CorEnergy Infrastructure Trust Inc. has retained an adviser for the sale its MoGas and Omega systems, the company said in a March 22 press release.
The Kansas City, Missouri-based company said the marketing process had “generated a number of highly interested and qualified participants.”
“Given the level of interest, the company expects to close the sale by early Q3 2023,” the company said.
Omega Pipeline Co. is a natural gas distribution system primarily serving the U.S. Army’s Fort Leonard Wood in south-central Missouri through a long-term contract with the Department of Defense.
MoGas Pipeline LLC is a 263-mile interstate natural gas pipeline system in and around St. Louis that extends into Central Missouri.
“We anticipate net proceeds from the sale of our MoGas and Omega systems will be sufficient to repay our bank facility in full,” CorEnergy Chairman and CEO Dave Schulte said. “We also expect that the remaining proceeds, combined with a new credit facility and operating cash flow, will enable us to retire a material percentage of our outstanding convertible debt prior to maturity.”
The company is also pursuing the sale of underutilized real estate with proceeds expected to be available for continued deleveraging, Schulte said.
Because of recent volume shifts in the California crude oil market, CorEnergy’s regulated pipelines are presently earning below what the California Public Utilities Commission (CPUC) considers fair and reasonable returns,” the company said.
“We have filed appropriate tariff increases to address these volume changes and begun collection of the first 10% increase as the balance of our proposed increase undergoes the CPUC review process,” Schulte said. “We believe that these proposed rate increases will restore our profitability, enabling us to repay any accumulated preferred dividend, resume quarterly preferred dividends and re-start our common dividend.”
CorEnergy is a real estate investment trust that owns and operates regulated natural gas transmission and distribution lines and crude oil transmission pipelines and associated rights-of-way.
Recommended Reading
Chevron’s Tengiz Oil Field Operations Start Up in Kazakhstan
2024-04-25 - The final phase of Chevron’s project will produce about 260,000 bbl/d.
ProPetro Ups Share Repurchases by $100MM
2024-04-25 - ProPetro Holding Corp. is increasing its share repurchase program to a total of $200 million of common shares.
Segrist: The LNG Pause and a Big, Dumb Question
2024-04-25 - In trying to understand the White House’s decision to pause LNG export permits and wondering if it’s just a red herring, one big, dumb question must be asked.
Baker Hughes Hikes Quarterly Dividend
2024-04-25 - Baker Hughes Co. increased its quarterly dividend by 11% year-over-year.
Weatherford M&A Efforts Focused on Integration, Not Scale
2024-04-25 - Services company Weatherford International executives are focused on making deals that, regardless of size or scale, can be integrated into the business, President and CEO Girish Saligram said.