TERMS OF DEAL HAVE CHANGEDDUE TO MARKET VOLATILITY
On Sunday evening, BP issued a press release confirming its commitment to complete the sale of its Alaska business to Hilcorp, a deal first announced in August 2019. Subject to regulatory approvals, the parties expect to complete the transaction in June 2020.
Because of the recent oil price volatility, BP and Hilcorp have renegotiated the financial terms of the deal, BP said in the press release.
Under the revised agreement, the total amount of the sale remains unchanged at $5.6 billion, subject to customary closing adjustments. However, the structure and phasing of payments has been modified.
The original agreement provided for Hilcorp to pay BP $4 billion near-term and $1.6 billion through an “earnout” thereafter. Hilcorp paid BP a $500 million deposit on signing of the transaction in 2019.
The revised agreement “adjusts the structure and phasing of the remaining consideration to include lower completion payments in 2020, new cash flow sharing arrangements over the near-term, interest-bearing vendor financing and, potentially, an increase in the proportion of the consideration subject to earnout arrangements,” BP said.
The revised agreement is expected to maintain the majority of the value of the transaction. It is also structured with flexibility to phase and manage payments to accommodate current and potential future volatility in oil prices.
“We have worked closely with Hilcorp to reconfirm our commitment to completing this deal. The agreed revisions respond to market conditions while retaining the overall consideration. We look forward to progressing swiftly to completion and for Hilcorp to take over the operation of this important business. We are confident that completion of this sale is the right thing for both parties, for the business and for Alaska,” said William Lin, BP chief operating officer of upstream regions.
BP and Hilcorp have developed detailed transition plans to deliver a smooth handover of operations upon completion to allow Hilcorp to focus on embedding planned operating efficiencies as rapidly as possible.
The transaction is part of BP’s divestment programm to deliver $15 billion of announced divestments by mid-2021. Information about the transaction will be included in BP’s first quarter 2020 results, to be released on April 28.
A person who contracted COVID-19 coronavirus at a longterm care facility in Sitka was one of two Alaskans diagnosed with the illness through in the 24-hour period that ended at midnight Saturday.
The other person is in the Fairbanks / North Pole area.
Also, an inmate at the Goose Creek Correctional Center, making it almost certain that there will be similar cases. Inmates are being tested as epidemiologists determine who they may have been in close contact with, and the inmate who contracted the virus has been in isolation for the past week.
There have been a total of 341 cases of the coronavirus in Alaska since the outbreak of the contagion, with 217 of them recovered.
In the past several days, no more hospitalizations or deaths were reported. A total of 36 people have been hospitalized and 9 Alaskans died from the illness, with two of those dying out of state.
After the Must Read Alaska story about one business’ struggle to cope with an impossible government COVID-19 regulation, Alaskans stepped up to help.
The back story: Jason Floyd and his family had lost their other small business lines of income due to the various government restrictions during the COVID-19 pandemic. There would be no peony market this year, and the 4-H contract to manage the exchange student program was cancelled. Piano and voice lessons, which were Michele Floyd’s income stream, are now verboten by government order.
But when they learned they had to have hand sanitizer at the door of their AmmoCan Coffee Shop, they were at a loss — no one had any available in Soldotna. They were on the brink of closing the doors, business had been so difficult for the past several weeks of government-mandated shutdown.
They read the regulations and the penalties were clear: They could go to prison if they did not comply with the hand-sanitizer rule.
Soon, however, the coveted product came flying in the door. Friends of the Floyds answered the call and brought them so much hand sanitizer that “I could have filled a swimming pool with it,” Floyd said. “My phone has been blowing up with people wanting to bring some over.”
A pharmacist in Anchorage who heard about the plight of the business called a pharmacist in Soldotna and asked him to help out. That was the first ray of hope for the Floyds, and that’s when everything turned around. They were told to come over with a gallon jug and fill it up with gloppy virus-killing elixir that the pharmacist was making by the vat.
