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Blueknight Energy Partners to Acquire Asphalt Facilities in Bainbridge, GA and Muskogee, OK

Blueknight Energy Partners, L.P. (NASDAQ: BKEP - Common Units) (NASDAQ: BKEPP - Preferred Units) ("BKEP" or the "Partnership"), announced today that a wholly-owned subsidiary of BKEP is expected to acquire two asphalt terminalling facilities located in Bainbridge, GA, and Muskogee, OK. The Bainbridge, GA, facility will be acquired from Ergon Asphalt & Emulsions, Inc., a Mississippi corporation ("EA&E"), and Ergon Terminaling, Inc., a Mississippi corporation ("ETI"). ETI and EA&E are subsidiaries of Jackson, Mississippi-based Ergon, Inc. ("Ergon"), which owns 100% of the outstanding membership interests of the General Partner of BKEP. In addition, Ergon will assign a long-term storage, throughput and handling agreement with a third-party for the Bainbridge facility. The Muskogee, OK, facility will be acquired from Frontier Terminal, LLC ("Frontier") and Cummins Investment Corporation ("CIC"). BKEP has also entered into two third-party storage, throughput and handling agreements associated with the Muskogee terminal that will be effective upon closing of the transaction.

Purchase price for the two terminals is expected to total $32.5 million, consisting of $10.5 million of BKEP common units to be issued to a subsidiary of Ergon in a private placement at a market price and $22.0 million in cash. The acquisition of the Bainbridge, GA, facility is still subject to the execution of definitive agreements, which is expected prior to December 1st, but the principal terms of the transaction are finalized. The Muskogee acquisition definitive agreements have been entered into and the closing of the transaction is subject to the assignment of certain leases and other customary closing conditions. Both transactions are expected to close in the fourth quarter. Once the transactions described are closed, Blueknight will own a network of 56 asphalt terminals in 26 states with a combined capacity of 10.3 million barrels of asphalt and residual fuel oil storage.

Mark Hurley, BKEP CEO, stated, "We are pleased to announce the expected acquisition of the Bainbridge, GA, and Muskogee, OK, asphalt terminals. The Bainbridge, GA, terminal represents the first of two anticipated drop-downs discussed at the time of the Ergon acquisition of BKEP's General Partner in October 2016. The facility includes approximately 200,000 barrels of storage and comes with a long-term contract with a credit-worthy third-party customer. The Muskogee terminal includes 500,000 barrels of storage and 245 acres of property, 150 of which we expect to further develop in the future. BKEP has entered into two long-term storage, throughput and handling contracts with credit-worthy third-party customers. Both customers will continue to market asphalt products out of the Muskogee facility and both are well established in the asphalt industry. We have enjoyed long-standing, mutually beneficial relationships with each of them and we look forward to further developing and expanding our relationships. These transactions total $32.5 million at an expected EBITDA multiple of less than 9.0x, and will be immediately accretive and leverage neutral. These acquisitions primarily represent the reinvestment of proceeds received from 2017 asset sales and include high-quality long-term contracts at very reasonable acquisition multiples. We will provide more details on these acquisitions on tomorrow afternoon's earnings conference call."

The Conflicts Committee of the Board of Directors of Blueknight Energy Partners G.P., L.L.C., the General Partner of BKEP, approved the acquisition of the Bainbridge, GA, facility.

About Blueknight Energy Partners, L.P.

BKEP owns and operates a diversified portfolio of complementary midstream energy assets consisting of approximately 9.6 million barrels of combined asphalt product and residual fuel oil storage located at 54 terminals in 26 states, 7.0 million barrels of crude oil storage located in Oklahoma and Texas, approximately 6.6 million barrels of which are located at the Cushing, Oklahoma, Interchange, approximately 670 miles of crude oil pipeline located primarily in Oklahoma and Texas and approximately 200 crude oil transportation and oilfield services vehicles deployed in Kansas, Oklahoma and Texas. BKEP provides integrated services for companies engaged in the production, distribution and marketing of crude oil, asphalt and other petroleum products. BKEP is headquartered in Oklahoma City, Oklahoma. For more information, visit the Partnership's web site at

Forward-Looking Statements

This release includes forward-looking statements. Statements included in this release that are not historical facts are forward-looking statements. These statements are based on certain assumptions made by the Partnership and its general partner based upon management's experience and perception of historical trends, current conditions, expected future developments and other factors the Partnership and its general partner believe are appropriate in the circumstances. These statements include, but are not limited to, statements about the consummation and benefits of the acquisitions of the asphalt terminals and other statements about future financial and operating results, objectives, expectations and intentions that are not historical facts. Such forward-looking statements are subject to various risks and uncertainties. These risks and uncertainties include, among other things, satisfaction of the closing conditions to the transactions described above, uncertainties relating to the Partnership's future cash flows and operations, the Partnership's ability to pay future distributions, future market conditions, current and future governmental regulations, future taxation and other factors discussed in the Partnership's filings with the SEC. If any of these risks or uncertainties materializes, or should underlying assumptions prove incorrect, actual results or outcomes may vary materially from those expected. The Partnership undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Investor Relations, 918-237-4032
Media Contact:
Brent Gooden, 405-715-3232 or 405-818-1900

Oct 31, 2017