x | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware (State or other jurisdiction of incorporation or organization) | 20-8536826 (IRS Employer Identification No.) | |
201 NW 10th, Suite 200 Oklahoma City, Oklahoma 73103 (Address of principal executive offices, zip code) Registrant’s telephone number, including area code: (405) 278-6400 |
Large accelerated filer o | Accelerated filer x | |
Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company o |
Table of Contents | ||
Page | ||
FINANCIAL INFORMATION | ||
Unaudited Condensed Consolidated Financial Statements | ||
Condensed Consolidated Balance Sheets as of December 31, 2015 and September 30, 2016 | ||
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2015 and 2016 | ||
Condensed Consolidated Statement of Changes in Partners’ Capital for the Nine Months Ended September 30, 2016 | ||
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2015 and 2016 | ||
Notes to the Unaudited Condensed Consolidated Financial Statements | ||
Management’s Discussion and Analysis of Financial Condition and Results of Operations | ||
Quantitative and Qualitative Disclosures about Market Risk | ||
Controls and Procedures | ||
OTHER INFORMATION | ||
Legal Proceedings | ||
Risk Factors | ||
Other Information | ||
Exhibits |
BLUEKNIGHT ENERGY PARTNERS, L.P. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except unit data) | |||||||
As of | As of | ||||||
December 31, 2015 | September 30, 2016 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 3,038 | $ | 4,285 | |||
Accounts receivable, net of allowance for doubtful accounts of $38 and $21 at December 31, 2015 and September 30, 2016, respectively | 8,697 | 8,571 | |||||
Receivables from related parties, net of allowance for doubtful accounts of $225 and $0 at December 31, 2015 and September 30, 2016, respectively | 1,844 | 1,262 | |||||
Prepaid insurance | 1,397 | 2,554 | |||||
Assets held for sale, net of accumulated depreciation of $1,442 at September 30, 2016 | — | 1,375 | |||||
Other current assets | 4,384 | 7,532 | |||||
Total current assets | 19,360 | 25,579 | |||||
Property, plant and equipment, net of accumulated depreciation of $205,967 and $223,563 at December 31, 2015 and September 30, 2016, respectively | 312,934 | 286,829 | |||||
Investment in unconsolidated affiliate | 19,078 | 20,164 | |||||
Goodwill | 4,387 | 4,746 | |||||
Debt issuance costs, net | 2,201 | 2,389 | |||||
Intangibles and other assets, net | 6,786 | 14,299 | |||||
Total assets | $ | 364,746 | $ | 354,006 | |||
LIABILITIES AND PARTNERS’ CAPITAL | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 5,236 | $ | 3,440 | |||
Accrued interest payable | 191 | 219 | |||||
Accrued property taxes payable | 2,773 | 3,253 | |||||
Unearned revenue | 4,299 | 3,941 | |||||
Unearned revenue with related parties | 756 | 96 | |||||
Accrued payroll | 7,263 | 5,581 | |||||
Other current liabilities | 6,358 | 5,790 | |||||
Total current liabilities | 26,876 | 22,320 | |||||
Unearned revenue with related parties, noncurrent | 80 | 52 | |||||
Other long-term liabilities | 2,468 | 2,944 | |||||
Interest rate swap liabilities | 3,103 | 3,989 | |||||
Long-term debt | 245,000 | 254,000 | |||||
Commitments and contingencies (Note 14) | |||||||
Partners’ capital: | |||||||
Common unitholders (33,039,818 and 37,122,607 units issued and outstanding at December 31, 2015 and September 30, 2016, respectively) | 493,824 | 478,108 | |||||
Series A Preferred Units (30,158,619 and 30,147,624 units issued and outstanding at December 31, 2015 and September 30, 2016, respectively) | 204,599 | 204,599 | |||||
General partner interest (1.8% and 1.7% interest with 1,127,755 outstanding at both dates) | (611,204 | ) | (612,006 | ) | |||
Total Partners’ capital | 87,219 | 70,701 | |||||
Total liabilities and Partners’ capital | $ | 364,746 | $ | 354,006 |
BLUEKNIGHT ENERGY PARTNERS, L.P. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per unit data) | ||||||||||||||||
Three Months ended September 30, | Nine Months ended September 30, | |||||||||||||||
2015 | 2016 | 2015 | 2016 | |||||||||||||
(unaudited) | ||||||||||||||||
Service revenue: | ||||||||||||||||
Third party revenue | $ | 36,360 | $ | 35,600 | $ | 104,872 | $ | 96,711 | ||||||||
Related party revenue | 10,857 | 5,734 | 31,275 | 18,605 | ||||||||||||
Product sales revenue: | ||||||||||||||||
Third party revenue | — | 5,605 | — | 16,058 | ||||||||||||
Total revenue | 47,217 | 46,939 | 136,147 | 131,374 | ||||||||||||
Costs and expenses: | ||||||||||||||||
Operating | 31,678 | 25,267 | 97,446 | 80,314 | ||||||||||||
Cost of product sales | — | 3,513 | — | 10,789 | ||||||||||||
General and administrative | 4,742 | 4,865 | 14,386 | 14,447 | ||||||||||||
Asset impairment expense | — | — | — | 22,845 | ||||||||||||
Total costs and expenses | 36,420 | 33,645 | 111,832 | 128,395 | ||||||||||||
Gain on sale of assets | 6,213 | 104 | 6,477 | 85 | ||||||||||||
Operating income | 17,010 | 13,398 | 30,792 | 3,064 | ||||||||||||
Other income (expense): | ||||||||||||||||
Equity earnings in unconsolidated affiliate | 1,399 | 305 | 3,338 | 1,086 | ||||||||||||
Interest expense (net of capitalized interest of $80, $0, $153 and $41, respectively) | (4,343 | ) | (2,175 | ) | (10,576 | ) | (10,742 | ) | ||||||||
Income (loss) before income taxes | 14,066 | 11,528 | 23,554 | (6,592 | ) | |||||||||||
Provision for income taxes | 99 | 109 | 296 | 199 | ||||||||||||
Net income (loss) | $ | 13,967 | $ | 11,419 | $ | 23,258 | $ | (6,791 | ) | |||||||
Allocation of net income (loss) for calculation of earnings per unit: | ||||||||||||||||
General partner interest in net income | $ | 376 | $ | 341 | $ | 720 | $ | 291 | ||||||||
Preferred interest in net income | $ | 5,391 | $ | 6,279 | $ | 16,173 | $ | 17,058 | ||||||||
Income (loss) available to limited partners | $ | 8,200 | $ | 4,799 | $ | 6,365 | $ | (24,140 | ) | |||||||
Basic net income (loss) per common unit | $ | 0.24 | $ | 0.13 | $ | 0.19 | $ | (0.69 | ) | |||||||
Diluted net income (loss) per common unit | $ | 0.21 | $ | 0.13 | $ | 0.19 | $ | (0.69 | ) | |||||||
Weighted average common units outstanding - basic | 32,947 | 36,036 | 32,919 | 34,139 | ||||||||||||
Weighted average common units outstanding - diluted | 63,875 | 36,036 | 32,919 | 34,139 |
BLUEKNIGHT ENERGY PARTNERS, L.P. CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS’ CAPITAL (in thousands) | |||||||||||||||
Common Unitholders | Series A Preferred Unitholders | General Partner Interest | Total Partners’ Capital | ||||||||||||
(unaudited) | |||||||||||||||
Balance, December 31, 2015 | $ | 493,824 | $ | 204,599 | $ | (611,204 | ) | $ | 87,219 | ||||||
Net income (loss) | (22,995 | ) | 16,173 | 31 | (6,791 | ) | |||||||||
Equity-based incentive compensation | 1,297 | — | 22 | 1,319 | |||||||||||
Profits interest contribution | — | — | 112 | 112 | |||||||||||
Distributions | (15,333 | ) | (16,173 | ) | (967 | ) | (32,473 | ) | |||||||
Proceeds from sale of 3,795,000 common units, net of offering costs of $1.4 million. | 20,967 | — | — | 20,967 | |||||||||||
Proceeds from sale of 71,807 common units pursuant to the Employee Unit Purchase Plan | 348 | — | — | 348 | |||||||||||
Balance, September 30, 2016 | $ | 478,108 | $ | 204,599 | $ | (612,006 | ) | $ | 70,701 |
BLUEKNIGHT ENERGY PARTNERS, L.P. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) | |||||||
Nine Months ended September 30, | |||||||
2015 | 2016 | ||||||
(unaudited) | |||||||
Cash flows from operating activities: | |||||||
Net income (loss) | $ | 23,258 | $ | (6,791 | ) | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||
Provision for uncollectible receivables from third parties | (166 | ) | (13 | ) | |||
Provision for uncollectible receivables from related parties | — | (229 | ) | ||||
Depreciation and amortization | 20,141 | 22,447 | |||||
Amortization of debt issuance costs | 655 | 767 | |||||
Unrealized loss related to interest rate swaps | 2,635 | 886 | |||||
Asset impairment charge | — | 22,845 | |||||
Gain on sale of assets | (6,477 | ) | (85 | ) | |||
Equity-based incentive compensation | 1,459 | 1,319 | |||||
Equity earnings in unconsolidated affiliate | (3,338 | ) | (1,086 | ) | |||
Distributions from unconsolidated affiliate | 3,719 | — | |||||
Gain related to investments | (267 | ) | — | ||||
Changes in assets and liabilities | |||||||
Decrease (increase) in accounts receivable | (867 | ) | 139 | ||||
Decrease (increase) in receivables from related parties | (380 | ) | 811 | ||||
Decrease in prepaid insurance | 2,419 | 2,032 | |||||
Decrease (increase) in other current assets | (138 | ) | 329 | ||||
Decrease (increase) in other assets | (1,262 | ) | 40 | ||||
Increase in accounts payable | (351 | ) | (517 | ) | |||
Increase (decrease) in accrued interest payable | (41 | ) | 28 | ||||
Increase in accrued property taxes | 1,268 | 480 | |||||
Increase (decrease) in unearned revenue | 3,146 | (9 | ) | ||||
Decrease in unearned revenue from related parties | (838 | ) | (688 | ) | |||
Decrease in accrued payroll | (254 | ) | (1,682 | ) | |||
Decrease in other accrued liabilities | (1,127 | ) | (1,110 | ) | |||
Net cash provided by operating activities | 43,194 | 39,913 | |||||
Cash flows from investing activities: | |||||||
Acquisitions | (13,895 | ) | (18,989 | ) | |||
Capital expenditures | (30,044 | ) | (15,643 | ) | |||
Proceeds from sale of assets | 13,540 | 1,488 | |||||
Distributions from unconsolidated affiliate | 316 | — | |||||
Proceeds from sale of investments | 2,346 | — | |||||
Net cash used in investing activities | (27,737 | ) | (33,144 | ) | |||
Cash flows from financing activities: | |||||||
Payment on insurance premium financing agreement | (2,320 | ) | (2,521 | ) | |||
Debt issuance costs | — | (955 | ) | ||||
Borrowings under credit facility | 88,000 | 83,000 | |||||
Payments under credit facility | (72,000 | ) | (74,000 | ) | |||
Proceeds from equity issuance, net of offering costs | 186 | 21,315 | |||||
Capital contribution related to profits interest | 112 | 112 | |||||
Distributions | (30,960 | ) | (32,473 | ) | |||
Net cash used in financing activities | (16,982 | ) | (5,522 | ) | |||
Net increase (decrease) in cash and cash equivalents | (1,525 | ) | 1,247 | ||||
Cash and cash equivalents at beginning of period | 2,661 | 3,038 | |||||
Cash and cash equivalents at end of period | $ | 1,136 | $ | 4,285 | |||
Supplemental disclosure of cash flow information: | |||||||
Increase (decrease) in accounts payable related to purchase of property, plant and equipment | $ | 3,023 | $ | (1,279 | ) | ||
Increase in accrued liabilities related to insurance premium financing agreement | $ | 3,439 | $ | 3,189 |
Three Months ended September 30, | Nine Months ended September 30, | ||||||
2016 | 2016 | ||||||
(in thousands) | |||||||
Beginning balance | $ | 795 | $ | 1,565 | |||
Charged to expense | — | — | |||||
Cash payments | (192 | ) | (962 | ) | |||
Ending balance | $ | 603 | $ | 603 |
December 31, 2015 | September 30, 2016 | ||||||
Balance sheets | |||||||
Current assets | $ | 2,496 | $ | 2,074 | |||
Noncurrent assets | 86,702 | 90,031 | |||||
Total assets | $ | 89,198 | $ | 92,105 | |||
Current liabilities | 2,534 | 1,330 | |||||
Long-term liabilities | 23,194 | 23,119 | |||||
Member’s equity | 63,470 | 67,656 | |||||
Total liabilities and member’s equity | $ | 89,198 | $ | 92,105 |
Three Months ended September 30, | Nine Months ended September 30, | ||||||||||||||
2015 | 2016 | 2015 | 2016 | ||||||||||||
Income statements | |||||||||||||||
Operating revenues | $ | 7,883 | $ | 3,528 | $ | 20,683 | $ | 12,003 | |||||||
Net income | $ | 5,394 | $ | 1,176 | $ | 12,618 | $ | 4,187 |
