Blueknight Announces Transformational $162 Million Sale of Crude Oil Organization

Transaction Highlights

Strategically repositions Blueknight as a pure-perform, downstream terminalling corporation focused on infrastructure and transportation conclusion markets
Materially increases economical adaptability and pro forma leverage to close to 2. occasions
Maintains yearly coverage ratio of 1.2 situations or increased on all distributions and strengthens stability of underlying income flows
Expected to make $1.5 to $2.5 million in additional once-a-year company discounts and lessen yearly upkeep funds expenditures to $5.5 to $6.5 million

Blueknight Vitality Associates, L.P. (“Blueknight” or the “Partnership”) (NASDAQ:BKEP) declared these days that it has entered into several definitive agreements to promote its crude oil terminalling, pipeline, and trucking business enterprise segments for close to $162 million in complete funds thought, like estimated crude oil linefill and stock. Net proceeds, soon after transaction fees, will be employed at first to cut down borrowings outstanding beneath the Partnership’s revolving credit score facility and for common partnership functions.

“This announcement signifies a considerable milestone as we transition Blueknight absent from conventional oil and fuel functions into a pure-perform, downstream terminalling organization focused on infrastructure and transportation conclusion markets,” reported Andrew Woodward, Chief Govt Officer. “We are fired up about the financial overall flexibility to each materially increase our stability sheet and pursue long term financial investment alternatives predicated on risk-altered returns though preserving our extended-time period financial targets.”

“Pro forma for the transactions, Blueknight’s differentiated, asphalt terminalling company provides an marketplace-major, secure money circulation profile underpinned by lengthy-phrase, take-or-spend contracts with a weighted average phrase of six a long time. Our leverage ratio is predicted to be close to 2. moments initially, and our protection ratio on all distributions is envisioned to be roughly 1.2 periods or greater on an once-a-year foundation. We believe that these transactions, coupled with our new and enhanced method, greatest placement the Partnership for prolonged-expression expansion and accomplishment,” extra Woodward.

Woodward concluded, “I would also like to categorical my deepest thanks to all the workforce who have supported these functions about the years and through this time of changeover. On behalf of the whole group, we sincerely enjoy all of your challenging get the job done and continued perseverance.”

Transaction Aspects

Blueknight entered into a definitive agreement to promote its crude oil terminalling segment to Enbridge, Inc. (NYSE:ENB) for a buy cost of $132 million, topic to customary changes and excluding crude oil linefill and stock. This phase contains somewhere around 6.6 million barrels of crude oil storage in Cushing, Oklahoma. The transaction is subject matter to Hart-Scott-Rodino assessment and closing is envisioned to occur inside of the upcoming 60 times.

In addition, Blueknight entered into a separate definitive arrangement to sell its crude oil pipeline organization to subsidiaries of CVR Energy, Inc. (NYSE:CVI) for a acquire cost of $20 million, matter to customary changes and excluding crude oil linefill and inventory. This organization involves 604 miles of crude oil pipeline and roughly .3 million barrels of connected crude oil storage found largely in Oklahoma. The transaction is issue to customary phrases and disorders and closing is expected to occur in the following 45 days.

Consideration for crude oil linefill and stock is approximated in accordance with marketplace-centered valuation formulation established forth in each and every of the respective agreements and is topic to improve at closing.

And finally, Blueknight entered into a definitive agreement to provide its crude oil trucking business enterprise to an undisclosed buyer, matter to customary changes.

Advisors

Simmons Strength | A Division Of Piper Sandler is serving as monetary advisor and Gibson, Dunn & Crutcher LLP is serving as authorized counsel to Blueknight. Sidley Austin LLP is serving as legal counsel to Enbridge, Inc. Baker Botts LLP is serving as lawful counsel to CVR Energy, Inc.

Forward-Hunting Statements

This release includes ahead-wanting statements. Statements incorporated in this release that are not historic information (together with, without the need of limitation, any statements about foreseeable future economical and running success, direction, projected or forecasted money outcomes, goals, challenge timing, anticipations and intentions and other statements that are not historic points) are forward-wanting statements. This kind of forward-searching statements are subject matter to numerous pitfalls and uncertainties. These challenges and uncertainties contain, among the other things, uncertainties relating to the Partnership’s credit card debt levels and constraints in its credit history agreement, its publicity to the credit rating danger of our 3rd-party shoppers, the Partnership’s upcoming cash flows and functions, foreseeable future industry circumstances, existing and foreseeable future governmental regulation, long run taxation and other aspects reviewed in the Partnership’s filings with the Securities and Trade Commission. If any of these challenges or uncertainties materializes, or must fundamental assumptions prove incorrect, precise benefits or results may possibly vary materially from people predicted. The Partnership undertakes no obligation to publicly update or revise any ahead-seeking statement, whether or not as a consequence of new details, foreseeable future situations or in any other case.

About Blueknight

Blueknight owns and operates a diversified portfolio of complementary midstream energy assets consisting of:

8.8 million barrels of liquid asphalt storage located at 53 terminals in 26 states
6.9 million barrels of higher than-floor crude oil storage potential positioned mostly in Oklahoma, approximately 6.6 million barrels of which are located at the Cushing Interchange terminalling facility in Cushing, Oklahoma
604 miles of crude oil pipeline found primarily in Oklahoma and
63 crude oil transportation automobiles deployed in Oklahoma and Texas.

Blueknight supplies integrated terminalling, accumulating and transportation products and services for providers engaged in the production, distribution and advertising and marketing of liquid asphalt and crude oil. Blueknight is headquartered in Tulsa, Oklahoma. For far more data, check out the Partnership’s web page at www.bkep.com.