If You Invested in Usd Partners Lp (USDP)

USD Partners LP (USDP) was a fee-based master limited partnership focused on midstream infrastructure and logistics for energy products. According to the Partnership’s own disclosures, it was formed in 2014 by US Development Group, LLC to acquire, develop and operate midstream infrastructure and complementary logistics solutions for crude oil, biofuels and other energy-related products. Over its operating life, USD Partners LP generated substantially all of its operating cash flows from multi-year, take-or-pay contracts with primarily investment grade customers, including major integrated oil companies, refiners and marketers.

The Partnership’s business model centered on contracted logistics services rather than commodity price exposure. Its disclosures describe a focus on multi-year, take-or-pay agreements, under which customers committed to pay for capacity over a defined term. This structure supported predictable cash flows tied to services such as terminal access and related logistics, rather than direct participation in crude oil or biofuels price movements.

USD Partners LP reported that its operations included railcar loading, storage and other related logistics services. In addition, the Partnership provided customers with leased railcars and fleet services to facilitate the transportation of liquid hydrocarbons and, in some disclosures, biofuels by rail. These activities placed the Partnership within the broader midstream and logistics segment of the energy value chain, connecting production areas and demand centers through rail-based transportation and terminal infrastructure.

Historical assets and terminal network

In its public statements, USD Partners LP identified its principal assets as a network of crude oil terminals that facilitated the transportation of heavy crude oil from Western Canada to key demand centers across North America. The Partnership’s current operations, as described in earlier disclosures, included railcar loading, storage and related logistics services at these terminals, alongside leased railcars and fleet services that supported the movement of liquid hydrocarbons and biofuels by rail.

Among its assets, the Partnership highlighted the Hardisty Rail Terminal, which it described as underpinned by a long-term take-or-pay contract to load DRU volumes with an investment grade customer. The DRU associated with these volumes is owned jointly by Gibson Energy Inc. and US Development Group, LLC, the owner of the Partnership’s general partner, and was noted as not being part of the terminal sale process described in later corporate updates. The Partnership also disclosed the Stroud rail terminal as part of its asset base, which was subsequently sold by a wholly owned subsidiary for cash consideration, with net proceeds used to repay borrowings under its revolving credit agreement and pay transaction expenses.

Credit facility, forbearance and asset sales

USD Partners LP’s later-stage disclosures describe a period of restructuring centered on its revolving credit facility. The Partnership entered into a forbearance agreement with the lenders and administrative agent under its existing credit agreement. Under this agreement, and subject to specified terms and conditions, the lenders agreed to forbear from exercising certain rights and remedies arising from events of default and prospective events of default related to the Partnership’s failure to satisfy milestones under the credit agreement and related loan documents.

As part of the forbearance framework, the lenders required the Partnership to complete the sale of the Hardisty Rail Terminal by a specified date. The Partnership stated that the Hardisty Rail Terminal was subject to an extensive and broadly marketed sale process conducted by an independent investment bank approved by the lenders. The sale was approved on behalf of the board of directors by an independent director functioning as Chief Restructuring Officer, as well as by the holder of a majority of the Partnership’s outstanding common units, in accordance with the forbearance agreement.

The Partnership also disclosed the sale of the Stroud rail terminal by a wholly owned subsidiary. The net proceeds from that transaction were applied to repay borrowings under the revolving credit agreement and to cover transaction expenses. These steps formed part of a broader process through which the Partnership sold substantially all of its assets while addressing its outstanding indebtedness.

Wind-down, cessation of operations and trading status

In subsequent communications, USD Partners LP reported that it completed the sale of the Hardisty Rail Terminal, its last remaining operating asset. Following this sale, the Partnership stated that it had sold substantially all of its assets and expected its lenders to terminate the revolving credit facility and write off the remaining debt balance. The Partnership further indicated that, after these steps, it intended to take actions to wind down or dissolve.

A later update stated that the Partnership sold its last remaining operating asset, ceased operations and announced its intention to cancel the equity of the Partnership following termination of its credit facility. The Partnership reported that it had taken affirmative steps to wind down and liquidate and had submitted a request to the Financial Industry Regulatory Authority (FINRA) to halt trading of the remaining Partnership equity. It also stated that its unitholders would not receive any payments or distributions from the Partnership upon its wind down. These disclosures indicate that USD Partners LP moved from an operating midstream master limited partnership into a liquidation and wind-down phase, with trading in its equity expected to be halted upon completion of the process described.

Tax considerations disclosed by the Partnership

In connection with its wind-down, USD Partners LP advised that, because it was not able to repay its remaining indebtedness in full, it might recognize cancellation of indebtedness income (CODI) for U.S. federal and state income tax purposes in an amount exceeding the net taxable losses recognized in connection with the sale of its last remaining asset. The Partnership stated that this CODI would be allocated to its unitholders and might result in a tax obligation in excess of the value of the common units held by a unitholder. It emphasized that the exact tax impacts would vary by investor and that it was not providing financial or tax advice, instead advising investors to consult their own financial and tax advisors. The Partnership also indicated that it expected to provide a final Schedule K-1 (Form 1065) to unitholders in connection with this process.

Business model and customer base (historical)

Historically, USD Partners LP described itself as a fee-based, growth-oriented master limited partnership focused on midstream infrastructure and complementary logistics solutions for crude oil, biofuels and other energy-related products. Its public disclosures emphasized that substantially all operating cash flows were generated from multi-year, take-or-pay contracts with primarily investment grade customers. These customers included major integrated oil companies, refiners and marketers.

The Partnership’s services included railcar loading, storage and other related logistics services, as well as leased railcars and fleet services to facilitate the transportation of liquid hydrocarbons and, in certain disclosures, biofuels by rail. By focusing on take-or-pay contracts with investment grade counterparties, the Partnership sought to align its revenue profile with contracted capacity and logistics services rather than direct commodity exposure.

Status as a former operating partnership

Based on the Partnership’s own statements, USD Partners LP has sold its last remaining operating asset, ceased operations and taken steps to wind down and liquidate, including requesting a halt to trading of its equity and announcing its intention to cancel its equity following termination of its credit facility. For users researching the USDP symbol, this context means that the Partnership is best understood as a former operator of midstream and logistics assets for crude oil, biofuels and other energy-related products, rather than an ongoing operating entity.

Key points for investors and researchers

• USD Partners LP was formed in 2014 by US Development Group, LLC as a fee-based master limited partnership focused on midstream infrastructure and logistics for crude oil, biofuels and other energy-related products.
• The Partnership generated substantially all of its operating cash flows from multi-year, take-or-pay contracts with primarily investment grade customers, including major integrated oil companies, refiners and marketers.
• Its operations historically included railcar loading, storage and related logistics services, along with leased railcars and fleet services for the transportation of liquid hydrocarbons and, in some disclosures, biofuels by rail.
• Principal assets included a network of crude oil terminals facilitating the transportation of heavy crude oil from Western Canada to demand centers across North America, including the Hardisty Rail Terminal and the Stroud rail terminal.
• Through a forbearance agreement and subsequent asset sales, the Partnership sold substantially all of its assets, applied proceeds toward its revolving credit facility and moved into a wind-down and liquidation process.
• The Partnership disclosed that unitholders would not receive payments or distributions upon wind down and that CODI could create tax obligations for unitholders, advising investors to consult their own financial and tax advisors.