Estimated Useful Lives (Years) | December 31, 2015 | September 30, 2016 | |||||||
(dollars in thousands) | |||||||||
Land | N/A | $ | 19,680 | $ | 23,234 | ||||
Land improvements | 10-20 | 6,382 | 6,663 | ||||||
Pipelines and facilities | 5-30 | 165,497 | 168,237 | ||||||
Storage and terminal facilities | 10-35 | 251,051 | 262,510 | ||||||
Transportation equipment | 3-10 | 13,728 | 12,152 | ||||||
Office property and equipment and other | 3-20 | 28,453 | 29,287 | ||||||
Pipeline linefill and tank bottoms | N/A | 3,474 | 3,425 | ||||||
Construction-in-progress | N/A | 30,636 | 4,884 | ||||||
Property, plant and equipment, gross | 518,901 | 510,392 | |||||||
Accumulated depreciation | (205,967 | ) | (223,563 | ) | |||||
Property, plant and equipment, net | $ | 312,934 | $ | 286,829 |
• | the maximum permitted consolidated total leverage ratio is 5.00 to 1.00 for the fiscal quarter ending September 30, 2016, and 4.75 to 1.00 for each fiscal quarter thereafter; provided that the maximum permitted consolidated total leverage ratio will be 5.25 to 1.00 for certain quarters based on the occurrence of a specified acquisition (as defined in the Partnership’s credit agreement, but generally being an acquisition for which the aggregate consideration is $15.0 million or more, which will include the acquisition of the nine asphalt terminals from Ergon); and |
• | requires the Partnership and its subsidiaries execute certain account control agreements; |
• | requires that, to the extent (i) the Partnership’s consolidated total leverage ratio as of the end of the prior fiscal quarter was greater than 4.75 to 1.00 and (ii) the Partnership and its subsidiaries have cash and cash equivalents (subject to certain exceptions) exceeding $20.0 million for four consecutive business days, the Partnership prepay the Partnership’s outstanding obligations under the Partnership’s credit agreement in the amount of such excess; and |
• | restricts the Partnership from borrowing funds under the Partnership’s credit agreement if, after giving effect to such borrowing and the prompt use of the proceeds thereof, the Partnership and its subsidiaries would have cash and cash equivalents (subject to certain exceptions) exceeding $20.0 million. |
• | create, issue, incur or assume indebtedness; |
• | create, incur or assume liens; |
• | engage in mergers or acquisitions; |
• | sell, transfer, assign or convey assets; |
• | repurchase the Partnership’s equity, make distributions to unitholders and make certain other restricted payments; |
• | make investments; |
• | modify the terms of certain indebtedness, or prepay certain indebtedness; |
• | engage in transactions with affiliates; |
• | enter into certain hedging contracts; |
• | enter into certain burdensome agreements; |
• | change the nature of the Partnership’s business; |
• | enter into operating leases; and |
• | make certain amendments to the Partnership’s partnership agreement. |
Three Months ended September 30, | Nine Months ended September 30, | ||||||||||||||
2015 | 2016 | 2015 | 2016 | ||||||||||||
Net income (loss) | $ | 13,967 | $ | 11,419 | $ | 23,258 | $ | (6,791 | ) | ||||||
General partner interest in net income | 376 | 341 | 720 | 291 | |||||||||||
Preferred interest in net income | 5,391 | 6,279 | 16,173 | 17,058 | |||||||||||
Income (loss) available to limited partners | $ | 8,200 | $ | 4,799 | $ | 6,365 | $ | (24,140 | ) | ||||||
Basic weighted average number of units: | |||||||||||||||
Common units | 32,947 | 36,036 | 32,919 | 34,139 | |||||||||||
Restricted and phantom units | 721 | 876 | 675 | 799 | |||||||||||
Diluted weighted average number of units: | |||||||||||||||
Common units | 63,875 | 36,036 | 32,919 | 34,139 | |||||||||||
Basic net income (loss) per common unit | $ | 0.24 | $ | 0.13 | $ | 0.19 | $ | (0.69 | ) | ||||||
Diluted net income (loss) per common unit | $ | 0.21 | $ | 0.13 | $ | 0.19 | $ | (0.69 | ) |
Grant Date | Number of Units | Weighted Average Grant Date Fair Value(1) | Grant Date Total Fair Value | |||||||
(in thousands) | ||||||||||
December 2013 | 7,500 | $ | 8.62 | $ | 65 | |||||
December 2014 | 7,500 | 6.43 | 48 | |||||||
December 2015 | 15,120 | 5.06 | 77 |
Grant Date | Number of Units | Weighted Average Grant Date Fair Value(1) | Grant Date Total Fair Value | |||||||
(in thousands) | ||||||||||
March 2014 | 276,773 | $ | 9.06 | $ | 2,508 | |||||
March 2015 | 266,076 | 7.74 | 2,059 | |||||||
March 2016 | 416,131 | 4.77 | 1,985 |
Number of Units | Weighted Average Grant Date Fair Value | |||||
Nonvested at December 31, 2015 | 915,541 | $ | 7.81 | |||
Granted | 416,131 | 4.77 | ||||
Vested | 304,760 | 7.70 | ||||
Forfeited | 97,803 | 6.66 | ||||
Nonvested at September 30, 2016 | 929,109 | $ | 6.60 |
Level 1 | Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. |
Level 2 | Inputs other than quoted prices that are observable for these assets or liabilities, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. |
Level 3 | Unobservable inputs in which there is little market data, which requires the reporting entity to develop its own assumptions. |
Fair Value Measurements as of December 31, 2015 | |||||||||||||||
Description | Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||
Liabilities: | |||||||||||||||
Interest rate swap liabilities | $ | 3,103 | $ | — | $ | 3,103 | $ | — | |||||||
Total | $ | 3,103 | $ | — | $ | 3,103 | $ | — |
Fair Value Measurements as of September 30, 2016 | |||||||||||||||
Description | Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||
Liabilities: | |||||||||||||||
Interest rate swap liabilities | $ | 3,989 | $ | — | $ | 3,989 | $ | — | |||||||
Total | $ | 3,989 | $ | — | $ | 3,989 | $ | — |
Three Months ended September 30, | Nine Months ended September 30, | |||||||||||||||
2015 | 2016 | 2015 | 2016 | |||||||||||||
Asphalt Terminalling Services | ||||||||||||||||
Service revenue | ||||||||||||||||
Third party revenue | $ | 21,307 | $ | 25,217 | $ | 54,934 | $ | 60,656 | ||||||||
Related party revenue | 482 | 242 | 887 | 800 | ||||||||||||
Total revenue for reportable segments | 21,789 | 25,459 | 55,821 | 61,456 | ||||||||||||
Operating expense (excluding depreciation and amortization) | 6,308 | 6,467 | 19,067 | 19,737 | ||||||||||||
Operating margin (excluding depreciation and amortization) | 15,481 | 18,992 | 36,754 | 41,719 | ||||||||||||
Total assets (end of period) | $ | 101,434 | $ | 114,703 | $ | 101,434 | $ | 114,703 | ||||||||
Crude Oil Terminalling and Storage Services | ||||||||||||||||
Service revenue | ||||||||||||||||
Third party revenue | $ | 3,524 | $ | 3,444 | $ | 9,721 | $ | 10,631 | ||||||||
Related party revenue | 3,041 | 2,344 | 9,052 | 7,747 | ||||||||||||
Total revenue for reportable segments | 6,565 | 5,788 | 18,773 | 18,378 | ||||||||||||
Operating expense (excluding depreciation and amortization) | 1,325 | 776 | 4,582 | 3,071 | ||||||||||||
Operating margin (excluding depreciation and amortization) | 5,240 | 5,012 | 14,191 | 15,307 | ||||||||||||
Total assets (end of period) | $ | 73,628 | $ | 74,807 | $ | 73,628 | $ | 74,807 | ||||||||
Crude Oil Pipeline Services | ||||||||||||||||
Service revenue | ||||||||||||||||
Third party revenue | $ | 2,594 | $ | 1,107 | $ | 11,107 | $ | 6,061 | ||||||||
Related party revenue | 3,301 | 1,665 | 8,291 | 4,970 | ||||||||||||
Product sales revenue | ||||||||||||||||
Third party revenue | — | 5,605 | — | 16,058 | ||||||||||||
Total revenue for reportable segments | 5,895 | 8,377 | 19,398 | 27,089 | ||||||||||||
Operating expense (excluding depreciation and amortization) | 4,855 | 3,349 | 13,589 | 11,288 | ||||||||||||
Operating expense (intersegment) | — | 197 | — | 692 | ||||||||||||
Cost of product sales | — | 3,513 | — | 10,789 | ||||||||||||
Cost of product sales (intersegment) | — | — | — | 426 | ||||||||||||
Operating margin (excluding depreciation and amortization) | 1,040 | 1,318 | 5,809 | 3,894 | ||||||||||||
Total assets (end of period) | $ | 192,945 | $ | 151,341 | $ | 192,945 | $ | 151,341 | ||||||||
Crude Oil Trucking and Producer Field Services | ||||||||||||||||
Service revenue | ||||||||||||||||
Third party revenue | $ | 8,935 | $ | 5,832 | $ | 29,110 | $ | 19,363 | ||||||||
Related party revenue | 4,033 | 1,483 | 13,045 | 5,088 | ||||||||||||
Intersegment revenue | — | 197 | — | 692 | ||||||||||||
Product sales revenue | ||||||||||||||||
Intersegment revenue | — | — | — | 426 | ||||||||||||
Total revenue for reportable segments | 12,968 | 7,512 | 42,155 | 25,569 | ||||||||||||
Operating expense (excluding depreciation and amortization) | 12,432 | 7,051 | 40,067 | 23,771 | ||||||||||||
Operating margin (excluding depreciation and amortization) | 536 | 461 | 2,088 | 1,798 | ||||||||||||
Total assets (end of period) | $ | 15,023 | $ | 13,155 | $ | 15,023 | $ | 13,155 | ||||||||
Total operating margin (excluding depreciation and amortization)(1) | $ | 22,297 | $ | 25,783 | $ | 58,842 | $ | 62,718 | ||||||||
Total Segment Revenues | $ | 47,217 | $ | 47,136 | $ | 136,147 | $ | 132,492 | ||||||||
Elimination of Intersegment Revenues | $ | — | $ | (197 | ) | $ | — | $ | (1,118 | ) | ||||||
Consolidated Revenues | $ | 47,217 | $ | 46,939 | $ | 136,147 | $ | 131,374 |
Three Months ended September 30, | Nine Months ended September 30, | ||||||||||||||
2015 | 2016 | 2015 | 2016 | ||||||||||||
Operating margin (excluding depreciation and amortization) | $ | 22,297 | $ | 25,783 | $ | 58,842 | $ | 62,718 | |||||||
Depreciation and amortization | (6,758 | ) | (7,624 | ) | (20,141 | ) | (22,447 | ) | |||||||
General and administrative expenses | (4,742 | ) | (4,865 | ) | (14,386 | ) | (14,447 | ) | |||||||
Asset impairment expense | — | — | — | (22,845 | ) | ||||||||||
Gain on sale of assets | 6,213 | 104 | 6,477 | 85 | |||||||||||
Interest expense | (4,343 | ) | (2,175 | ) | (10,576 | ) | (10,742 | ) | |||||||
Equity earnings in unconsolidated affiliate | 1,399 | 305 | 3,338 | 1,086 | |||||||||||
Income (loss) before income taxes | $ | 14,066 | $ | 11,528 | $ | 23,554 | $ | (6,592 | ) |
Deferred tax assets | |||
Difference in bases of property, plant and equipment | $ | 859 | |
Deferred tax asset | 859 | ||
Less: valuation allowance | 859 | ||
Net deferred tax asset | $ | — |
• | permit the Transactions by amending (i) the definition of Change of Control (as defined in the Credit Agreement) to permit Ergon to purchase all of the membership interests of our general partner and, after such purchase, require Ergon to retain at least 50% of the issued and outstanding voting equity interests of our general partner and (ii) the negative covenant contained in the credit agreement that restricts us from repurchasing the Partnership’s outstanding partnership interests, such that we may repurchase approximately 13,335,390 of the Partnership’s outstanding Series A preferred units simultaneously with the closing of the Transactions; |
• | amend the maximum permitted consolidated total leverage ratio such that |
• | prior to the date on which we issue qualified senior notes (as defined in the credit agreement, but generally being unsecured indebtedness with no required principal payments prior to June 28, 2019) in an aggregate principal amount (when combined with all other qualified senior notes previously or concurrently issued) that equals or exceeds $200.0 million (the “Qualified Senior Notes Date”), the maximum permitted consolidated total leverage ratio will be 5.00 to 1.00 for the fiscal quarter ended September 30, 2016, and 4.75 to 1.00 for each fiscal quarter ending thereafter; provided, that, the maximum permitted consolidated total leverage ratio will be 5.25 to 1.00 for certain quarters based on the occurrence of a specified acquisition (as defined in the credit agreement, but generally being an acquisition for which the aggregate consideration is $15.0 million or more, which will include the acquisition of the nine asphalt terminals from Ergon); |