Then, in typical Alaska style, a private pilot flew a box of the product in from the Eagle River area. Ken McCarty loaded up his plane on Saturday and flew out of the Birchwood Airport, landing in Kenai. He was met by Floyd, who promised him a cup of coffee, hand delivered.
By Saturday night, Floyd was telling good-hearted hand sanitizer donors to look around and see if any other business they care about could use it, because he had more than AmmoCan can reasonably use in a month, and lots of businesses were in the same boat.
Soon after that, Floyd learned that the State of Alaska had suddenly cancelled the health mandate that restaurants have to have hand sanitizer in the entry.
While AmmoCan Coffee was getting set up by Alaskans to meet the regulations, the regulation itself was being shelved.
The GoFundMe page set up by Must Read Alaska to Save AmmoCan Coffee has also helped keep the shop from going broke. Participants have raised over $7,300 for the little coffee shop on the Kenai Peninsula.
The Floyds have been overwhelmed with the support they received from people they’ve never even met, as well as the hundreds of well-wishers who came by and called to promise them they’d come by and get some coffee. Floyd said his family was the subject of a lot of heartfelt prayer, as well. He accepted all of the help with humility and gratitude.
“This is why I love Alaska so much,” Floyd said. “This is what Alaska is all about — taking care of each other.”
The first check for $3,000 from the GoFundMe campaign has already been sent to the the Floyds; the second check will go out this week, with what this writer hopes is enough to save a family business from ruin by getting them through the next couple of months of economic disaster.
The coffee shop, run by the entire family, doesn’t fit the mold for the SBA government loans — and those have been hard to come by even for those who do fit the mold.
But the Must Read Alaska readership came through to give back to a family that has been “paying it forward” for years in their community.
WHAT SCHOOL BOARD SAID IS ‘NOT SAFE FOR WORK’ OR CLASSROOM
Trigger warning: The following passage of American literature that was recently part of required reading for an English class in the Mat-Su Valley District Schools (and is part of curriculum in Anchorage Public Schools) may upset some readers and may not be appropriate for minors:
“Because of a need for stability, children easily become creatures of habit. After the third time in Mother’s bed, I thought there was nothing strange about sleeping there.
“One morning she got out of bed for an early errand, and I fell asleep again. But I awoke to a pressure, a strange feeling on my left leg. It was too soft to be a hand, and it wasn’t the touch of clothes. Whatever it was, I hadn’t encountered the sensation in all the years of sleeping with Momma. It didn’t move, and I was too startled to. I turned my head a little to the left to see if Mr. Freeman was awake and gone, but his eyes were open and both hands were above the cover. I knew, as if I had always known, it was his “thing” on my leg.
“He said, “Just stay right here, Ritie, I ain’t gonna hurt you.” I wasn’t afraid, a little apprehensive, maybe, but not afraid. Of course I knew that lots of people did “it” and they used their “things” to accomplish the deed, but no one I knew had ever done it to anybody. Mr. Freeman pulled me to him, and put his hand between my legs. He didn’t hurt, but Momma had drilled into my head: “Keep your legs closed, and don’t let nobody see your pocketbook.”
“Now, I didn’t hurt you. Don’t get scared.” He threw back the blankets and his “thing” stood up like a brown ear of corn. He took my hand and said, “Feel it.” It was mushy and squirmy like the inside of a freshly killed chicken. Then he dragged me on top of his chest with his left arm, and his right hand was moving so fast and his heart was beating so hard that I was afraid that he would die. Ghost stories revealed how people who died wouldn’t let go of whatever they were holding. I wondered if Mr. Freeman died holding me how I would ever get free. Would they have to break his arms to get me loose?
