USD Partners LP (USDP): SWOT Analysis [Nov-2025 Updated]

You're looking at USD Partners LP (USDP) and need to understand the fundemental shift: this is no longer an operating midstream company, but an entity in the final stages of dissolution following the successful sale of its last major asset, the Hardisty Rail Terminal, in April 2025. The critical takeaway is that common unitholders will not receive any proceeds from that sale, and the unit price reflects this finality, having plummeted 90.40% over the last year to a market capitalization of only around $243.18 K as of late 2025. Your focus shouldn't be on growth strategy, but on the risks and opportunities inherent in a controlled wind-down-like resolving the outstanding revolving credit facility debt and managing the uncertainty of final tax implications.

USD Partners LP (USDP) - SWOT Analysis: Strengths

Successful Sale of the Final Operating Asset

The successful sale of the Hardisty Rail Terminal in April 2025 is a major strength, as it provides a clean exit path and fulfills a key condition of the forbearance agreement with lenders. This move, which effectively disposes of the Partnership's last operating asset, provides a final, concrete valuation for a core piece of infrastructure.

The terminal was acquired by Strathcona Resources Ltd. for an agreed-upon price of CAD 45 million (Canadian dollars) in January 2025, with the transaction closing in April 2025. This sale was a necessary and well-executed step in the strategic wind-down process, converting a physical asset into cash to address the outstanding debt obligations.

Expectation of Revolving Credit Facility Debt Write-Off

A critical strength in this dissolution scenario is the expectation that the lenders will terminate the revolving credit facility and write off the remaining debt balance. This is the defintely the most significant financial benefit for the Partnership's wind-down.

Here's the quick math on the debt relief: As of March 10, 2025, the Partnership had $185.4 million outstanding under the Credit Agreement. The expectation of a write-off for this substantial amount, following the sale of the Hardisty Rail Terminal, dramatically simplifies the balance sheet and paves the way for a swift dissolution, avoiding a protracted bankruptcy process.

Historically Generated Cash Flow from Stable, Fee-Based Take-or-Pay Contracts

The Partnership's historical business model was built on a foundation of stable, predictable cash flow, which is a strength even in dissolution because it provided the necessary liquidity to manage the wind-down process up to the final sale. The operating cash flows were generated from multi-year, take-or-pay contracts.

This fee-based structure meant customers, primarily investment grade companies like major integrated oil companies and refiners, committed to paying a minimum monthly fee regardless of the actual volume of product shipped. This contract stability provided a financial cushion during periods of market volatility and asset divestiture.

• Cash flow source: Multi-year, fee-based take-or-pay contracts.
• Customer quality: Primarily investment grade counterparties.
• Benefit: Provided revenue stability to navigate a complex restructuring.

General Partner (GP) and Sponsor (USD Group LLC) Support in the Dissolution Process

The high level of alignment and support from the General Partner (GP), USD Partners GP LLC, and its sponsor, USD Group LLC, is a major strength that ensures the strategic wind-down is executed efficiently. This is not a hostile situation; the controlling interest is actively facilitating the process.

The General Partner and its affiliates held a significant majority of the voting power, owning 51.2% of the limited partnership interests entitled to vote as of August 1, 2024. This majority control ensures that key decisions, such as the sale of the Hardisty Rail Terminal and the subsequent dissolution plan, are approved and executed without internal dissent or delays from unitholders.

USD Partners LP (USDP) - SWOT Analysis: Weaknesses

No remaining operating assets following the April 2025 terminal sale.

The most significant and immediate weakness is that USD Partners LP is now a shell of its former self, having sold off its core business. The Partnership completed the sale of the Hardisty Rail Terminal, which was explicitly noted as its last remaining operating asset, on April 10, 2025. This was not a strategic divestiture for growth; it was a forced sale by lenders under a forbearance agreement to address outstanding debt. The company has since stated its intention to take steps to wind down or dissolve following the completion of this process.

You are essentially investing in an entity in the final stages of a distressed liquidation, not an operating business. There is no revenue-generating engine left, so future cash flow analysis (like a Discounted Cash Flow or DCF) is functionally moot. This is a terminal situation, defintely not a turnaround story.

Delisted from the NYSE in late 2023, now trading on the OTC market.

The company's market credibility took a major hit when it was delisted from the New York Stock Exchange (NYSE). The NYSE suspended trading and commenced delisting proceedings effective November 16, 2023, because the Partnership failed to maintain the required minimum average market capitalization of at least $15 million over a consecutive 30 trading-day period. This move automatically restricts the pool of potential investors, as many institutional funds and platforms cannot or will not trade over-the-counter (OTC) securities.