• | from and after the Qualified Senior Notes Date, the maximum permitted consolidated total leverage ratio will be 5.00 to 1.00; provided, that, the maximum permitted consolidated total leverage ratio will be 5.50 to 1.00 for certain quarters based on the occurrence of a specified acquisition; |
• | require that we and our subsidiaries execute certain account control agreements; |
• | require that, to the extent (i) our consolidated total leverage ratio as of the end of the prior fiscal quarter was greater than 4.75 to 1.00 and (ii) we and our subsidiaries have cash and cash equivalents (subject to certain exceptions) exceeding $20.0 million for four consecutive business days, we prepay the outstanding obligations under the credit agreement in the amount of such excess; and |
• | restrict us from borrowing funds under the credit agreement if, after giving effect to such borrowing and the prompt use of the proceeds thereof, we and our subsidiaries would have cash and cash equivalents (subject to certain exceptions) exceeding $20.0 million. |
• | taxable income projections in future years; |
• | whether the carryforward period is so brief that it would limit realization of tax benefits; |
• | future revenue and operating cost projections that will produce more than enough taxable income to realize the deferred tax asset based on existing service rates and cost structures; and |
• | our earnings history exclusive of the loss that created the future deductible amount coupled with evidence indicating that the loss is an aberration rather than a continuing condition. |
Operating Results | Three Months ended September 30, | Nine Months ended September 30, | Favorable/(Unfavorable) | |||||||||||||||||||||||||||
Three Months | Nine Months | |||||||||||||||||||||||||||||
(dollars in thousands) | 2015 | 2016 | 2015 | 2016 | $ | % | $ | % | ||||||||||||||||||||||
Operating Margin, excluding depreciation and amortization: | ||||||||||||||||||||||||||||||
Asphalt terminalling services operating margin | $ | 15,481 | $ | 18,992 | $ | 36,754 | $ | 41,719 | $ | 3,511 | 23 | % | $ | 4,965 | 14 | % | ||||||||||||||
Crude oil terminalling and storage operating margin | 5,240 | 5,012 | 14,191 | 15,307 | (228 | ) | (4 | )% | 1,116 | 8 | % | |||||||||||||||||||
Crude oil pipeline services operating margin | 1,040 | 1,318 | 5,809 | 3,894 | 278 | 27 | % | (1,915 | ) | (33 | )% | |||||||||||||||||||
Crude oil trucking and producer field services operating margin | 536 | 461 | 2,088 | 1,798 | (75 | ) | (14 | )% | (290 | ) | (14 | )% | ||||||||||||||||||
Total operating margin, excluding depreciation and amortization | 22,297 | 25,783 | 58,842 | 62,718 | 3,486 | 16 | % | 3,876 | 7 | % | ||||||||||||||||||||
Depreciation and amortization | (6,758 | ) | (7,624 | ) | (20,141 | ) | (22,447 | ) | (866 | ) | (13 | )% | (2,306 | ) | (11 | )% | ||||||||||||||
General and administrative expense | (4,742 | ) | (4,865 | ) | (14,386 | ) | (14,447 | ) | (123 | ) | (3 | )% | (61 | ) | — | % | ||||||||||||||
Asset impairment expense | — | — | — | (22,845 | ) | — | N/A | (22,845 | ) | N/A | ||||||||||||||||||||
Gain on sale of assets | 6,213 | 104 | 6,477 | 85 | (6,109 | ) | (98 | )% | (6,392 | ) | (99 | )% | ||||||||||||||||||
Operating income | 17,010 | 13,398 | 30,792 | 3,064 | (3,612 | ) | (21 | )% | (27,728 | ) | (90 | )% | ||||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||||||
Equity earnings in unconsolidated entity | 1,399 | 305 | 3,338 | 1,086 | (1,094 | ) | (78 | )% | (2,252 | ) | (67 | )% | ||||||||||||||||||
Interest expense | (4,343 | ) | (2,175 | ) | (10,576 | ) | (10,742 | ) | 2,168 | 50 | % | (166 | ) | (2 | )% | |||||||||||||||
Income tax expense | (99 | ) | (109 | ) | (296 | ) | (199 | ) | (10 | ) | (10 | )% | 97 | 33 | % | |||||||||||||||
Net income (loss) | $ | 13,967 | $ | 11,419 | $ | 23,258 | $ | (6,791 | ) | $ | (2,548 | ) | (18 | )% | $ | (30,049 | ) | (129 | )% |
Operating results | Three Months ended September 30, | Nine Months ended September 30, | Favorable/(Unfavorable) | |||||||||||||||||||||||||||
Three Months | Nine Months | |||||||||||||||||||||||||||||
(dollars in thousands) | 2015 | 2016 | 2015 | 2016 | $ | % | $ | % | ||||||||||||||||||||||
Service Revenue: | ||||||||||||||||||||||||||||||
Third Party Revenue | $ | 21,307 | $ | 25,217 | $ | 54,934 | $ | 60,656 | $ | 3,910 | 18 | % | $ | 5,722 | 10 | % | ||||||||||||||
Related Party Revenue | 482 | 242 | 887 | 800 | (240 | ) | (50 | )% | (87 | ) | (10 | )% | ||||||||||||||||||
Total Revenue | 21,789 | 25,459 | 55,821 | 61,456 | 3,670 | 17 | % | 5,635 | 10 | % | ||||||||||||||||||||
Operating Expense (excluding depreciation and amortization) | 6,308 | 6,467 | 19,067 | 19,737 | (159 | ) | (3 | )% | (670 | ) | (4 | )% | ||||||||||||||||||
Operating Margin (excluding depreciation and amortization) | $ | 15,481 | $ | 18,992 | $ | 36,754 | $ | 41,719 | $ | 3,511 | 23 | % | $ | 4,965 | 14 | % |
• | Third party revenues increased for the three and nine months ended September 30, 2016, as compared to the three and nine months ended September 30, 2015, primarily as a result of the acquisition of one asphalt terminalling facility in May 2015 and two asphalt terminalling facilities in February 2016 as well as annual contract fee escalations and increased throughput at our terminals. |
• | Related party revenues decreased for the three and nine months ended September 30, 2016 and 2015, primarily due to an additional storage tank that was utilized by Vitol on a short-term basis beginning in the second quarter of 2015 through the second quarter of 2016. |
Operating results | Three Months ended September 30, | Nine Months ended September 30, | Favorable/(Unfavorable) | |||||||||||||||||||||||||||
Three Months | Nine Months | |||||||||||||||||||||||||||||
(dollars in thousands) | 2015 | 2016 | 2015 | 2016 | $ | % | $ | % | ||||||||||||||||||||||
Service Revenue: | ||||||||||||||||||||||||||||||
Third Party Revenue | $ | 3,524 | $ | 3,444 | $ | 9,721 | $ | 10,631 | $ | (80 | ) | (2 | )% | $ | 910 | 9 | % | |||||||||||||
Related Party Revenue | 3,041 | 2,344 | 9,052 | 7,747 | (697 | ) | (23 | )% | (1,305 | ) | (14 | )% | ||||||||||||||||||
Total Revenue | 6,565 | 5,788 | 18,773 | 18,378 | (777 | ) | (12 | )% | (395 | ) | (2 | )% | ||||||||||||||||||
Operating Expense (excluding depreciation and amortization) | 1,325 | 776 | 4,582 | 3,071 | 549 | 41 | % | 1,511 | 33 | % | ||||||||||||||||||||
Operating Margin (excluding depreciation and amortization) | $ | 5,240 | $ | 5,012 | $ | 14,191 | $ | 15,307 | $ | (228 | ) | (4 | )% | $ | 1,116 | 8 | % | |||||||||||||
Average crude oil stored per month at our Cushing terminal (in thousands of barrels) | 5,532 | 5,604 | 5,289 | 5,620 | 72 | 1 | % | 331 | 6 | % | ||||||||||||||||||||
Average crude oil delivered to our Cushing terminal (in thousands of barrels per day) | 122 | 69 | 119 | 83 | (53 | ) | (43 | )% | (36 | ) | (30 | )% |
• | Third party revenues increased for the nine months ended September 30, 2016, compared to the same period in 2015 in connection with storage contract renewals. As contracts were expiring early in 2014, the rates at which we recontracted storage at the Cushing Interchange were impacted by a backwardated market for West Texas Intermediate crude which led to a decrease in average rates. However, in the fourth quarter of 2014, the market for West Texas Intermediate crude oil returned to contango in which future prices are higher than current prices. This has increased demand for storage services at the Cushing Interchange, resulting in an upward trend in storage rates. Due to the timing of the expiration of historical contracts and the execution of new storage contracts, the overall impact of the increase in storage rates began in the second quarter of 2015, and, as a result, third party revenues for the nine months ended September 30, 2016 have increased. |
• | Related party revenues decreased for both periods due to the cancellation of the Operating and Maintenance agreement related to Vitol’s crude oil terminal located in Midland, Texas in the third quarter of 2015 and due to a reduction in the total storage capacity leased by Vitol in the comparative periods. |
• | As of October 28, 2016, we had approximately 6.0 million barrels of crude oil storage under service contracts with remaining terms of up to 60 months, including 0.5 million barrels of crude oil storage contracts that expire in 2016 and an additional 1.9 million barrels of crude oil contracts that expire in 2017. Storage contracts with Vitol represent 2.4 million barrels of crude oil storage capacity under contract. |
• | Operating expenses for the three and nine months ended September 30, 2016, decreased as compared to the three and nine months ended September 30, 2015, primarily as a result of decreases in utilities expense, as well as a decrease in compensation expense due to our no longer operating the Vitol Midland terminal. |
Operating results | Three Months ended September 30, | Nine Months ended September 30, | Favorable/(Unfavorable) | |||||||||||||||||||||||||||
Three Months | Nine Months | |||||||||||||||||||||||||||||
(dollars in thousands) | 2015 | 2016 | 2015 | 2016 | $ | % | $ | % | ||||||||||||||||||||||
Service revenue: | ||||||||||||||||||||||||||||||
Third Party Revenue | $ | 2,594 | $ | 1,107 | $ | 11,107 | $ | 6,061 | $ | (1,487 | ) | (57 | )% | $ | (5,046 | ) | (45 | )% | ||||||||||||
Related Party Revenue | 3,301 | 1,665 | 8,291 | 4,970 | (1,636 | ) | (50 | )% | (3,321 | ) | (40 | )% | ||||||||||||||||||
Product sales revenue: | ||||||||||||||||||||||||||||||
Third Party Revenue | — | 5,605 | — | 16,058 | 5,605 | N/A | 16,058 | N/A | ||||||||||||||||||||||
Total Revenue | 5,895 | 8,377 | 19,398 | 27,089 | 2,482 | 42 | % | 7,691 | 40 | % | ||||||||||||||||||||
Operating Expense (excluding depreciation and amortization) | 4,855 | 3,349 | 13,589 | 11,288 | 1,506 | 31 | % | 2,301 | 17 | % | ||||||||||||||||||||
Operating Expense (intersegment) | — | 197 | — | 692 | (197 | ) | N/A | (692 | ) | N/A | ||||||||||||||||||||
Cost of Product Sales | — | 3,513 | — | 10,789 | (3,513 | ) | N/A | (10,789 | ) | N/A | ||||||||||||||||||||
Cost of Product Sales (intersegment) | — | — | — | 426 | — | N/A | (426 | ) | N/A | |||||||||||||||||||||
Operating Margin (excluding depreciation and amortization) | $ | 1,040 | $ | 1,318 | $ | 5,809 | $ | 3,894 | $ | 278 | 27 | % | $ | (1,915 | ) | (33 | )% | |||||||||||||
Average throughput volume (in thousands of barrels per day) | ||||||||||||||||||||||||||||||
Mid-Continent | 42 | 18 | 35 | 29 | (24 | ) | (57 | )% | (6 | ) | (17 | )% | ||||||||||||||||||
East Texas | 14 | 10 | 16 | 11 | (4 | ) | (29 | )% | (5 | ) | (31 | )% |
• | Service revenues decreased for the nine months ended September 30, 2016, compared to the same period in 2015 due to the expiration of an increased tariff that was being charged from June 2014 through May 2015 on certain barrels transported on our East Texas pipeline system under a throughput and deficiency agreement. The tariff returned to a lower rate in June of 2015, which decreased the service revenues generated on the East Texas pipeline system by $4.6 million when comparing the nine months ended September 30, 2016, to the same period in 2015. |
