Tulsa’s Blueknight Energy Partners, L.P. announced Monday the nearly $162 million sale of its crude oil terminalling, pipeline and trucking business segments to two separate buyers. It was a move by Blueknight to no longer be focused on traditional oil and gas operations and instead lean more toward downstream activities.
Blueknight’s terminalling segment was sold to Enbridge, Inc. based in Calgary, Canada for a purchase price of $132 million. The sale includes 6.6 million barrels of crude oil storage at Cushing, Oklahoma.
The second company CVR Energy, Inc. and its subsidiaries paid $20 million for Blueknight’s crude oil pipeline business. The purchase includes 604 miles of crude oil pipeline and nearly 0.3 million barrels of related crude oil stored primarily in Oklahoma.
CVR is the owner and operator of the Wynnewood refinery in southern Oklahoma where its capacity is 74,500 barrels a day. It also operates a refinery in Coffeyville, Kansas with a capacity of 132,000 barrels a day. It also owned 570 miles of leased and joint venture pipelines as well as 130 crude oil transports.
A controlling interest in CVR Energy is owned by investor Carl Icahn.
In announcing the sale, Blueknight Energy stated that net proceeds will be used initially to reduce borrowings under the company’s revolving credit facility and for general partnership purposes.
“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,” said Andrew Woodward, Chief Executive Officer. “We believe these transactions, coupled with our new and improved strategy, best position the Partnership for long-term growth and success.”
Blueknight Energy shares were unchanged at $1.80 when the markets closed last Friday. But following the Monday morning announcement, trading in the company skyrocketed and at day’s end, shares had made a 22% gain on a 39 cent increase and a closing price of $2.19.
Simmons Energy | A Division Of Piper Sandler is serving as financial advisor and Gibson, Dunn & Crutcher LLP is serving as legal counsel to Blueknight. Sidley Austin LLP is serving as legal counsel to Enbridge, Inc. Baker Botts LLP is serving as legal counsel to CVR Energy, Inc.
Source: BusinessWire