Finally he was quiet, and then came the nice part. He held me so softly that I wished he wouldn’t ever let me go. I felt at home. From the way he was holding me I knew he’d never let me go or let anything bad ever happen to me. This was probably my real father and we had found each other at last. But then he rolled over, leaving me in a wet place and stood up. “I gotta talk to you, Ritie.” He pulled off his shorts that had fallen to his ankles, and went into the bathroom. It was true the bed was wet, but I knew I hadn’t had an accident. Maybe Mr. Freeman had one while he was holding me. He came back with a glass of water and told me in a sour voice, “Get up. You peed in the bed.” He poured water on the wet spot, and it did look like my mattress on many mornings.”
– “Now I Know Why the Caged Bird Sings,” by Maya Angelou
The Mat-Su School Board made a difficult call last week, one that they knew would upset liberals, and they were not disappointed in that regard. On a vote of 5-2, five books were crossed off the high school elective English coursework:
“The Things They Carried” by Tim O’Brien
“I Know Why the Caged Bird Sings” by Maya Angelou
“Catch-22” by Joseph Heller
“Invisible Man” by Ralph Ellison
“The Great Gatsby” by F. Scott Fitzgerald
All of them have issues — mostly graphic depictions of a sexual nature, rape, violence, or racist stereotyping.
The response from the Left was that the books were banned and that this is typical right-wing censorship one should come to expect from the Mat-Su Valley. That’s what folks are reading in the mainstream media:
The books in question were not banned. They’re still available in the school libraries, but are not required reading in classes. Teachers will need to look for other works of literature to teach. There are hundreds of years of books to choose from that do not describe child rape.
Did the school board do teachers a favor? Quite possibly.
The passage above from Maya Angelou’s classic is the kind of prose that if read aloud in a classroom by a teacher, could draw a lawsuit.
It’s not the kind of passage that one could read aloud in the lunchroom at work.
In fact, it may not be the kind of passage that could even be read into the record at a school board meeting without the reader being called out of order.
Must Read Alaska readers, what are your thoughts? Are high school students mature enough to consume these graphic descriptions of horrific child abuse? What would you have done if you were a school board member making the decision?
In the 24 hours that ended Friday night, no cases of the COVID-19 coronavirus were diagnosed in Alaska.
However, on Saturday Sitka Borough officials announced that a person at a long-term care center had contracted the illness. The person, who lives in the Southeast Alaska Regional Health Consortium Long Term Care facility was taken to Mount Edgecumbe Medical Center and isolated.
The likelihood is if that person has tested positive, there are others in the community that will test positive as well. The case will be included in Sunday’s state report.
All of the other residents of the care facility have been tested and an investigation is underway to identify the source of the virus, the borough said.
Health officials will isolate additional people if needed, according to the statement.
On Saturday, the Department of Health and Social Services revised Health Attachment F of Mandate 16, which decreed that either hand sanitizer or hand-washing stations had to be in the entry of all restaurants.
The move came as restaurant owners across Alaska chaffed at the law, which had heavy penalties, including imprisonment, attached to it.
Commissioner Adam Crum said the adjustment was made after it was brought to the department’s attention that many communities still cannot get hand sanitizer in any reliable quantity. Although it is now being manufactured at Alaska distilleries, it is not available in most small communities, and is expensive when it is.
Hand sanitization or handwashing still must be available, but it already is in restaurants. Gone is the entryway hand-sanitizer requirements. These state mandates supersede any local mandates beginning Monday.
Commissioner Crum said his department is “Here to help, definitely don’t want insurmountable barriers. We will make all corrections we need to make it right.”
The State of Alaska received two disbursements from the federal government this week, with instructions to get it out quickly, fairly, and as equitably as possible to address the economic disaster created by COVID-19.
The Dunleavy Administration has a plan in place to make sure 45 percent of the $1.25 billion that came in goes directly to local governments, as required by the CARES Act, that $300 million is used to help struggling Alaska businesses, particularly in coastal communities, and that the rest of the COVID-19 relief funds are stage-gated to help the state survive before the deadline to expend the funds arrives in December. The State Department of Health and Social Services has seen its budget tapped heavily, and will need some reimbursement. The Department of Labor has had to staff up to process the unemployment claims of the 60,000 Alaskans suddenly out of work.
