(Source: Blueknight Energy Partners LP)
Blueknight Energy Partners LP has entered into multiple definitive agreements on Dec. 21 to sell its crude oil terminalling, pipeline, and trucking business segments for approximately $162 million in total cash consideration, including estimated crude oil linefill and inventory. Net proceeds, after transaction costs, will be used initially to reduce borrowings outstanding under the Partnership's revolving credit facility and for general partnership purposes.
Blueknight entered into a definitive agreement to sell its crude oil terminalling segment to Enbridge Inc. for a purchase price of $132 million, subject to customary adjustments and excluding crude oil linefill and inventory. This segment includes approximately 6.6 million barrels (MMbbl) of crude oil storage in Cushing, Oklahoma. The transaction is subject to Hart-Scott-Rodino review and closing is expected to occur within the next 60 days.
In addition, Blueknight entered into a separate definitive agreement to sell its crude oil pipeline business to subsidiaries of CVR Energy Inc. for a purchase price of $20 million, subject to customary adjustments and excluding crude oil linefill and inventory. This business includes 604 miles of crude oil pipeline and approximately 0.3 MMbbl of related crude oil storage located primarily in Oklahoma. The transaction is subject to customary terms and conditions and closing is expected to occur within the next 45 days.
Consideration for crude oil linefill and inventory is estimated in accordance with market-based valuation formulas set forth in each of the respective agreements and is subject to change at closing.
Lastly, Blueknight entered into a definitive agreement to sell its crude oil trucking business to an undisclosed buyer, subject to customary adjustments.
“This announcement represents a significant milestone as we transition Blueknight away from traditional oil and gas operations into a pure-play, downstream terminalling business focused on infrastructure and transportation end markets,” Andrew Woodward, Blueknight CEO, said. “We are excited about the financial flexibility to both materially improve our balance sheet and pursue future investment opportunities predicated on risk-adjusted returns while maintaining our long-term financial targets.”
Recommended Reading
The Pulse: Why Do You Attend NAPE? [WATCH]
2023-02-08 - From relationship building to deal making, here are the reasons these industry professionals attend NAPE.
Petrus Appoints Lindsay Hatcher to Executive Position
2023-02-08 - With 15 years of experience in Alberta’s energy sector, Lindsay Hatcher will be vice president of commercial and corporate development at Petrus Resources.
A&D Minute: Are MLPs Making a Comeback? [WATCH]
2023-02-08 - Also in this week's A&D Minute: Coal company Alliance Resource Partners is continuing its Permian Basin expansion, plus industry veteran Rick Muncrief shared his A&D success secrets at NAPE.
TotalEnergies Has Not Signed Contract on New Adani Hydrogen Venture: CEO
2023-02-08 - Last year, TotalEnergies and Adani Green Energy announced a proposed contract to extend their partnership to advance the production of green hydrogen.
Equinor Shares Spike as Gas Bonanza Lands Record Profits
2023-02-08 - After Russia's Gazprom cut natural gas deliveries to Europe following the country's invasion of Ukraine, Equinor became the region's largest natural gas supplier.