Now trading on the OTC Pink Market under the ticker USDP, the units face a significant reduction in liquidity, transparency, and reporting requirements compared to a major exchange. Less liquidity is a huge problem. This makes it harder to buy or sell units quickly without impacting the price, which is a major risk for any remaining investor.

Common unitholders will not receive any proceeds from the Hardisty Terminal sale.

The financial reality of the Hardisty Rail Terminal sale is a complete loss for common unitholders. The proceeds from the sale were directed entirely toward satisfying the Partnership's revolving credit facility (debt). The Partnership expected to still have substantial borrowings outstanding even after applying the sale proceeds, with the lenders agreeing to terminate the credit facility and write off the remaining debt balance.

Here's the quick math on the capital structure: Senior Lenders get paid first, then other creditors, and only then does any residual value go to the common equity (unitholders). Because the sale proceeds did not even cover the full debt-requiring a debt write-off-the common unitholders are left with nothing. This is the definition of equity being wiped out in a distressed scenario.

• Sale proceeds: Used to pay down senior debt.
• Remaining debt: Expected to be written off by lenders.
• Common unitholder distribution: $0.00 per unit.

Market capitalization is extremely low, around $243.18 K as of late 2025.

The market capitalization is a stark indicator of the market's valuation of the Partnership's residual entity. As of late 2025, the market cap is hovering around $243.18 K (thousand). To put that into perspective, this is a fraction of the $15 million minimum market cap that triggered the NYSE delisting back in 2023.

This ultra-low valuation reflects the market consensus that the common units represent little to no residual value after the debt obligations are addressed and the company winds down. It's a micro-cap stock with a micro-cap problem: an effective loss of all underlying assets and a plan for dissolution. The stock price reflects this, trading at a negligible amount per unit.

USD Partners LP (USDP) - SWOT Analysis: Opportunities

Final termination of the revolving credit facility to resolve substantial outstanding debt.

The single biggest opportunity for USD Partners LP is the successful elimination of its substantial debt burden. The completion of the Hardisty Rail Terminal sale on April 10, 2025, was the final step required by the lenders under the Forbearance Agreement (a temporary agreement to stop creditors from exercising their rights after a default).

The critical opportunity here is that the lenders are expected to terminate the revolving credit facility and write off the remaining debt balance after the sale proceeds are applied. This event immediately removes the existential 'going concern' risk that plagued the Partnership throughout 2024 and early 2025. This is a massive balance sheet cleanup, effectively resetting the financial slate for the dissolution process.

Here's the quick math on the unitholder base that benefits from this clarity:

Expedited wind-down and dissolution to minimize ongoing administrative and legal costs.

With the last operating asset sold and the debt expected to be written off, the Partnership can move to an expedited wind-down and dissolution. This is a clear, actionable path to stop the cash drain from ongoing overhead.

The Forbearance Agreement already pushed the Partnership to adhere to a strict operating budget, and the previous restructuring efforts aimed to reduce annual expenses to approximately $3 million per year. The dissolution process itself, while incurring final legal fees, will ultimately eliminate all future general and administrative (G&A) expenses, saving the unitholders from a slow, costly corporate death. The quicker the dissolution, the more value preserved.

• Stop all future G&A costs, which were already targeted for reduction.
• Avoid prolonged, complex legal battles by accepting the lender-mandated debt write-off.
• Shift from an operating entity to a liquidating entity, simplifying financial reporting.

Potential for the sponsor to focus resources on new, more defintely viable ventures.

The sponsor, US Development Group, LLC (USD Group LLC), which owns the General Partner, can now pivot its full attention and capital away from the failed Master Limited Partnership (MLP) structure of USD Partners LP. This frees up management time and financial resources for the sponsor's other, more promising assets.

A key asset not included in the USD Partners LP sales is the Diluent Recovery Unit (DRU), which is jointly owned by USD Group LLC and Gibson Energy Inc. This DRU is a strategic, ESG-friendly solution for Western Canada's crude egress. The dissolution of USD Partners LP allows USD Group LLC to:

• Direct capital toward the growth and expansion of the DRU system.
• Focus on developing new, innovative logistics terminals.
• Re-establish a strong credit profile separate from the dissolved MLP's issues.

This is a classic case of corporate surgery: cutting off a non-viable limb allows the rest of the body to thrive.

Providing tax clarity to unitholders through the final dissolution process.

