knows something..and whatever it is is not good.
Low for the day was an unbelievable .05 cents per share.
Marker:
Blue Dolphin Energy (BDCO)
$0.55 down -1.1 (-66.67%)
Volume: 12,589
Filing Type NT 10-Q (SEC's EDGAR System)
Company United Development Funding IV (Grapevine, TX)
Event Date 6/30/2017
Filing Date 8/10/2017
Abstract Registrant filed a notification of delinquency filing to report that its Form 10-Q will not be filed in a timely manner due to the lack of final financials for the quarter ended June 30.
Marker;
United Development F (UDFI)
$3.15 0.0 (0.00%)
Volume: 8,296
Marker:
Fairmount Santrol Ho (FMSA)
$2.59 down -0.26 (9.12%)
Volume: 12,678,570
*Price of WTI Crude is currently $48.96 @ bbl.
The total number of shares of common stock, par value $0.001 per share, outstanding as of March 11, 2015 was 80,195,695
The total number of shares of common stock, par value $0.001 per share, outstanding as of August 1, 2017 was 213,947,634.
This means over the last 29 months GST has increased the number of shares on the street by a whopping 133,751,939 MILLION shares.
Can you spell 'dilution'?? Think flood!
Does this matter? Of course it does. The GST equity 'pie' was sliced up into 133 million more pieces.
Dilution matters to an investor. Day traders? not so much.
Marker:
Gastar Exploration (GST)
$0.6502 up 0.0431 (7.10%)
Volume: 1,052,205
Marker;
Gastar Exploration 8 (GST-A)
$12.1 up 0.38 (3.24%)
Volume: 19,432 @ 10:39:26 AM EDT ET
*dividends for August 2017 will not be paid.
**price of WTI crude is currently $48.71 @ bbl.
Marker;
Gastar Exploration I (GST-B)
$15.21 up 1.01 (7.11%)
Volume: 17,485 @ 10:34:17 AM EDT ET
*dividends will not be paid for the month of August 2017.
**price of WTI crude is currently $48.71 @ bbl.