• | In addition, in late April 2016, as a precautionary measure we suspended service on our Mid-Continent pipeline system due to a discovery of a pipeline exposure caused by recent heavy rains and the erosion of a riverbed in southern Oklahoma. There was no damage to the pipe and no loss of product. In the second quarter of 2016, we took action to mitigate the service suspension and worked with customers to divert volumes, and, in certain circumstances, transported volumes to a third-party pipeline system via truck. In addition, the term of the throughput and deficiency agreement on our Eagle North system expired at June 30, 2016, and in July of 2016 we completed a connection of the southeastern most portion of our Mid-Continent pipeline system to our Eagle North system and concurrently reversed the Eagle North system. This enabled us to recapture diverted volumes and deliver those barrels to Cushing, Oklahoma. As a result, we are currently operating one Oklahoma mainline system, which is a combination of both the |
• | Product sales revenues increased for the three and nine months ended September 30, 2016, compared to the same period in 2015 due to our acquisition of the Red River pipeline in November 2015. In conjunction with our acquisition of the Red River pipeline, we began marketing crude oil that we purchase at production leases. Revenue from this activity is reflected in product sales revenue. In addition to the marketing revenue, we also had $1.6 million and $3.2 million in sales of crude oil arising from product loss allowances in the three and nine months ended September 30, 2016. There were no such sales of crude oil arising from product loss allowances in the three and nine months ended September 30, 2015. |
• | Cost of product sales incurred for the three and nine months ended September 30, 2016, represent the cost of the marketed crude oil barrels transported on the Red River pipeline that was acquired in November 2015. |
• | Operating expenses have decreased primarily as a result of decreases in maintenance and repair and compensation expenses. |
Operating results | Three Months ended September 30, | Nine Months ended September 30, | Favorable/(Unfavorable) | |||||||||||||||||||||||||||
Three Months | Nine Months | |||||||||||||||||||||||||||||
(dollars in thousands) | 2015 | 2016 | 2015 | 2016 | $ | % | $ | % | ||||||||||||||||||||||
Service revenue: | ||||||||||||||||||||||||||||||
Third Party Revenue | $ | 8,935 | $ | 5,832 | $ | 29,110 | $ | 19,363 | $ | (3,103 | ) | (35 | )% | $ | (9,747 | ) | (33 | )% | ||||||||||||
Related Party Revenue | 4,033 | 1,483 | 13,045 | 5,088 | (2,550 | ) | (63 | )% | (7,957 | ) | (61 | )% | ||||||||||||||||||
Intersegment Revenue | — | 197 | — | 692 | 197 | N/A | 692 | N/A | ||||||||||||||||||||||
Product sales revenue: | ||||||||||||||||||||||||||||||
Intersegment Revenue | — | — | — | 426 | — | N/A | 426 | N/A | ||||||||||||||||||||||
Total Revenue | 12,968 | 7,512 | 42,155 | 25,569 | (5,456 | ) | (42 | )% | (16,586 | ) | (39 | )% | ||||||||||||||||||
Operating Expense (excluding depreciation and amortization) | 12,432 | 7,051 | 40,067 | 23,771 | 5,381 | 43 | % | 16,296 | 41 | % | ||||||||||||||||||||
Operating Margin (excluding depreciation and amortization) | $ | 536 | $ | 461 | $ | 2,088 | $ | 1,798 | $ | (75 | ) | (14 | )% | $ | (290 | ) | (14 | )% | ||||||||||||
Average volume (in thousands of barrels per day) | 52 | 25 | 54 | 28 | (27 | ) | (52 | )% | (26 | ) | (48 | )% |
• | Operating margin (excluding depreciation and amortization) decreased for the three and nine months ended September 30, 2016, compared to the three and nine months ended September 30, 2015 primarily as a result of declining crude oil prices and production volumes in the areas we serve. We continue to experience downward rate pressure in our trucking and producer field services business as producers and marketers attempt to renegotiate service rates to preserve their operating margins in the changing market. In addition, during the second half of 2015, our West Texas operating margins and transported volumes were negatively impacted by increased competition from transporters |
Nine Months ended September 30, | |||||||
2015 | 2016 | ||||||
(in millions) | |||||||
Net cash provided by operating activities | $ | 43.2 | $ | 39.9 | |||
Net cash used in investing activities | $ | (27.7 | ) | $ | (33.1 | ) | |
Net cash used in financing activities | $ | (17.0 | ) | $ | (5.5 | ) |
• | maintenance capital expenditures, which are capital expenditures made to maintain the existing integrity and operating capacity of our assets and related cash flows, further extending the useful lives of the assets; and |
• | expansion capital expenditures, which are capital expenditures made to expand or to replace partially or fully depreciated assets or to expand the operating capacity or revenue of existing or new assets, whether through construction, acquisition or modification. |
Payments Due by Period | |||||||||||||||
Contractual Obligations | Total | Less than 1 year | 1-3 years | 4-5 years | More than 5 years | ||||||||||
(in millions) | |||||||||||||||
Debt obligations(1) | $ | 271.1 | 9.8 | 261.3 | — | — | |||||||||
Operating lease obligations | $ | 17.5 | 5.3 | 7.9 | 2.8 | 1.5 |
(1) | Represents required future principal repayments of borrowings of $254.0 million and variable rate interest payments of $17.1 million. All amounts outstanding under our credit agreement mature in June 2018. For our variable-rate debt, we calculated interest obligations assuming the weighted-average interest rate of our variable-rate debt at September 30, 2016 on amounts outstanding through the assumed repayment date. |
BLUEKNIGHT ENERGY PARTNERS, L.P. | |||
By: | Blueknight Energy Partners, G.P., L.L.C | ||
its General Partner | |||
Date: | November 2, 2016 | By: | /s/ Alex G. Stallings |
Alex G. Stallings | |||
Chief Financial Officer and Secretary | |||
Date: | November 2, 2016 | By: | /s/ James R. Griffin |
James R. Griffin | |||
Chief Accounting Officer |
Exhibit Number | Exhibit Name | |
2.1 | Contribution Agreement, dated July 19, 2016 among Blueknight Energy Partners, L.P., Blueknight Terminal Holding, L.L.C., Ergon Asphalt & Emulsions, Inc., Ergon Terminaling, Inc. and Ergon Asphalt Holdings, LLC (filed as Exhibit 2.1 to the Partnership’s Current Report on Form 8-K, filed July 20, 2016, and incorporated herein by reference). | |
3.1 | Amended and Restated Certificate of Limited Partnership of the Partnership, dated November 19, 2009 but effective as of December 1, 2009 (filed as Exhibit 3.1 to the Partnership’s Current Report on Form 8-K, filed November 25, 2009, and incorporated herein by reference). | |
3.2 | Fourth Amended and Restated Agreement of Limited Partnership of the Partnership, dated September 14, 2011 (filed as Exhibit 3.1 to the Partnership’s Current Report on Form 8-K, filed September 14, 2011, and incorporated herein by reference). | |
3.3 | Amended and Restated Certificate of Formation of the General Partner, dated November 20, 2009 but effective as of December 1, 2009 (filed as Exhibit 3.2 to the Partnership’s Current Report on Form 8-K, filed November 25, 2009, and incorporated herein by reference). | |
3.4 | Second Amended and Restated Limited Liability Company Agreement of the General Partner, dated December 1, 2009 (filed as Exhibit 3.2 to the Partnership’s Current Report on Form 8-K, filed December 7, 2009, and incorporated herein by reference). | |
4.1 | Registration Rights Agreement, dated October 5, 2016 by and among Blueknight Energy Partners, L.P., Ergon Asphalt & Emulsions, Inc., Ergon Terminaling, Inc. and Ergon Asphalt Holdings, LLC (filed as Exhibit 4.1 to the Partnership’s Current Report on Form 8-K, filed October 5, 2016, and incorporated herein by reference). | |
10.1 | Preferred Unit Repurchase Agreement, dated July 19, 2016 among Blueknight Energy Partners, L.P., CB-Blueknight, LLC and Blueknight Energy Holding, Inc. (filed as Exhibit 10.1 to the Partnership’s Current Report on Form 8-K, filed July 20, 2016, and incorporated herein by reference). | |
10.2 | Second Amendment to Amended and Restated Credit Agreement, dated July 19, 2016 among Blueknight Energy Partners, L.P., Wells Fargo Bank, National Association as Administrative Agent and the several lenders from time to time thereto (filed as Exhibit 10.2 to the Partnership’s Current Report on Form 8-K, filed July 20, 2016, and incorporated herein by reference). | |
10.3 | Third Amendment to Crude Oil Storage Services Agreement, dated August 12, 2016 but effective as of May 1, 2017 (filed as Exhibit 10.1 to the Partnership’s Current Report on Form 8-K, filed August 19, 2016, and incorporated herein by reference). | |
10.4 | Storage, Throughput and Handling Agreement, dated October 5, 2016 by and among BKEP Materials, L.L.C., BKEP Terminalling, L.L.C., BKEP Asphalt, L.L.C., and Ergon Asphalt & Emulsions, Inc. (filed as Exhibit 10.1 to to the Partnership’s Current Report on Form 8-K, filed October 5, 2016, and incorporated herein by reference). | |
10.5 | Omnibus Agreement, dated October 5, 2016 by and among Ergon Asphalt & Emulsions, Inc., Blueknight Energy Partners G.P., L.L.C., Blueknight Energy Partners, L.P., Blueknight Terminalling, L.L.C., BKEP Materials, L.L.C. and BKEP Asphalt, L.L.C. (filed as Exhibit 10.2 to to the Partnership’s Current Report on Form 8-K, filed October 5, 2016, and incorporated herein by reference). | |
10.6* | Facilities Lease Agreement, dated May 18, 2009 by and between BKEP Materials, L.L.C, BKEP Asphalt, L.L.C and Ergon Asphalt & Emulsions, Inc. | |
10.7* | Master Facilities Lease Agreement, dated November 11, 2010 by and between BKEP Materials, L.L.C, BKEP Asphalt, L.L.C and Ergon Asphalt & Emulsions, Inc. | |
10.8 | Second Amendment to Master Facilities Lease Agreement, dated July 2, 2012 by and between BKEP Materials, L.L.C, BKEP Asphalt, L.L.C and Ergon Asphalt & Emulsions, Inc. | |
31.1* | Certifications of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2* | Certifications of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1# | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C., Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Pursuant to SEC Release 34-47551, this Exhibit is furnished to the SEC and shall not be deemed to be “filed.” |
101* | The following financial information from Blueknight Energy Partners, L.P.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2016, formatted in XBRL (eXtensible Business Reporting Language): (i) Document and Entity Information; (ii) Unaudited Condensed Consolidated Balance Sheets as of December 31, 2015 and September 30, 2016; (iii) Unaudited Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2015 and 2016; (iv) Unaudited Condensed Consolidated Statement of Changes in Partners’ Capital for the nine months ended September 30, 2016; (v) Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2015 and 2016; and (vi) Notes to Unaudited Condensed Consolidated Financial Statements. |
LESSOR: | |||
SEMMATERIALS ENERGY PARTNERS, L.L.C. | |||
By: | /s/ Alex Stallings | ||
Name: | Alex Stallings | ||
Title: | CFO | ||
SGLP ASPHALT, L.L.C. | |||
By: | /s/ Alex Stallings | ||
Name: | Alex Stallings | ||
Title: | CFO | ||
LESSEE: | |||
ERGON ASPHALT & EMULSIONS, INC. | |||
By: | /s/ J. Baxter Burns | ||
Name: | J. Baxter Burns, II | ||
Title: | Executive Vice President |
16. | South 14 degrees 41 minutes 27 seconds West 99.99 feet to a bent pipe, a corner of New Penn Motor Express and Giorgio Foods, Inc. |
3. | South 88 degrees 36 minutes 36 seconds West 249.80 feet to a point in the pavement of Pottsville Pike. |
LITTLE ROCK, AR TRAILER LIST 9/15/2008 | ||||
Year & Model | Vin Number | Trailer Number | ||
1 | LITTLE ROCK, AR | 1990 ETNYRE TRAILER | 1E9T44200L3007009 | 661 |
2 | LITTLE ROCK, AR | 1990 ETNYRE TRAILER | 1E9T44206LE007001 | 2073 |
