Net income was down significantly in the second quarter 2018 for Oklahoma City’ls Blueknight Energy Partners, L.P. but the company’s total revenues were up by nearly twice as much as a year earlier.
The company said net income was $1.8 million on revenues of $83.5 million for the three months ending June 30. It compared to the net income of $6.4 million on total revenues of $43.9 million for the same period in 2017.
Operating income for the 2018 second quarter totaled $6.8 million compared to $6.5 million a year earlier. And adjusted earnings before interest, taxes, depreciation and amortization was $15.4 million, down from the $19.2 million reported at this time in 2017.
Distributable cash flow was down too from $12.7 million 2017 to $8 million for this year’s second quarter.
One bright spot was the company’s asphalt terminalling services segment which recorded a 13% increase in operating margin.
But Blueknight leadership blamed some of its problems on Cushing crude oil inventories which are at their lowest levels since November 2014. They are 51% below the 5-year average and 58% below last year’s storage level.
“Given the weak storage market coincides with our re-contracting efforts, our year-over-year operating margin, excluding depreciation and amortization, decreased in this business segment,” stated the company in its report. “However, a recently signed, two-million-barrel storage contract effective November 1, 2018 and continuing through December 31, 2019, indicates signs of improvement.”
The company said the early July restoration of service on its Eagle pipeline will add 20,000 barrels a day to its overall Oklahoma pipeline capacity. The line will transport lighter crudes out of the SCOOP region to Cushing.
Blueknight also said work on its Cimarron Express Pipeline is progressing. The 65-year mile crude line will carry oil from northeastern Kingfisher County to Blueknight’s crude oil terminal at Cushing. Completion is expected in mid-2019 and the pipeline will have an initial capacity of 90,000 barrels a day, expandable to more than 175,000 barrels per day.
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