Looked at BDCO a little closer. I have only shorted very small positions on it so far and haven't looked at it much.

So looking closer at BDCO since there are still shares to short at my broker and was thinking of shorting more, found a few things that make me not want to short more and probably cover the small short positon. There's probably better stuff to short out there.

Their small interest in the Sumatra deal is producing and did about 2/3 of their revenues Q4 so it is a revenue producer right off (I believe BDCO has the right to buy the remaining 90%+ with stock deal but didn't look at specific terms). Being able to potentially turn a profit in Q1 leads me to not want to be short. There's worse stuff out there IMO.

BDCO's overhead costs are pretty light so the jump in oil prices will help drive further revenues from Sumatra. Plus their pipeline ops saw strong improvement YOY (W&T offshore and Maritech).

They had a $2 mill note payable that was uncollected from Lazarus and was being pursued thru court. Looked like about $500K of that settled but BDCO ended up acquiring a piece of former Lazarus property (I believe was collateralized by the note) after it went to auction and din't find a worthy bidder. Probably not worth much and there's still a sizeable amount uncollected on that debt. Not sure if BDCO has fully expensed it but I'm guessing they may not get much out of it.

My main thought is this Sumatra interest is tricky to value and assuming production from there is similar to last Q, they could turn profitable on higher oil prices if their pipeline infrastructure sustains its better YOY levels too..

So I'll probably be covering my small short on Monday. It is somewhat overextended but if they made a good deal to sell their pipeline ops that could be a catalyst for higher prices and used that cash to fund the remaining Sumatra deal it is a 'who knows'.

So conclusion: I'll cover the BDCO short Monday on any light pullbacks even though technically it looks pretty extended.

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