Author Topic: TOO - Teekay Offshore Partners L.P.  (Read 28635 times)

Steven B

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Re: TOO - Teekay Offshore Partners L.P.
« Reply #80 on: November 28, 2018, 12:47:20 PM »
Hmmm think I might've scared Seth away.

 Anyway, still think it's interesting but thanks Greg, I'll look at Tidewater. Also Heth, while I don't profess to know the thought process of the market, you either need to look at EV/EBITDA or P/FCF, none of which are quite as low as 1.1 times.


Gregmal

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Re: TOO - Teekay Offshore Partners L.P.
« Reply #81 on: November 28, 2018, 12:51:23 PM »
I've got a flier on some longer dated calls here, but ATM I think TDW warrants are a significantly more compelling way to play the space.

Thanks, is there a thread or write up on TDW that I can get up to speed?

Anyway, TOO's market cap is almost at 1.1X EBITDA now. Companies do not trade at 1.1X EBITDA unless they are distressed or highly leveraged, neither of which is TOO's case (Well, their 5X leverage is not low by the absolute standard, but still reasonable by industry standard, a little bit high on the comfort zone of 4~5X).  Is market worrying that they will have difficulty refinance their debt due in the next couple of years?

I forget where so I'll have to look for it, but it's been covered a few places. I think Third Ave had written about it in one of their letters as well.

heth247

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Re: TOO - Teekay Offshore Partners L.P.
« Reply #82 on: November 28, 2018, 01:01:34 PM »
Hmmm think I might've scared Seth away.

 Anyway, still think it's interesting but thanks Greg, I'll look at Tidewater. Also Heth, while I don't profess to know the thought process of the market, you either need to look at EV/EBITDA or P/FCF, none of which are quite as low as 1.1 times.

It all your fault, Steven.... just kidding. Yeah, hope Seth can come back and comment again :-)

Well, if we apply Seth's estimation of FCF of normalized ~$200MM a year, then this is at 3.5X FCF, which is cheap. I am trying to figure out why the share get to this low. What kind of distress the market is seeing? Do you see them having problem funding their 800MM*40%=320MM capex for the 6 new shuttle tanker over the next couple of years, while having 537MM debt mature in 2019, $349MM debt mature in 2020?  They should have about $400MM a year cash flow to deal with these, if those FPSO contracts can be extended.




longlake95

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Re: TOO - Teekay Offshore Partners L.P.
« Reply #83 on: November 28, 2018, 01:11:31 PM »
i thought that any funding issues were resolved by the Brookfield investment in TOO?

heth247

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Re: TOO - Teekay Offshore Partners L.P.
« Reply #84 on: November 28, 2018, 01:34:26 PM »
i thought that any funding issues were resolved by the Brookfield investment in TOO?

Those funding issues resolved were for the FPSO/FSO/Shuttle growth project 2015-2017, that were supposed to add $200MM incremental EBITDA.  But since then, they just ordered 6 new shuttle tankers, and said on the 3Q CC that they have total of 800MM capex to fund. My understanding is that 60% of it will be debt financing and 40% of it will be equity financing, which should be coming from their cash flow.  I consider these 6 new shuttle tankers as replacement not growth, since they have quite bit of old shuttles that will need to be retired in the next 5 years.
« Last Edit: November 28, 2018, 01:36:57 PM by heth247 »

heth247

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Re: TOO - Teekay Offshore Partners L.P.
« Reply #85 on: November 28, 2018, 10:28:58 PM »
I am trying to figure out if TOO can comfortably handle their debt due + CAPEX for the next two year. From their 20F, page 69, "Contractual Obligations and Contigencies" table, they have 853MM  (590MM secured debt + 51MM op lease +  209MM CAPEX) in 2018. Then they have 1068MM (422 secured + 421 bonds + 225 CAPEX) in 2019, but we know the 421MM unsecured bonds is already refi'ed and pushed to 2023 by the new 700MM 8.5%, so the net is 647MM ($422 secured debt + 225 CAPEX), which is much less than what they did in 2018. Then they have 630MM (350MM secured debt + 280 CAPEX) in 2020, which is less than 2019.  So all the debt due in the next two years are secured debt. Question to knowledgeable people, when banks decide to roll these secured debt, what is their consideration? Would they require large down pay? Should they be able to easily roll those secured debt in 2019 + 2020?

After reviewing this, now I can understand why they had to issue preferred-E in 2Q to help to handle all the obligations in 2018, and did the 700MM @ 8.5% to push out those unsecured bonds due in 2019. It is a bit of pain, but makes the road ahead much easier. Comments?

heth247

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Re: TOO - Teekay Offshore Partners L.P.
« Reply #86 on: December 12, 2018, 04:41:38 PM »
Is the Piranema field sold?  When I google "DBO energy Pirenema Field", the following popped up:

Double divestment deals for Petrobras | Upstream
https://www.upstreamonline.com/hardcopy/.../double-divestment-deals-for-petrobras
Nov 29, 2018 - According to Petrobras, the three fields have some identified ... the disposal of the mid-water Piranema field to newcomer DBO Energy, as well ...

 Double divestment deals for Petrobras
Brazil's Petrobras has reached a pair of deals worth a combined $823 million for the sale of a series of shallow-water and onshore fields, as part of its divestment strategy to raise up to $21 billion by the end of the year, writes Fabio

But I don't have access to the website. Anybody?

heth247

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Re: TOO - Teekay Offshore Partners L.P.
« Reply #87 on: December 27, 2018, 07:24:08 PM »
I thought this one is not an oil bet but it came down even harder than oil. And it does not bounce back when oil bounce back! Really cannot figure out why, except guessing that some funds are dumping it due to redemption? Even assume that their 3 FPSO + UMS fail to get the contract extension, it still does not deserve current price level this low.

chrispy

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Re: TOO - Teekay Offshore Partners L.P.
« Reply #88 on: December 28, 2018, 08:24:07 AM »
Tax loss selling may be happening too. Seems over sold. BBU has roughly followed its price movement too despite it being one of many holdings

heth247

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Re: TOO - Teekay Offshore Partners L.P.
« Reply #89 on: December 28, 2018, 05:21:20 PM »
Tax loss selling may be happening too. Seems over sold. BBU has roughly followed its price movement too despite it being one of many holdings

I get the tax loss selling in December, but who would have waited until Dec 20 or later to do it ...