BKEPP - Blueknight's Stable Business May Re-Rate After Oil Asset Sale

• There's no oil exposure left in Blueknight Energy. They have sold their oil assets at a sensible price.
• The remaining business is an attractive asphalt terminalling asset with take or pay contracts (averaging 6-year remaining terms).
• As such, Blueknight appears largely de-risked and a relatively attractive investment. Once this is understood, the units may re-rate.
• Even relatively small cost savings or margin improvements could benefit unit holders, an incremental $2M of free cash flow is worth $0.73/unit on a 15x multiple.
• Given asphalt is used primarily in roads, the company would be a likely beneficiary of higher U.S. infrastructure spend.

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