Oklahoma City-based Blueknight Energy is reporting a drop in its fourth quarter 2017 net income. At the same time, business has picked up in the STACK and SCOOP giving optimism to corporate leaders.
Released late Wednesday, the report showed net income of $0.4 million compared to $2 million for the same period in 2016. The company said the net income was impacted by a $2.4 million asset impairment charge related to the crude oil trucking and producer field services business segment.
Operating income was $3.6 million, up from the $3.4 million reported in the fourth quarter of 2016.
For the year, net income was $20 million compared to the $4.8 million lost in 2016. The 2016 loss was attributed to a $25.8 million asset impairment charge primarily associated with the cancellation of the Knight Warrior pipeline project.
“In the crude oil terminalling services segment, while our Cushing terminal remained fully contracted throughout the year, a flat forward curve negatively impacted our storage rates as we renewed contracts during the year,” stated CEO Mark Hurley. “As a result, terminalling services revenues and operating margin narrowed as compared to the prior year.”
The company said its crude oil pipeline business in 2017 was affected by its out-of-service pipeline in Oklahoma which limited volumes.
“However, at year-end, I am pleased to report we secured an alternative route for our pipeline and construction has started with a return to service anticipated by the end of the second quarter of 2018,” added Hurley. “Once complete, we will nearly double our Oklahoma pipeline capacity and will be able to transport multiple grades of crude oil from the active producing regions of Oklahoma to our terminal in Cushing.”
He said the company has already secured more business from the STACK and SCOOP plays in the state and it overlaps with the pipeline the company is putting back into service this year.
“We also continue to work on a substantial pipeline project in the STACK and we expect both our trucking and storage businesses will benefit from the completion of the project,” said Hurley.