3 | LITTLE ROCK, AR | 1990 ETNYRE TRAILER | 1E9T44208LE007002 | 2075 |
4 | LITTLE ROCK, AR | 1990 ETNYRE TRAILER | 1E9T4420XLE007003 | 2077 |
5 | LITTLE ROCK, AR | 1990 ETNYRE ASPHALT TRAILER | 1E9T44204LE007126 | 35121 |
6 | LITTLE ROCK, AR | 1980 TRAILMOBILE TRAILER | 1PTT43EJ7A4000060 | 2328 |
7 | LITTLE ROCK, AR | 1980 TRAILMOBILE TRAILER | V41268 | 2329 |
8 | LITTLE ROCK, AR | 1978 TRIM-T43 | T431T40545 | 4087 |
9 | LITTLE ROCK, AR | 1983 POLAR TRAILER | 1PMC14229D2006188 | 36501 |
10 | LITTLE ROCK, AR | 1983 POLAR TRAILER | 1PMC14222D2006193 | 36509 |
11 | LITTLE ROCK, AR | 1986 POLAR TRAILER | 1PMC14221G2007615 | 36515 |
12 | LITTLE ROCK, AR | 1987 POLAR TRAILER | 1PMC14228H2008178 | 36521 |
13 | LITTLE ROCK, AR | 1987 POLAR TRAILER | 1PMC14226H2008180 | 36525 |
14 | LITTLE ROCK, AR | 1987 POLAR TRAILER | 1PMC14224H2008615 | 36529 |
15 | LITTLE ROCK, AR | 1978 TRAILMOBILE TRAILER | S41323 | 4927 |
16 | LITTLE ROCK, AR | 1987 AMERICAN | 1PMC1422XH2008179 | 36523 |
17 | LITTLE ROCK, AR | 1987 HARMON | 1H9TT4229HL020132 | 36531 |
18 | LITTLE ROCK, AR | 1976 OMX | OMX724901 | 5699 |
19 | LITTLE ROCK, AR | 1969 MCCOY TA TRAILER | W2180 | 2085 |
20 | LITTLE ROCK, AR | 1971 FRUEHAUF TRAILER | OMN557509 | 4049 |
21 | LITTLE ROCK, AR | 1990 TRAILMOBILE TRAILER | V40471 | 36435 |
22 | LITTLE ROCK, AR | 1982 TRAILMOBILE TRAILER | 1PTT23EJ2C4000122 | 4705 |
23 | LITTLE ROCK, AR | 1979 TRAILMOBILE TRAILER | T41002 | 36535 |
24 | LITTLE ROCK, AR | 1992 FRUEHAUS | 1H4T04423N6025415 | 211 |
25 | LITTLE ROCK, AR | 1986 FRUEHAUS | 1H4T04222GK022209 | 103 |
26 | LITTLE ROCK, AR | 2001 ACRO | 1A9114227110005056 | 107 |
27 | LITTLE ROCK, AR | 2001 ACRO | 1A911422911005057 | 109 |
UNIT# | MAKE | SERIAL # |
35111 | Etnyre | 1E9T43206VE007092 |
15814 | Freuhauf | 1H4T04124EKO13302 |
15947 | Freuhauf | 1H4TO4224FKO16801 |
15948 | Freuhauf | 1H4TO4226FKO16802 |
15949 | Freuhauf | 1H4TO4228FKO16803 |
15950 | Freuhauf | 1H4TO422XFK016804 |
25017 | Freuhauf | 1H4TO422XGX013502 |
25019 | Freuhauf | 1H4TO4223GK013504 |
25075 | Freuhauf | 1H4TO4421HL013803 |
25076 | Freuhauf | 1H4TO4423HL013804 |
25218 | Etnyre | 1E9T42230EJE007037 |
25219 | Etnyre | 1E9T42205JE007038 |
25293 | Etnyre | 1E9T42201KE007037 |
25345 | Freuhauf | UNX538402 |
25351 | Freuhauf | UNY559604 |
25387 | Etnyre | 1E9T42202LE007128 |
25430 | Etnyre | 1E9T42204ME007052 |
25675 | Etnrye | 1E9T43209NE007118 |
15921 | Freuhauf | 1H4TO4225FK008304 |
15359 | Etnyre | K2617-K9202 |
25295 | Etnyre | 1E9T42205KE007039 |
Title | Physical Location | ||||
Vehicle | 2008 | CHEV | TRAILBLAZER | 1GNDT13S382174521 | Billings |
Vehicle | 2008 | CHEV | TRAILBLAZER | 1GNDT13S182219035 | Boise |
Vehicle | 2008 | CHEV | TRAILBLAZER | 1GNDT13S682182998 | Commerce City |
Vehicle | 2008 | CHEV | TRAILBLAZER | 1GNDS13S982194565 | Denver |
Vehicle | 2008 | CHEV | SILVERADO 1500 | 2GCEC130081223170 | Fontana |
Paver | Paver | CAT | AP-655C, 8'-16' exter | AYP000305 | Fontana, CA |
Vehicle | 2008 | CHEV | TRAILBLAZER | 1GNDT13S882122947 | Gloucester City |
Vehicle | 2008 | CHEV | TRAILBLAZER | 1GNDT13S182222078 | Halstead |
Vehicle | 2008 | CHEV | TRAILBLAZER | 1GNDT13S182116536 | Halstead |
Vehicle | 2008 | CHEV | SILVERADO 1500 | 2GCEK13M081221389 | Las Vegas |
Extruder | Full scale extruder with ancillary suppc | Leistritz | Muskogee, OK | ||
Vehicle | 2007 | CHEV | SILVERADO 1500 | 3GCEK13M17G526292 | N. Salt Lake |
Vehicle | 2005 | FORD | EXPLORER | 1FMZU72K65ZA07665 | N. Salt Lake |
Vehicle | 2008 | CHEV | TRAILBLAZER | 1GNDT13S382189911 | Olathe |
Vehicle | 2008 | CHEV | TRAILBLAZER | 1GNDT13S982178864 | Olathe |
Vehicle | 2008 | CHEV | SILVERADO 1500 | 3GCEK13J98G265906 | Olathe |
Vehicle | 2006 | CHEV | TRAILBLAZER | 1GNDT13SX62217054 | Reading |
1999 Freighllner | Used with ArmorAll | Freighliner | 1999 | 1FUYDZVB7XPB00028 | Sedalia, MO |
Vehicle | 2008 | CHEV | TRAILBLAZER | 1GNDT13S982217274 | South Portland |
Vehicle | 2008 | CHEV | SILVERADO 1500 | 3GCEK13J78G265774 | Spokane |
Vehicle | 2008 | CHEV | TRAILBLAZER | 1GNDT13S782120557 | Springfield |
Vehicle | 2008 | CHEV | TRAILBLAZER | 1GNDT13SX82219728 | Springfield |
Vehicle | 2008 | CHEV | TRAILBLAZER | 1GNDT13S682117388 | Springfield |
ArmorAll paver | Development unit | Etnyre | Woods Cross, UT | ||
ArmorAll trailer | Lowboy Equipment Trailer | Etnyre | 1E92820173E111013 | Woods Cross, UT | |
Trailer | Trailer for ArmorAll production unit | Twamco | 1T9FN533X81473001 | Woods Cross, UT | |
Trailer for paver | Trailer for CAT paver | Twamco | 655C | 1T9GN573281473004 | Woods Cross, UT |
Windrow pick-up machine | Windrow pick-up machine | Werner | E650 | E650023 | Woods Cross, UT |
ArmorAll support unit | Etnyre Material Transfer trailer modifie | Etnyre | 1E9V111332E111195 | Woods Cross, UT | |
ArmorAll support unit | Etnyre Material Transfer trailer modifie | Etnyre | 1E9V112063E111004 | Woods Cross, UT | |
ArmorAll support unit | Etnyre Material Transfer trailer | Etnyre | 1E9V111522E111206 | Woods Cross, UT | |
Tandem axle utility trailer | Utility trailer | Titan | Year 2003 | 5DZC6142431002934 | Woods Cross, UT |
NewCo | Transfer to SGLP | Asset Description | Profit Location | City | Cost Center | Asset Account | Cost | Depreciation | Depreciation Reserve | NBV at Period End | Asset Category | Major Category |
NO | 1973 OR 1978 ETNYRE TRAILER | 0085 | PARSONS | 70101 | 15000600 | 7,500.00 | * | 1,500.00 | 6,000.00 | VEHICLES.TRAILERS.NONINDIAN.0000 | VEHICLES | |
NO | 1978 TRAILMOBILE TRAILER | 0086 | PARSONS | 70101 | 15000600 | 7,500.00 | * | 1,500.00 | 6,000.00 | VEHICLES.TRAILERS.NONINDIAN.0000 | VEHICLES | |
NO | 1978 TRAILMOBILE TRAILER | 0086 | PARSONS | 70101 | 15000600 | 7,500.00 | * | 1,500.00 | 6,000.00 | VEHICLES.TRAILERS.NONINDIAN.0000 | VEHICLES | |
NO | 1977 TRAILMOBILE TRAILER | 0086 | PARSONS | 70101 | 15000600 | 7,500.00 | * | 1,500.00 | 6,000.00 | VEHICLES.TRAILERS.NONINDIAN.0000 | VEHICLES | |
NO | 1977 TRAILMOBILE TRAILER | 0086 | PARSONS | 70101 | 15000600 | 7,500.00 | * | 1,500.00 | 6,000.00 | VEHICLES.TRAILERS.NONINDIAN.0000 | VEHICLES | |
NO | 1975 ETNYRE TRAILER | 0086 | PARSONS | 70101 | 15000600 | 7,500.00 | * | 1,500.00 | 6,000.00 | VEHICLES.TRAILERS.NONINDIAN.0000 | VEHICLES | |
NO | 1973 BUTLER TRAILER | 0086 | PARSONS | 70101 | 15000600 | 7,500.00 | * | 1,500.00 | 6,000.00 | VEHICLES.TRAILERS.NONINDIAN.0000 | VEHICLES | |
NO | BUILDING MODIFICATIONS FOR EXTRUDER | 0701 | TULSA | 70100 | 15000300 | 70,508.00 | * | * | 70,508.00 | BUILDING.NONE.INDIANPROP.00000 | BUILDING | |
NO | MSDS AUTHORING | 0701 | TULSA | 70100 | 15000700 | 158.589.08 | * | 158,569.08 | CMPTSOFTWR.NON.NONINDIAN.0000 | CMPTSOFTWR | ||
NO | TRAILER CONTROL | 0701 | SALT LAKE | 70332 | 15000400 | 1,198.20 | * | 159.76 | 1,038.44 | MACHEQUIP.NON.NONINDIAN.0000 | MACHEQUIP | |
NO | TRAILER CONTROL | 0701 | SALT LAKE | 70332 | 15000400 | 1,198.20 | * | 159.76 | 1,038.45 | MACHEQUIP.NON.NONINDIAN.0000 | MACHEQUIP | |
NO | POLAR TANK TRAILER | 0725 | BOISE | 70101 | 15000600 | * | * | * | * | VEHICLES.TRAILERS.NONINDIAN.0000 | VEHICLES | |
NO | POLAR TANK TRAILER | 0725 | BOISE | 70101 | 15000600 | * | * | * | * | VEHICLES.TRAILERS.NONINDIAN.0000 | VEHICLES | |
NO | POLAR TANK TRAILER | 0725 | BOISE | 70101 | 15000600 | * | * | * | * | VEHICLES.TRAILERS.NONINDIAN.0000 | VEHICLES | |
NO | POLAR TANK TRAILER | 0725 | BOISE | 70101 | 15000600 | * | * | * | * | VEHICLES.TRAILERS.NONINDIAN.0000 | VEHICLES | |
NO | PICKUP TRAILER 7502 | 0728 | SPOKANE | 70101 | 15000600 | 4,054.73 | * | 946.10 | 3,108.63 | VEHICLES.TRAILERS.NONINDIAN.0000 | VEHICLES | |
NO | PU TRAILER C7-100 | 0728 | SPOKANE | 70101 | 15000600 | 4,002.50 | * | 867.21 | 3,135.29 | VEHICLES.TRAILERS.NONINDIAN.0000 | VEHICLES | |
NO | FREIGHT-POLAR TANK TRAILER | 0728 | SPOKANE | 70101 | 15000600 | 1,539.56 | * | 282.25 | 1,257.31 | VEHICLES.TRAILERS.NONINDIAN.0000 | VEHICLES | |
NO | FREIGHT-POLAR TANK TRAILER | 0728 | SPOKANE | 70101 | 15000600 | 1,539.56 | * | 282.25 | 1,257.31 | VEHICLES.TRAILERS.NONINDIAN.0000 | VEHICLES | |
NO | FREIGHT-POLAR TANK TRAILER | 0728 | SPOKANE | 70101 | 15000600 | 1,539.56 | * | 256.59 | 1,282.97 | VEHICLES.TRAILERS.NONINDIAN.0000 | VEHICLES | |
NO | FREIGHT-POLAR TANK TRAILER | 0728 | SPOKANE | 70101 | 15000600 | 1,539.56 | * | 256.59 | 1,283.00 | VEHICLES.TRAILERS.NONINDIAN.0000 | VEHICLES | |
NO | 1978 BEALL TANKER TRAILER | 0728 | SPOKANE | 70101 | 15000600 | 21,760.00 | * | 3,264.00 | 11,496.00 | VEHICLES.TRAILERS.NONINDIAN.0000 | VEHICLES | |
NO | 1988 VIM TRAILER | 0744 | NEW MADRID | 70101 | 15000600 | 11,453.00 | * | 11,453.00 | * | VEHICLES.TRAILERS.NONINDIAN.0000 | VEHICLES | |
NO | 2008 CHEVROLET TRAILBLAZER 4X2 | 2350 | CATOOSA | 70101 | 15000600 | 23,041.88 | * | 4,608.37 | 11,433.51 | VEHICLES.TRAILERS.NONINDIAN.0000 | VEHICLES | |
NO | 1988 FRUEHAUF TANKER TRAILER | 2366 | LITTLE ROCK | 70101 | 15000600 | 15,000.00 | * | 3,250.00 | 11,750.00 | VEHICLES.TRAILERS.NONINDIAN.0000 | VEHICLES | |
NO | 1992 FRUEHAUF 7000 STEEL ASPHALT TRAILER | 2365 | LITTLE ROCK | 70101 | 15000600 | 24,500.00 | * | 3,266.66 | 21,233.34 | VEHICLES.TRAILERS.NONINDIAN.0000 | VEHICLES | |
NO | AFE 100167 | 2370 | MUSKOGEE | 70101 | 15000600 | * | * | * | * | VEHICLES.TRAILERS.NONINDIAN.0000 | VEHICLES | |
NO | AFE100167 | 2370 | MUSKOGEE | 70101 | 15000600 | * | * | * | * | VEHICLES.TRAILERS.NONINDIAN.0000 | VEHICLES | |
NO | 4 NEW TRAILERS | 4015 | LAS VEGAS | 70101 | 15000600 | 28,605.75 | * | 14,302.80 | 14,302.95 | VEHICLES.TRAILERS.NONINDIAN.0000 | VEHICLES | |
NO | EXTRUDER PILOT PLANT | 4294 | HALSTEAD | 70101 | 15000600 | 1,807,528.91 | * | * | 1,807,528.91 | STRTNKTERM.NON.NONINDIAN.00000 | STRTNKTERM | |
NO | ETNYRE 1975 TANKER TRAILER #10 12000 GAL | 4329 | ESSEXVILLE | 70101 | 15000600 | 1,743.00 | * | 1,743.00 | * | VEHICLES.TRAILERS.NONINDIAN.0000 | VEHICLES | |
NO | ETNYRE 1977 TANKER TRAILER #46 12000 GAL | 4329 | ESSEXVILLE | 70101 | 15000600 | 1,743.00 | * | 1,743.00 | * | VEHICLES.TRAILERS.NONINDIAN.0000 | VEHICLES | |
NO | ETNYRE 1974 TANKER TRAILER #60 12000 GAL | 4329 | ESSEXVILLE | 70101 | 15000600 | 1,743.00 | * | 1,743.00 | * | VEHICLES.TRAILERS.NONINDIAN.0000 | VEHICLES | |
NO | UTILITY TRAILER 1980 | 4331 | ST LOUIS | 70101 | 15000600 | 1,000.00 | * | 366.67 | 633.33 | VEHICLES.TRAILERS.NONINDIAN.0000 | VEHICLES | |
NO | PORTABLE STORAGE TRAILER 1095 | 4341 | MOREHDCTY | 70101 | 15000600 | 3,000.00 | * | 1,750.00 | 1,250.00 | VEHICLES.TRAILERS.NONINDIAN.0000 | VEHICLES |
Minor Category | Asset Key | AFE | Capex Type | Location | County | State | County Code | City | Asset Site | Date Placed in Service | Year Placed in Service | Units | Asset Cost Account | Life in Years | Depreciation Method | Serial Number |
TRAILERS | 070110647.MAINTENANCE | 070110647 | MAINTENANCE | USA.TN.TN039.PARSONS.00860000 | USA | TN | TN039 | PARSONS | 00860000 | 11-Mar-08 | 2008 | 1 | 15000600 | 5 | STL | K2614K9194 |
TRAILERS | 070110647.MAINTENANCE | 070110647 | MAINTENANCE | USA.TN.TN039.PARSONS.00860000 | USA | TN | TN039 | PARSONS | 00860000 | 11-Mar-08 | 2008 | 1 | 15000600 | 5 | STL | S41297 |
TRAILERS | 070110647.MAINTENANCE | 070110647 | MAINTENANCE | USA.TN.TN039.PARSONS.00860000 | USA | TN | TN039 | PARSONS | 00860000 | 11-Mar-08 | 2008 | 1 | 15000600 | 5 | STL | S31298 |
TRAILERS | 070110647.MAINTENANCE | 070110647 | MAINTENANCE | USA.TN.TN039.PARSONS.00860000 | USA | TN | TN039 | PARSONS | 00860000 | 11-Mar-08 | 2008 | 1 | 15000600 | 5 | STL | P40916 |
TRAILERS | 070110647.MAINTENANCE | 070110647 | MAINTENANCE | USA.TN.TN039.PARSONS.00860000 | USA | TN | TN039 | PARSONS | 00860000 | 11-Mar-08 | 2008 | 1 | 15000600 | 5 | STL | T431S40054 |
TRAILERS | 070110647.MAINTENANCE | 070110647 | MAINTENANCE | USA.TN.TN039.PARSONS.00860000 | USA | TN | TN039 | PARSONS | 00860000 | 11-Mar-08 | 2008 | 1 | 15000600 | 5 | STL | D246K9030 |