But Senate President Cathy Giessel and other leaders in the Alaska Legislature today are polling members to see if the House and Senate can get enough members show up in Juneau in the next week or the week following, so they can put a stop to the Dunleavy plan to issue the money beginning May 1, and start their own plan for disbursing the COVID-19 disaster money.
According to some state budget experts, they’re on a fool’s mission. The Legislative Budget and Audit committee has the spending plan from the governor and can quickly give him the go-ahead to simply hit the send button and get the money to the municipalities. Is the Legislature prepared to sue him to stop him from disbursing the funds, MRAK sources asked.
In the Senate Majority’s own explanation of COVID-19 disaster funding, the majority admits that the governor has the authority to get the money out — “as needed to fight the COVID-19 pandemic and offset economic losses.”
What would the legislators do differently? It is possible they want to try again to fund items the governor vetoed in the regular operating budget — things like more funding for ferries and public broadcasting, for example. But with 60 legislators, it’s anyone’s guess how that would turn out, or how long it would take to come to an agreement.
Also tricky for the Legislature is that if they convene in Juneau, the governor may pressure them to pay out the remainder of last year’s dividend — and he’ll have the people of Alaska squarely on his side.
This time, he’ll also have the business community — landlords, utilities, and others who are not able to collect remittances due to the actions of SB 241, which put in provisions that don’t allow for collections, repossessions, disconnections, or evictions. The business community is clamboring for the Legislature to release the Permanent Fund dividend. There are some heavy-hitters in that business sector who are not too happy with the legislative majority over its withholding of the $1,000 stimulus check to Alaskans.
And finally, with a 20 percent unemployment rate and people’s pocketbooks empty, there are a lot of Alaskans who suddenly have a lot more time to take part in the political process, and a lot more motivation to do so.
Meanwhile, the governor has asked the Legislative Budget and Audit Committee to act quickly — by April 29 — so that he can distribute the funds starting May 1. The game’s afoot.
Jason Floyd was living his dream in Soldotna. After being laid off during budget cuts by the University of Alaska a few years ago, he and with his wife Michele and five children opened up a coffee shop in the heart of the Kenai Peninsula.
Ammo-Can Coffee is that coffee shop. Between the regionally famous cups of coffee that bring people streaming through the doors, and the various groups that use the meeting room, Ammo-Can has become a cultural center of sorts in Soldotna, especially for those who love America and the Constitution.
Ammo-Can offers discounts for veterans, and another discount for those responsibly carrying firearms. Floyd asks all his customers if they are packing, and thanks them for supporting the Second Amendment.
He has a sign on the wall that says “Keep your firearm holstered. If need arises, judicious marksmanship is appreciated.”
“We get lots of people taking their photos next to it but really, that’s our rule,” he said. He doesn’t allow people to unholster their firearms in his establishment, but he honors their right to carry.
When the COVID-19 mandates came down, business dropped off dramatically, as it has done all over the state. But the Floyds were able to stay open for several weeks, as they were still able to legally provide take-out coffee. The coffee klatch groups couldn’t gather, and the youth groups from a local church could no longer have their weekly meeting there.
Clearly, the Floyds’ finances were growing more problematic. They were not able to make good on their lease for the first time, and the government aid programs for businesses, they discovered, were not designed for a business like theirs, with all the members of the family working as baristas and bottle-washers.
The Floyds have other businesses to help them make ends meet: They own a small peony brokerage representing farms across the state. This year, weddings are being cancelled all over America, and most Alaska peony farmers will lose their crops because the markets have dried up. He also runs a 4-H program which has been cancelled due to COVID-19. His wife Michele teaches piano and voice.
“She is my rock,” Floyd said.
