Blueknight to Sell Crude Oil Business
Blueknight Energy Partners, L.P. (NASDAQ: BKEP) reported Monday that it has agreed to sell its crude oil terminalling, pipeline and trucking business segments via multiple definitive agreements for approximately $162 million in total cash consideration.
“This announcement represents a significant milestone as we transfer Blueknight away from traditional oil and gas operations into a pure-play, downstream terminalling business focused on infrastructure and transportation end markets,” remarked Blueknight CEO Andrew Woodward in a written statement.
Specific deals include:
- Selling Blueknight’s crude oil terminalling business to Enbridge, Inc. (NYSE: ENB) for a $132 million purchase price that should close within the next 60 days and includes approximately 6.6 million barrels of crude storage in Cushing, Okla.
- Within the next 45 days selling Blueknight’s crude oil pipeline business to CVR Energy, Inc. (NYSE: CVI) subsidiaries for a $20 million purchase price, including 604 miles (972 kilometers) of crude oil pipeline and approximately 300,000 barrels of related crude storage primarily in Oklahoma
- Selling Blueknight’s crude oil trucking business to an undisclosed buyer.
Blueknight noted the purchase prices are subject to customary adjustments and exclude crude oil linefill and inventory. The company added that it expects to generate $1.5 to $2.5 million in annual corporate savings and cut annual maintenance capital expenditures to $5.5 to $6.5 million.
“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,” continued Woodward.
Blueknight stated it will initially use net proceeds to reduce borrowings outstanding under its revolving credit facility and for general purposes.
“I would also like to express my deepest thanks to all the employees who have supported these operations over the years and during this time of transition,” noted Woodward. “On behalf of the entire organization, we sincerely appreciate all of your hard work and continued dedication.”
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