TRAILERS | 070110647.MAINTENANCE | 070110647 | MAINTENANCE | USA.TN.TN039.PARSONS.00860000 | USA | TN | TN039 | PARSONS | 00860000 | 11-Mar-08 | 2008 | 1 | 15000600 | 5 | STL | 3337225 |
NONE | 070110550.EXPANSION | 070110550 | EXPANSION | USA.OK.OK143.TULSA.07010000 | USA | OK | OK143 | TULSA | 07010000 | 30-Jun-08 | 2008 | 1 | 15000300 | 20 | STL | |
NONE | 070110588.MAINTENANCE | 070110588 | MAINTENANCE | USA.OK.OK143.TULSA.07010000 | USA | OK | OK143 | TULSA | 07010000 | 21-Jan-08 | 2008 | 4 | 15000700 | 3 | STL | |
NONE | 070210056.EXPANSION | 07210056 | EXPANSION | USA.UT.UT011.SALT LAKE.40140000 | USA | UT | UT011 | SALT LAKE | 40140000 | 30-Jun-08 | 2008 | 1 | 15000400 | 5 | STL | 1E9V112063E1110 |
NONE | 070210056.EXPANSION | 070210056 | EXPANSION | USA.UT.UT011.SALT LAKE.40140000 | USA | UT | UT011 | SALT LAKE | 40140000 | 30-Jun-08 | 2008 | 1 | 15000400 | 5 | STL | 1E9V111332E1111 |
TRAILERS | 070110167.EXPANSION | 070110167 | EXPANSION | USA.ID.ID001.BOISE.07250000 | USA | ID | ID001 | BOISE | 07250000 | 31-May-06 | 2006 | 1 | 15000600 | 5 | STL | 1PMA14839710302 |
TRAILERS | 070110167.EXPANSION | 070110167 | EXPANSION | USA.ID.ID001.BOISE.07250000 | USA | ID | ID001 | BOISE | 07250000 | 31-May-06 | 2006 | 1 | 15000600 | 5 | STL | 1PMA14832610302 |
TRAILERS | 070110167.EXPANSION | 070110167 | EXPANSION | USA.ID.ID001.BOISE.07250000 | USA | ID | ID001 | BOISE | 07250000 | 31-May-06 | 2006 | 1 | 15000600 | 5 | STL | 1PMA14834610302 |
TRAILERS | 070110167.EXPANSION | 070110167 | EXPANSION | USA.ID.ID001.BOISE.07250000 | USA | ID | ID001 | BOISE | 07250000 | 31-May-06 | 2006 | 1 | 15000600 | 5 | STL | 1PMA14836510302 |
TRAILERS | 070110430.EXPANSION | 070110430 | EXPANSION | USA.WA.WA063.SPOKANE.07280000 | USA | WA | WA063 | SPOKANE | 07280000 | 1-Jan-08 | 2008 | 1 | 15000600 | 5 | STL | |
TRAILERS | 070110430.EXPANSION | 070110430 | EXPANSION | USA.WA.WA063.SPOKANE.07280000 | USA | WA | WA063 | SPOKANE | 07280000 | 22-Jan-08 | 2008 | 1 | 15000600 | 5 | STL | |
TRAILERS | 070110430.EXPANSION | 070110430 | EXPANSION | USA.WA.WA063.SPOKANE.07280000 | USA | WA | WA063 | SPOKANE | 07280000 | 11-Apr-08 | 2008 | 1 | 15000600 | 5 | STL | |
TRAILERS | 070110430.EXPANSION | 070110430 | EXPANSION | USA.WA.WA063.SPOKANE.07280000 | USA | WA | WA063 | SPOKANE | 07280000 | 1-Apr-08 | 2008 | 1 | 15000600 | 5 | STL | |
TRAILERS | 070110430.EXPANSION | 070110430 | EXPANSION | USA.WA.WA063.SPOKANE.07280000 | USA | WA | WA063 | SPOKANE | 07280000 | 1-May-08 | 2008 | 1 | 15000600 | 5 | STL | |
TRAILERS | 070110430.EXPANSION | 070110430 | EXPANSION | USA.WA.WA063.SPOKANE.07280000 | USA | WA | WA063 | SPOKANE | 07280000 | 1-May-08 | 2008 | 1 | 15000600 | 5 | STL | |
TRAILERS | 070110430.EXPANSION | 070110430 | EXPANSION | USA.WA.WA063.SPOKANE.07280000 | USA | WA | WA063 | SPOKANE | 07280000 | 5-Jun-08 | 2008 | 1 | 15000600 | 6 | STL | |
TRAILERS | 070110000.ACQUISITION | 070110000 | ACQUISITION | USA.MO.MO143.NEWMADRID.07440000 | USA | MO | MO143 | NEW MADRID | 07440000 | 1-Jun-05 | 2005 | 1 | 15000600 | 3 | STL | 1V9T3423J100109 |
PCKUP>6k | 070110828.MAINTENANCE | 070110828 | MAINTENANCE | USA.OK.OK131.CATOOSA.23500000 | USA | OK | OK131 | CATOOSA | 23500000 | 27-Feb-08 | 2008 | 1 | 15000600 | 5 | STL | 1GNDS13S7822174 |
TRAILERS | 070110606.EXPANSION | 070110606 | EXPANSION | USA.AR.AR119.LITTLEROC.23650000 | USA | AR | AR119 | LITTLE ROCK | 22650000 | 7-Feb-08 | 2008 | 1 | 15000600 | 5 | STL | 1H4T04222GK0222 |
TRAILERS | 070110606.EXPANSION | 070110606 | EXPANSION | USA.AR.AR119.LITTLEROC.23650000 | USA | AR | AR119 | LITTLE ROCK | 22650000 | 18-Jun-08 | 2008 | 1 | 15000600 | 5 | STL | |
TRAILERS | 070110167.EXPANSION | 070110167 | EXPANSION | USA.OK.OK101.MUSKOGEE.23700000 | USA | OK | OK101 | MUSKOGEE | 23700000 | 31-Jan-06 | 2006 | 1 | 15000600 | 1 | STL | |
TRAILERS | 070110167.EXPANSION | 070110167 | EXPANSION | USA.OK.OK101.MUSKOGEE.23700000 | USA | OK | OK101 | MUSKOGEE | 23700000 | 31-Jan-06 | 2006 | 1 | 15000600 | 1 | STL | |
TRAILERS | 070210010.MAINTENANCE | 070210010 | MAINTENANCE | USA.NV.NV003.LAS VEGAS.40150000 | USA | NV | NV003 | LAS VEGAS | 40150000 | 1-Sep-05 | 2005 | 4 | 15000600 | 7 | STL | |
NONE | 070110550.EXPANSION | 07010550 | EXPANSION | USA.KS.KS079.HALSTEAD.4294000 | USA | KS | KS079 | HALSTEAD | 42940000 | 31-Dec-07 | 2007 | 1 | 15000600 | 15 | STL | |
TRAILERS | 070110414.ACQUISITION | 070110414 | ACQUISITION | USA.MI.MI017.ESSEXVILLE.43290000 | USA | MI | MI017 | ESSEXVILLE | 43290000 | 1-Apr-07 | 2007 | 1 | 15000600 | 1 | STL | K2107K8628 |
TRAILERS | 070110414.ACQUISITION | 070110414 | ACQUISITION | USA.MI.MI017.ESSEXVILLE.43290000 | USA | MI | MI017 | ESSEXVILLE | 43290000 | 1-Apr-07 | 2007 | 1 | 15000600 | 1 | ST | K2526K9106 |
TRAILERS | 070110414.ACQUISITION | 070110414 | ACQUISITION | USA.MI.MI017.ESSEXVILLE.43290000 | USA | MI | MI017 | ESSEXVILLE | 43290000 | 1-Apr-07 | 2007 | 1 | 15000600 | 1 | STL | K2229K8771 |
TRAILERS | 070110415.ACQUISITION | 070110415 | ACQUISITION | USA.MO.MO510.ST LOUIS.43310000 | USA | MO | MO510 | ST LOUIS | 43310000 | 30-Apr-07 | 2007 | 1 | 15000600 | 5 | STL | 8L0459005 |
TRAILERS | 070110577.ACQUISTION | 070110577 | ACQUISITION | USA.NC.NC031.MOREHDCTY.43410000 | USA | NC | NC031 | MOREHDCTY | 43410000 | 31-Dec-07 | 2007 | 1 | 15006000 | 2 | STL |
Product | Last Update | Contact | Location | Phone | Estimate | Description |
Tanks | ||||||
Meters/Controls | ||||||
3-inch CMF-Series Mass Meter | Jim Catron | Austin, TX | MicroMotion, Came from CC Plant | |||
2-inch F-Series Mass Meter | Jim Catron | Austin, TX | MicroMotion, Came from CC Plant | |||
2-inch R-Series Mass Meter | Jim Catron | Austin, TX | MicroMotion, Came from CC Plant | |||
2-inch R-Series Mass Meter | Jim Catron | Austin, TX | MicroMotion, Came from CC Plant | |||
2-inch R-Series Mass Meter | Jim Catron | Austin, TX | MicroMotion, Came from CC Plant | |||
Boilers | ||||||
Hot Oil Heaters | ||||||
Heaters/Exchangers | ||||||
Brown Fintube Heat Exchangers | Bill Ennis | Glen Allen, VA | 2) 964-08 | NA | Virginia Power has (16) 14,480 sq. ft heat exchangers available | |
Stack Economizers for boiler | Tim Weatherman | Halstead, KS | New in box - Unit #1 | |||
Stock Economizers for boiler | Tim Weatherman | Halstead, KS | New in box - Unit | |||
Mixers | ||||||
Valves | ||||||
Pumps | ||||||
PS-II lip seals for QS-224 pumps - need to be reb | Gary Shouse | Dodge | 20)225-2264 | |||
Misc Equipment | ||||||
Mill Equipment | ||||||
Emulsion mill w/oiler | Jim Catron | Austin, TX | Came from CC | |||
IKA Mill (replaced with Dalworth) | Mark Taylor | North Salt Lake | Already Shipped per Bob Walley | |||
Motors & Electrical | ||||||
Tanks | |||
Acid Scrubber Tank | 1 | Not Shipped Yet | Catoosa Chemical Upgrade Project - Ergon Does not Agree |
Chemical Tank (Size ????) | 1 | Not Shipped Yet | Catoosa Chemical Upgrade Project - Ergon Does not Agree |
20,000 Gal Vert. Tank | 1 | Garden City, GA | Florida Project |
39,000 Gal Tank w/platforms and ladders | 6 | Garden City, GA | Florida Project |
10,000 Gal Tank (Fiberglass) | 1 | Garden City, GA | Florida Project |
Meters/Controls | |||
3” Invalco Turbine Meter s/ Totalizer | 1 | Las Vegas, NV | Las Vegas Emulsion Project, Already shipped per Mike Hoist |
Schneider Square-D Control Panel | 1 | Not Shipped Yet | North Sale Lake IKA Installation |
Boilers | |||
Hot Oil Heaters | |||
Heaters/Exchangers | |||
Mixers | |||
Mixmor G-14 | 3 | Garden City, GA | Florida Project |
Mixmor HV-1 | 1 | Garden City, GA | Florida Project |
Mixmor HV-3 | 5 | Garden City, GA | Florida Project |
Valves | |||
4” WKM Air Actuated Ball Valve | 1 | Las Vegas, NV | Las Vegas Emulsion Project, Already shipped per Mike Hoist |
Pumps | |||
Misc. Equipment | |||
Video Cameras | 5 | Las Vegas, NV | Las Vegas Emulsion Project, Already shipped per Mike Hoist |
19” LCD Video Monitors | 4 | Las Vegas, NV | Las Vegas Emulsion Project, Already shipped per Mike Hoist |
Quad Video Processors | 2 | Las Vegas, NV | Las Vegas Emulsion Project, Already shipped per Mike Hoist |
2 Channel Fiber Optic Video Transmitter and Receiver | 1 | Las Vegas, NV | Las Vegas Emulsion Project, Already shipped per Mike Hoist |
BOL Station Computer, Monitor & Printer | 1 | Las Vegas, NV | Las Vegas Emulsion Project, Already shipped per Mike Hoist |
OPW Swivel Joints with Spring Swivels, Spring, Drop Swivels | 3 | Las Vegas, NV | Las Vegas Emulsion Project, Already shipped per Mike Hoist |
OPW Downfeed Swivel with Drop Swive. | 1 | Las Vegas, NV | Las Vegas Emulsion Project, Already shipped per Mike Hoist |
Portable EM skids | 4 | Las Vegas, NV | Las Vegas Emulsion Project, Already shipped per Mike Hoist |
Mill Equipment | |||
Motors & Electrical | |||
12 Unit Tank Level Display Pannel | 1 | Las Vegas, NV | Las Vegas Emulsion Project, Already shipped per Mike Hoist |
Entrance Road & Fence | $ 111,550.90 | Las Vegas Paving | Las Vegas, NV | Las Vegas Emulsion Project |
Load Rack Scales | $ 126,723.00 | Mettler-Toledo | Las Vegas, NV | Las Vegas Emulsion Project |
Load Rack Structures (AC & Emulsion), water piping | $ 207,890.00 | FHI | Las Vegas, NV | Las Vegas Emulsion Project |
Entrance Landscaping | $ 4,830.00 | Pyro Combustion | Las Vegas, NV | Las Vegas Emulsion Project |
Load Rack Cameras | $ 5,865.00 | Pyro Combustion | Las Vegas, NV | Las Vegas Emulsion Project |
Ennis Real Fall Protection (1) | ???? | Fall Protection Systems | Ennis, TX | Ennis Rail Fall Protection Project - Ergon Does Not Agree |
(1)- Amount paid is a partial payment |
Facility | Base Rental Fee Per Month | Excess Throughput Quantity (Tons) |
Austin, TX | $*** | *** |
Dodge City, KS | $*** | *** |
Ennis, TX | $*** | *** |
Fontana, CA | $*** | *** |
Halstead, KS | $*** | *** |
Las Vegas, NV | $*** | *** |
Lawton, OK | $*** | *** |
Little Rock, AR | $*** | *** |
Memphis (EM), TN | $*** | *** |
Reading, PA | $*** | *** |
Salina, KS | $*** | *** |
Salt Lake City, UT | $*** | *** |
Woods Cross, UT | $*** | *** |
1. | Owner's Policy of Title Insurance issued by Lawyers Title Insurance Corporation, Policy Number B06-0113059, dated March 20, 2008, with respect to the Facility located in Austin, Texas. |
2. | Owner's Policy of Title Insurance issued by Lawyers Title Insurance Corporation, Policy Number C34-0008894 (271574136), dated June 6, 2008, with respect to the Facility located in Dodge City, Kansas. |
3. | Owner's Policy of Title Insurance issued by Lawyers Title Insurance Corporation, Policy Number B06-0113060, dated March 20, 2008, with respect to the Facility located in Ennis, Texas. |
4. | Owner's Policy of Title Insurance issued by Lawyers Title Insurance Corporation, Policy/File Number 09220523, dated March 20, 2008, with respect to the Facility located in Fontana, California. |
5. | Owner's Policy of Title Insurance issued by Lawyers Title Insurance Corporation, Policy Number C34-0008920 (280024136), dated May 30, 2008, with respect to the Facility located in Halstead, Kansas. |
6. | Owner's Policy of Title Insurance issued by Lawyers Title Insurance Corporation, Policy/File Number 08501120, dated March 18, 2008, with respect to the Facility located in Las Vegas, Nevada. |
7. | Owner's Policy of Title Insurance issued by Lawyers Title Insurance Corporation, Policy Number A 75-2887639, dated July 22, 2008, with respect to the facility located in Lawton, Oklahoma. |
8. | Owner's Policy of Title Insurance issued by Lawyers Title Insurance Corporation, Policy Number A75-Z127831, dated March 19, 2008, with respect to the Facility located in Little Rock, Arkansas. |
