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Enbridge (ENB) Completes Cushing Asset Acquisition From Blueknight

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Enbridge Inc. (ENB - Free Report) announced that it completed the acquisition-deal with Blueknight Energy Partners, L.P. to acquire the latter’s crude oil terminalling segment in Cushing, OK. Notably, the purchase price of the Cushing assets is $132 million.

The facility includes 34 tanks, with a storage capacity of 6.6 million barrels and the purchase is expected to enhance Enbridge’s total capacity at Cushing to 26 million barrels.

Per Enbridge, the acquisition will enable it to maintain its ranking as the second-largest storage operator at Cushing. Further, it is expected to provide linking feasibility to new production basins in Oklahoma and the Rockies. Notably, Enbridge’s acquisition of the assets instead of building them provides them with competitive benefits.

In February 2021, Blueknight announced the closure of its crude oil pipeline and trucking segments sale deal. Importantly, Enbridge’s acquisition of the terminalling segment marks Blueknight’s exit from its typical oil and gas operations into a pure-play downstream terminalling company engaged in infrastructure and transportation end-markets.

BlueKnight will receive approximately $164 million in cash for the multiple divestment agreements, including estimated crude oil line-fill and inventory. The partnership is expected to use the net proceeds to reduce debt and improve leverage.

The transaction is subject to customary post-closing adjustments, and excluding crude oil line-fill and inventory. On its part, Enbridge aims to expand its storage capabilities and connections in Cushing as part of its US Gulf Coast strategy to direct oil to the Gulf Coast, which is a significant transshipment point as well as a business center.

Company Profile & Price Performance

Headquartered in Calgary, AB, Enbridge is a leading energy infrastructure company.

Shares of the company have underperformed the industry in the past six months. Its stock has gained 10.9% compared with the industry’s 15.9% growth.

 

 

Zacks Rank & Stocks to Consider

The company currently carries a Zack Rank #3 (Hold).

Some better-ranked players in the energy space are Diamondback Energy, Inc. (FANG - Free Report) and Repsol SA (REPYY - Free Report) , each currently sporting a Zacks Rank #1 (Strong Buy), and Oceaneering International, Inc. (OII - Free Report) , currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Diamondback’s earnings for 2021 are expected to increase 12.7% year over year.

Repsol’s earnings for 2021 are expected to surge 17.1% year over year.

Repsol’s earnings for 2021 are expected to rise 28.8% year over year.

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