Usually, diversifying your income streams in Alaska provides some financial security, but not this year for the Floyds: Their income streams have dissolved.
Floyd hit a low point when all of a sudden a call came from the church youth group that had been meeting weekly at the shop. They asked him if he would meet them on the curb.
Jason went out the door and greeted the youth, who handed him their monthly tithe. They wanted him to know they knew times were tough, and they looked forward to better days ahead. But in the meantime, they wanted him to accept their contribution.
He’d never imagined a world where he would be accepting money from his church youth group customers just to keep his business alive.
HEALTH MANDATE 16 – THE NAIL IN THE COFFIN?
The final blow came with Health Mandate 16, announced on Wednesday by the Dunleavy Administration.
It was supposed to start a “stage-gated” opening of businesses around the state, but for many business owners, it has proven to be a nightmare.
Ammo-Can is experiencing that nightmare. While people have been able to come into the shop to buy coffee to take it with them, the newest mandate says that the business, and all others that serve the public, must provide hand sanitizer at the door.
The problem is, in Soldotna, Nikiski, Homer, and most small towns around Alaska, there is no hand sanitizer for sale at any price. You can’t even find a bottle of Everclear to make your own.
A call to the wholesaler ALSCO in Anchorage verified that no commercial sizes of hand sanitizer is available and there is no date in the future when it will be.
The Floyds, like many businesses that were hanging on by a thread, had great hopes that this Friday they would be able to open to the public. Now, he feels the government has dealt him a crushing blow.
Instead of allowing people inside the shop, as they’ve been able to do for a month, the coffee shop can suddenly only provide curb-side service.
Floyd says the penalties associated with not obeying the mandate are serious: A violation of the mandate can result in an order to close, or a civil fine up to $1,000 per violation. In addition, the business can be criminally prosecuted for reckless endangerment, a Class A misdemeanor.
That means the father of five could face imprisonment for not more than a year if he just stood his ground against the government.
But the penalties don’t stop there: Under Alaska Statute 12.55.035, any person violating Mandate 16 may be fined up to $25,000 and a business organization may be sentenced to pay a fine not exceeding the greatest of $2,500,000 for a misdemeanor offense that results in death, or $500,000 for a class A misdemeanor offense that does not result in death.
In spite of everything, Floyd says the community is amazing and that “coffee is a special culture in Alaska.” He has put his faith in God.
CAN AMMO-CAN COFFEE SURVIVE?
Ammo-Can Coffee is like thousands of businesses that are suffering under local, state, and federal government mandates.
Must Read Alaska has set up a GoFundMe page to help keep this family-owned business alive.
GoFundMe allows people to make contributions to causes. Like this one, for Ammo-Can Coffee, a solid small family-owned business in Soldotna.
Buy a “virtual cup of coffee” and send some love to the Floyd family so they can make it through the next few weeks of rigid government mandates and keep their doors open and their coffee pot on.
You can also send the business a cash contribution through the Venmo app. Jason’s Venmo identifier is Jason Floyd @ Jason-Floyd76.
Gov. Mike Dunleavy has been hosting live press conferences at 5 pm Monday through Friday to update Alaskans on the progress his administration is making in vanquishing the COVID-19 coronavirus.
Questions from the reporters are about rules and mandates, testing, and local issues.
But the public can also watch these press conferences, which often go for about an hour and feature Dr. Anne Zink, Chief Medical Officer, and Commissioner Adam Crum of the Department of Health and Social Services.
During Friday’s edition of the “daily presser,” one public viewer on the video feed gave a whole new meaning to the phrase “presser” in his comments, captured during Dunleavy’s remarks: If he can get that close to a hairdresser, why not an exotic dancer at the Alaska Bush Company?
(This will certainly be a topic at the Monday morning planning meeting, we presume. As the state government gets its fingers into the running of businesses during the pandemic, this rule making process should be interesting to watch.)