9. | Owner's Policy of Title Insurance issued by Lawyers Title Insurance Corporation, Policy Number C29-0158129, dated August 13, 2008, with respect to the Facility located in Memphis (EM), Tennessee. |
10. | Owner's Policy of Title Insurance issued by Lawyers Title Insurance Corporation, Policy Number O-C29Z0-10617, dated May 7, 2008, with respect to the Facility located in N. Salt Lake City, Utah. |
11. | Owner's Policy of Title Insurance issued by Lawyers Title Insurance Corporation, Policy Number 11-152-060, dated March 17, 2007, with respect to the Facility located in Reading, Pennsylvania. |
12. | Owner's Policy of Title Insurance issued by Lawyers Title Insurance Corporation, Policy Number C34-0008921 (271573136), dated June 12, 2008, with respect to the Facility located in Salina, Kansas. |
13. | Owner's Policy of Title Insurance issued by Lawyers Title Insurance Corporation, Policy Number O-C29Z0-10618, dated March 20, 2008, with respect to the Facility located in Woods Cross, Utah. |
1. | Provide site description and physical setting; |
2. | Complete environmental liens review through database, legal records review, and review of provided information & list environmental conditions or restrictions; |
3. | Complete EDR Environmental Records Review and follow-up with onsite record's review and interviews at local, state, and/or Federal regulatory agency if, necessary; |
4. | Collect historical aerial photographs from reliable sources in a scale adequate to resolve potential onsite and neighboring property usage areas of concern over the past 50 years or since its development. These areas could include, but are not limited to, former surface impoundments, debris piles, container storage areas, and areas of construction and demolition. |
5. | Complete site reconnaissance and evaluate current site conditions as well as attempt to determine or validate historical land usage practices both onsite and on neighboring properties. |
6. | Conduct & document telephone/in-person interviews with personnel knowledgeable of current/past onsite and neighboring property usage practices. |
7. | Establish, describe, and illustrate on a site plan all designated Areas of potential Environmental Concern (AECs) as well as its subset of ASTM-defined Recognized Environmental Conditions (RECs). |
8. | As Phase I information evolves in advance of field mobilization, begin to establish AECs and prepare a proposed Phase II sampling and analysis plan (SAP) for review by Lessee. Lessee shall provide a copy of the SAP to Lessor and provide Lessor at least five (5) business days' to review and provide comment on the SAP in advance of any scheduled site visit. |
1. | Based on the information available during the first day of Phase I field reconnaissance, submit a revised SAP with schematic for Lessee approval; provided prior to approval Lessee shall consult with Lessor's representative participating in the site visit concerning and revisions to the plans for soil sampling and provided further that Lessor's representative shall have approval rights with respect to any groundwater sampling, which approval shall be in Lessor's sole discretion. Include boring location, depth intervals of interest, number of samples, and constituents of concern (COCs). All testing may be completing using EPA SW-846 test methods and a Level II QA/QC data deliverable. CLP-level data packages may be collected from any site with historical solid waste management units, underground storage tanks, and historical or active remediation. |
2. | Organize field visits with the flexibility to complete soil and any Lessor-approved groundwater borings using a track-mounted Geoprobe 6620 or similar or suitable for site-specific geologic conditions. Be prepared to drill through (and repair) concrete and asphalt. |
3. | All borings should be continuously sampled and logged to target depths using Geoprobe Dual Case tools which is intended to avoid cross-contamination and false positives. |
4. | Collect & log headspace readings from each interval using a Photo Ionization Detector (PID). |
5. | Samples should be collected from various points within a boring or AEC to attempt to vertically- and horizontally-bound the impact. Borings that encounter free phase non-aqueous liquids should be immediately plugged and abandoned by grouting the hole with the dual cased system still in the hole. All other borings should be grouted the same way upon reaching total depth unless the boring is considered clean based on field screening. |
6. | Groundwater samples should be collected using Geoprobe's grab groundwater sampling system (GSP) unless site conditions or the magnitude of a problem warrant the installation of either a temporary monitoring point (TMP). TMPs should be installed through the dual casing using five feet of I inch I.D. prepacked screen followed with two feet of sand and coated ¼ bentonite pellets. Following the placement of the bentonite seal the casing can be pulled. |
7. | Unless approved by Lessee, all borings and TMPs must be properly abandoned and grouted to the surface. |
8. | Field logs and log book shall be maintained in accordance with EPA Region IV SOPs and submitted to Lessee with the final report. |
LESSOR: | |||
BKEP MATERIALS, L.L.C. | |||
By: | |||
Name: | |||
Title: | |||
BKEP ASPHALT, L.L.C. | |||
By: | |||
Name: | |||
Title: | |||
LESSEE: | |||
ERGON ASPHALT & EMULSIONS, INC. | |||
By: | /s J. Baxter Burns | ||
Name: | J. Baxter Burns, II | ||
Title: | Executive Vice President |
16. | South 14 degrees 41 minutes 27 seconds West 99.99 feet to a bent pipe, a corner of New Penn Motor Express and Giorgio Foods, Inc. |
3. | South 88 degrees 36 minutes 36 seconds West 249.80 feel to a point 111 the pavement of Pottsville Pike. |
1. | Leasehold Owners' Policy of Title Insurance issued by Commonwealth Land Title Insurance Company, Policy Number 2211004421.0, dated July 8, 2009, with respect to the Facility located in Austin, Texas. |
2. | Leasehold Owners' Policy of Title Insurance issued by Lawyers Title Insurance Corporation, Policy Number 08225-78701858, dated July 16, 2009, with respect to the Facility located in Dodge City, Kansas. |
3. | Leasehold Owners’ Policy of Title Insurance issued by Commonwealth Land Title Insurance Company, Policy Number 2211004422.0, dated July 28, 2009, with respect to the Facility located in Ennis, Texas. |
4. | Leasehold Owners' Policy of Title Insurance issued by Lawyers Title Insurance Company, Policy Number 11631345, dated June 30, 2009, with respect to the Facility located in Fontana, California. |
5. | Leasehold Owners' Policy of Title Insurance issued by Lawyers Title Insurance Company, Policy Number 82225-78701897, dated July 23, 2009, with respect to the Facility located in Halstead, Kansas. |
6. | Leasehold Owners' Policy of Title Insurance issued by Lawyers Title Insurance Company, Policy Number 08501904, dated June 29, 2009, with respect to the Facility located in Las Vegas, Nevada. |
7. | Leasehold Owners' Policy of Title Insurance issued by Lawyers Title Insurance Company, Policy Number C29-0032327, dated July 16, 2009, with respect to the Facility located in Lawton. Oklahoma. |
8. | Leasehold Owners' Policy of Title Insurance issued by Lawyers Title Insurance Company, Policy Number C89-Z006172, dated September 9, 2009, with respect to the Facility located in Little Rock, Arkansas. |
9. | Leasehold Owners' Policy of Title Insurance issued by Lawyers Title Insurance Company, Policy Number C29-0137006, dated June 29. 2009, with respect to the Facility located in Memphis, Tennessee. |
10. | Leasehold Owners' Policy of Title Insurance issued by Lawyers Title Insurance Company, Policy Number 11-630-977, dated July 7, 2009, with respect to the Facility located in Reading, Pennsylvania. |
11. | Leasehold Owners' Policy of Title Insurance issued by Lawyers Title Insurance Company, Policy Number 82225-78701926, dated July 16, 2009, with respect to the Facility located in Salina, Kansas. |
12. | Leasehold Owners' Policy of Title Insurance issued by Lawyers Title Insurance Company. Policy Number UT0024-82-51884-2009.78079696, dated July 7, 2009, with respect to the Facility located in North Salt Lake City, Utah. |
13. | Leasehold Owners' Policy of Title Insurance issued by Lawyers Title Insurance Company, Policy Number UT0024-82-51885-2009.82306-8079781, dated July 7, 2009, with respect to the Facility located in Woods Cross, Utah. |
14. | Leasehold Owners' Policy of Title insurance issued by Commonwealth Title Insurance Company, Policy Number C33-0051332, dated July 22, 2009, with respect to the Facility located in Garden City, Georgia. |
15. | Leasehold Owners' Policy of Title Insurance issued by Lawyers Title Insurance Company, Policy Number 11-630-991, dated July 7, 2009, with respect to the Facility located in Northumberland, Pennsylvania. |
2. | Except as otherwise stated in this Second Amendment, all terms and conditions of the Master Lease, as amended or otherwise modified by the First Amendment and the Partial Lease Termination, shall remain in full force and effect without change, and are hereby ratified by each of the Parties. Capitalized terms used but not defined in this Second Amendment shall have the meanings ascribed to them in the Master Lease. The Parties agree to cooperate with one another and to use their commercially reasonable efforts to effect, or cause to be effected, as the case may be, the transactions contemplated by this Second Amendment. Each of the Parties shall, at any time and from time to time after the date hereof, upon the request of any other Party, execute, acknowledge and deliver all such further instruments or assurances as may be necessary, in the reasonable judgment of the requesting Party to carry out the provisions and intent of this Second Amendment. |
3. | This Second Amendment may be executed by the Parties in separate counterparts and initially delivered by facsimile transmission or otherwise, with original signature pages to follow and all such counterparts shall together constitute one and the same instrument. |
4. | This Second Amendment shall be governed by, construed and enforced under the laws of the State of Oklahoma with giving effect to its conflicts of laws and principles. |
LESSOR: | |||
BKEP MATERIALS, L.L.C. | |||
By: | /s/ Jeff Speer | ||
Name: | Jeff Speer | ||
Title: | Sr. VP of Operations | ||
BKEP ASPHALT, L.L.C. | |||
By: | /s/ Jeff Speer | ||
Name: | Jeff Speer | ||
Title: | Sr. VP of Operations | ||
LESSEE: | |||
ERGON ASPHALT & EMULSIONS, INC. | |||
By: | /s/ J. Baxter Burns | ||
Name: | J. Baxter Burns, II | ||
Title: | President |
1. | I have reviewed this quarterly report on Form 10-Q of Blueknight Energy Partners, L.P.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | November 2, 2016 |
/s/ Mark Hurley | |
Mark Hurley | |
Chief Executive Officer | |
Blueknight Energy Partners, G.P., L.L.C., | |
general partner of Blueknight Energy Partners, L.P. |
1. | I have reviewed this quarterly report on Form 10-Q of Blueknight Energy Partners, L.P.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | November 2, 2016 |
/s/ Alex G. Stallings | |
Alex G. Stallings | |
Chief Financial Officer and Secretary of | |
Blueknight Energy Partners, G.P., L.L.C., | |
general partner of Blueknight Energy Partners, L.P. |
(1) | the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Partnership. |
/s/ Mark Hurley |
Mark Hurley |
Chief Executive Officer of |
Blueknight Energy Partners G.P., L.L.C., |
general partner of Blueknight Energy Partners, L.P. |
November 2, 2016 |
/s/ Alex G. Stallings |
Alex G. Stallings |
Chief Financial Officer and Secretary of |
Blueknight Energy Partners G.P., L.L.C., |
