CorEnergy Infrastructure Trust Inc. has retained an adviser for the sale its MoGas and Omega systems, the company said in a March 22 press release.
The Kansas City, Missouri-based company said the marketing process had “generated a number of highly interested and qualified participants.”
“Given the level of interest, the company expects to close the sale by early Q3 2023,” the company said.
Omega Pipeline Co. is a natural gas distribution system primarily serving the U.S. Army’s Fort Leonard Wood in south-central Missouri through a long-term contract with the Department of Defense.
MoGas Pipeline LLC is a 263-mile interstate natural gas pipeline system in and around St. Louis that extends into Central Missouri.
“We anticipate net proceeds from the sale of our MoGas and Omega systems will be sufficient to repay our bank facility in full,” CorEnergy Chairman and CEO Dave Schulte said. “We also expect that the remaining proceeds, combined with a new credit facility and operating cash flow, will enable us to retire a material percentage of our outstanding convertible debt prior to maturity.”
The company is also pursuing the sale of underutilized real estate with proceeds expected to be available for continued deleveraging, Schulte said.
Because of recent volume shifts in the California crude oil market, CorEnergy’s regulated pipelines are presently earning below what the California Public Utilities Commission (CPUC) considers fair and reasonable returns,” the company said.
“We have filed appropriate tariff increases to address these volume changes and begun collection of the first 10% increase as the balance of our proposed increase undergoes the CPUC review process,” Schulte said. “We believe that these proposed rate increases will restore our profitability, enabling us to repay any accumulated preferred dividend, resume quarterly preferred dividends and re-start our common dividend.”
CorEnergy is a real estate investment trust that owns and operates regulated natural gas transmission and distribution lines and crude oil transmission pipelines and associated rights-of-way.
Recommended Reading
Swift Solar, with Backing from Italy’s Eni, Raises Tech Financing
2024-06-12 - Swift Solar, with backing from Italy’s Eni and others, has raised a total of $44 million for work transforming the solar energy landscape with perovskite tandem solar projects.
TC Energy Shareholders OK Spinning Off Liquid Pipelines Business
2024-06-04 - TC Energy will spin off South Bow Corp., with its primary asset the Keystone oil pipeline, while shifting a hefty amount of TC Energy’s debt to the new company.
Exxon Mobil, Chevron See Profits Fall in 1Q Earnings
2024-04-26 - Chevron and Exxon Mobil are feeling the pinch of weak energy prices, particularly natural gas, and fuels margins that have cooled in the last year.
Berntsen Joins Xcel as Executive VP, Chief Legal and Compliance Officer
2024-05-22 - Rob Berntsen is assuming the role from Amanda Rome, who had been in the position on an interim basis.
Oil and Gas Chain Reaction: E&P M&A Begets OFS Consolidation
2024-04-26 - Record-breaking E&P consolidation is rippling into oilfield services, with much more M&A on the way.