A major headache for unitholders of an MLP is the complexity of the Schedule K-1 (Form 1065) tax reporting. The final dissolution, while potentially triggering a taxable event, provides definitive tax closure.

For the unitholder base, the Partnership already provided clear guidance in early 2025. For non-U.S. investors, the Qualified Notice mandates that brokers treat 100.0% of distributions and sale proceeds as income effectively connected with a U.S. trade or business for withholding purposes. The final liquidation will provide the last K-1, effectively ending the complex tax reporting requirement for this investment. The 2024 tax packages, which include the Schedule K-1, were made available in mid-March 2025, setting the stage for the final tax year reporting.

USD Partners LP (USDP) - SWOT Analysis: Threats

Extreme unit price volatility, with a 90.40% decrease over the last year as of late 2025.

The most immediate and material threat to common unitholders is the sheer collapse in unit value, reflecting the market's view on the Partnership's terminal fate. The unit price has experienced extreme volatility, plummeting from an approximate value of $0.06 in November 2024 to around $0.01 per unit as of November 2025. This represents a catastrophic decline of approximately 90.40% over the last year, effectively wiping out nearly all common equity value. This is not just a stock drop; it is a clear signal of imminent equity cancellation.

Here's the quick math on the price collapse, illustrating the high-risk nature of the over-the-counter (OTC) trading environment:

The market has already priced in a near-total loss. Still, the remaining volatility means even the final penny value is subject to further risk, with the 52-week low hitting $0.0039. You're trading on speculation, not underlying business fundamentals.

No future distributions to common unitholders are expected.

For a Master Limited Partnership (MLP), the cessation of cash distributions is the death knell. Following the sale of the Hardisty Rail Terminal, the Partnership's final operating asset, in April 2025, the proceeds were directed toward debt repayment as required by the forbearance agreement with lenders. The core threat here is simple: there are no remaining operating assets to generate cash flow, and there were no proceeds from the final asset sale allocated for common unitholders. Consequently, the Partnership has explicitly stated it will not be making any future distributions to common unitholders.

This reality confirms the common units have transitioned from an income-generating investment vehicle to a pure liquidation stub with a zero-cash-flow expectation. The lack of distributions is a direct result of the debt-driven wind-down process.

Uncertainty regarding the final tax implications for common unitholders.

The most complex and potentially painful threat for unitholders is the tax fallout, specifically the risk of Cancellation of Debt Income (CODI), often referred to as phantom income. Since the lenders are expected to terminate the revolving credit facility and write off the remaining debt balance after the final asset sale, the Partnership will realize a significant amount of CODI.

Here is the critical mechanism of this tax risk:

• Taxable Income, No Cash: CODI is a form of taxable income that must be allocated to unitholders on their final Schedule K-1 (Form 1065), even though the unitholders receive no cash distribution to cover the resulting tax liability.
• Solvent Partner Risk: If you are a solvent unitholder, you will generally be taxed on your allocable share of CODI, which could create a substantial, immediate tax bill-a tax on an investment that has already lost over 90% of its value.
• Basis Adjustment: The CODI can increase a partner's basis, but the immediate tax burden is the primary concern, especially for those who bought units at a higher price.

Honestly, the tax liability arising from CODI could easily exceed the value of a unitholder's remaining investment.

Risk of unforeseen liabilities or costs arising during the formal dissolution process.

The formal dissolution of a Master Limited Partnership (MLP) is a complex, multi-year legal and administrative undertaking, not a simple flip of a switch. Even with the final asset sold, the Partnership is exposed to residual risks and unforeseen costs that could further erode any remaining value before the final wind-down.

These potential costs and liabilities include:

• Legal and Administrative Fees: The winding-down process requires significant legal, accounting, and administrative support. For context, the general and administrative fees paid to USD Group, LLC under the Omnibus Agreement were $7.1 million in 2023 and $9.1 million in 2022. While these were operating costs, they illustrate the magnitude of ongoing administrative expenses that must be covered during the dissolution phase.
• Contingent Liabilities: Unknown or unquantified liabilities like environmental remediation claims, contract termination penalties, or litigation costs could surface during the final stages of dissolution.
• Bankruptcy Risk: If the wind-down process hits a snag, the Partnership may be forced into a bankruptcy proceeding, which would involve substantial additional costs and would likely result in the cancellation of common units, leading to a limited, if any, recovery for unitholders.

What this estimate hides is the potential for a single, large environmental claim to consume all remaining cash, leaving nothing left for common equity. Finance: track all professional fees related to the wind-down weekly.