general partner of Blueknight Energy Partners, L.P. |
November 2, 2016 |
* | A signed original of this written statement required by Section 906 has been provided to the Partnership and will be retained by the Partnership and furnished to the Securities and Exchange Commission or its staff upon request. The foregoing certification is being furnished to the Securities and Exchange Commission as an exhibit to the Report. |
Document And Entity Information - shares |
9 Months Ended | ||
---|---|---|---|
Sep. 30, 2016 |
Oct. 28, 2016 |
Dec. 31, 2015 |
|
Entity Information [Line Items] | |||
Series A Preferred unitholders, units outstanding | 30,147,624 | 30,158,619 | |
Entity Registrant Name | Blueknight Energy Partners, L.P. | ||
Entity Central Index Key | 0001392091 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Document Fiscal Year Focus | 2016 | ||
Document Fiscal Period Focus | Q3 | ||
Document Type | 10-Q | ||
Amendment Flag | false | ||
Document Period End Date | Sep. 30, 2016 | ||
Entity Common Stock, Shares Outstanding | 37,993,177 | ||
Subsequent Event [Member] | |||
Entity Information [Line Items] | |||
Series A Preferred unitholders, units outstanding | 35,125,202 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Current assets: | ||
Accounts receivable, allowance for doubtful accounts | $ 21 | $ 38 |
Receivables from related parties, allowance for doubtful accounts | 0 | 225 |
Accumulated Depreciation, Assets held for sale | 1,442 | 0 |
Accumulated depreciation | $ 223,563 | $ 205,967 |
Partners’ capital: | ||
Common unitholders, units issued | 37,122,607 | 33,039,818 |
Common unitholders, units outstanding | 37,122,607 | 33,039,818 |
Series A Preferred unitholders, units issued | 30,147,624 | 30,158,619 |
Series A Preferred unitholders, units outstanding | 30,147,624 | 30,158,619 |
General partner interest, units outstanding | 1,127,755 | 1,127,755 |
General partner percentage interest | 1.70% | 1.80% |
CONSOLIDATED STATEMENTS OF OPERATIONS CONSOLIDATED STATEMENT OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Income Statement [Abstract] | ||||
Capitalized interest | $ 0 | $ 80 | $ 41 | $ 153 |
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL - 9 months ended Sep. 30, 2016 - USD ($) $ in Thousands |
Total |
Common Unitholders [Member] |
Preferred Partner [Member] |
General Partner Interest [Member] |
---|---|---|---|---|
Balance at Dec. 31, 2015 | $ 87,219 | $ 493,824 | $ 204,599 | $ (611,204) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | (6,791) | (22,995) | 16,173 | 31 |
Equity-based incentive compensation | 1,319 | 1,297 | 22 | |
Profits interest contribution | 112 | 112 | ||
Distributions | (32,473) | (15,333) | (16,173) | (967) |
Proceeds from sale of 3,795,000 common units, net of offering costs of $1.4 million. | 20,967 | 20,967 | ||
Proceeds from sale of 71,807 common units pursuant to the Employee Unit Purchase Plan | 348 | 348 | ||
Balance at Sep. 30, 2016 | $ 70,701 | $ 478,108 | $ 204,599 | $ (612,006) |
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (PARENTHETICAL) - USD ($) $ in Millions |
Sep. 30, 2016 |
Jul. 26, 2016 |
---|---|---|
Changes in Partners Capital [Abstract] | ||
Limited Partners' Capital Account, Units Issued | 71,807 | 3,795,000 |
Limited Partners' Offering Costs | $ 1.4 |
ORGANIZATION AND NATURE OF BUSINESS |
9 Months Ended |
---|---|
Sep. 30, 2016 | |
ORGANIZATION AND NATURE OF BUSINESS [Abstract] | |
ORGANIZATION AND NATURE OF BUSINESS | ORGANIZATION AND NATURE OF BUSINESS Blueknight Energy Partners, L.P. and subsidiaries (collectively, the “Partnership”) is a publicly traded master limited partnership with operations in twenty-seven states. The Partnership provides integrated terminalling, storage, processing, gathering, transportation and marketing services for companies engaged in the production, distribution and marketing of crude oil and asphalt products. The Partnership manages its operations through four operating segments: (i) asphalt terminalling services, (ii) crude oil terminalling and storage services, (iii) crude oil pipeline services and (iv) crude oil trucking and producer field services. The Partnership’s common units and preferred units, which represent limited partnership interests in the Partnership, are listed on the NASDAQ Global Market under the symbols “BKEP” and “BKEPP,” respectively. The Partnership was formed in February 2007 as a Delaware master limited partnership initially to own, operate and develop a diversified portfolio of complementary midstream energy assets. On July 19, 2016, the Partnership announced that Ergon, Inc. (together with its affiliates, “Ergon”) agreed to purchase 100% of the outstanding voting stock of Blueknight GP Holding, L.L.C., which owns 100% of the capital stock of Blueknight Energy Partners G.P., L.L.C. (the “General Partner”), pursuant to a Membership Interest Purchase Agreement dated July 19, 2016 among CB-Blueknight, LLC (“CBB”), an indirect wholly-owned subsidiary of Charlesbank, Blueknight Energy Holding, Inc. (“BEHI”), an indirect wholly-owned subsidiary of Vitol, and Ergon Asphalt Holdings, LLC, a wholly-owned subsidiary of Ergon. This transaction was consummated on October 5, 2016. See Note 17 for further description of the Ergon transactions. |
BASIS OF CONSOLIDATION AND PRESENTATION |
9 Months Ended |
---|---|
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF CONSOLIDATION AND PRESENTATION | BASIS OF CONSOLIDATION AND PRESENTATION The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The condensed consolidated statements of operations for the three and nine months ended September 30, 2015 and 2016, the condensed consolidated statement of changes in partners’ capital for the nine months ended September 30, 2016, the condensed consolidated statements of cash flows for the nine months ended September 30, 2015 and 2016, and the condensed consolidated balance sheet as of September 30, 2016, are unaudited. In the opinion of management, the unaudited condensed consolidated financial statements have been prepared on the same basis as the audited financial statements and include all adjustments necessary to state fairly the financial position and results of operations for the respective interim periods. All adjustments are of a recurring nature unless otherwise disclosed herein. The 2015 year-end condensed consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by GAAP. These unaudited condensed consolidated financial statements and notes should be read in conjunction with the consolidated financial statements and notes thereto included in the Partnership’s annual report on Form 10-K for the year ended December 31, 2015, filed with the Securities and Exchange Commission (the “SEC”) on March 9, 2016 (the “2015 Form 10-K”). Interim financial results are not necessarily indicative of the results to be expected for an annual period. The Partnership’s significant accounting policies are consistent with those disclosed in Note 3 of the Notes to Consolidated Financial Statements in its 2015 Form 10-K. The Partnership’s investment in Advantage Pipeline, L.L.C. (“Advantage Pipeline”), over which the Partnership has significant influence but not control, is accounted for by the equity method. The Partnership does not consolidate any part of the assets or liabilities of its equity investee. The Partnership’s share of net income or loss is reflected as one line item on the Partnership’s unaudited condensed consolidated statements of operations entitled “Equity earnings in unconsolidated affiliate” and will increase or decrease, as applicable, the carrying value of the Partnership’s “Investment in unconsolidated affiliate” on the unaudited condensed consolidated balance sheets. Distributions to the Partnership reduce the carrying value of its investment and are reflected in the Partnership’s unaudited condensed consolidated statements of cash flows in the line item “Distributions from unconsolidated affiliate.” Contributions will increase the carrying value of the Partnership’s investment and will be reflected in the Partnership’s unaudited condensed consolidated statements of cash flows in investing activities. |
RESTRUCTURING CHARGES (Notes) |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities Disclosure [Text Block] | ESTRUCTURING CHARGES During the fourth quarter of 2015, the Partnership recognized certain restructuring charges in our crude oil trucking and producer field services segment pursuant to an approved plan to exit the trucking market in West Texas. Changes in the accrued amounts pertaining to the restructuring charges are summarized as follows:
The remaining accrual relates to lease payments that will be paid over the remaining lease terms, which extend through July 2019. |
EQUITY METHOD INVESTMENT (Notes) |
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Schedule of Equity Method Investments [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments and Joint Ventures Disclosure [Text Block] | EQUITY METHOD INVESTMENT The Partnership’s investment in Advantage Pipeline, over which the Partnership has significant influence but not control, is accounted for by the equity method. As of September 30, 2016, the Partnership’s investment represents a 30% ownership interest in Advantage Pipeline. Summarized financial information for Advantage Pipeline is set forth in the tables below for the periods indicated (in thousands):
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PROPERTY, PLANT AND EQUIPMENT |
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Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PROPERTY, PLANT AND EQUIPMENT | PROPERTY, PLANT AND EQUIPMENT
Depreciation expense for the three months ended September 30, 2015 and 2016 was $6.7 million and $7.3 million, respectively, and depreciation expense for the nine months ended September 30, 2015 and 2016 was $20.1 million and $21.6 million, respectively. The Partnership recorded no asset impairment expense for the three months ended September 30, 2016. For the nine months ended September 30, 2016, the Partnership recorded asset impairment expense of $22.8 million. The year-to-date impairment is primarily due to an impairment recognized on the Knight Warrior pipeline project, a previously announced East Texas Eaglebine/Woodbine crude oil pipeline project. The Knight Warrior pipeline project was canceled due to continued low rig counts in the Eaglebine/Woodbine area coupled with lower production volumes, competing projects and the overall impact of the decreased market price of crude oil. Consequently, shipper commitments related to the project have been canceled. In connection with the cancellation of the shipper commitments, the Partnership evaluated the Knight Warrior project for impairment and recognized an impairment expense of $22.6 million during the three months ended June 30, 2016. |
DEBT |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DEBT | DEBT On June 28, 2013, the Partnership entered into an amended and restated credit agreement that consists of a $400.0 million revolving loan facility. On September 15, 2014, the Partnership amended its credit facility to, among other things, amend the maximum permitted consolidated total leverage ratio and to increase the limit on material project adjustments to EBITDA (as defined in the credit agreement). On July 19, 2016, the Partnership entered into a second amendment to the credit agreement which, among other things, amended the maximum permitted consolidated total leverage ratio as discussed below. As of October 28, 2016, approximately $315.0 million of revolver borrowings and $1.4 million of letters of credit were outstanding under the credit facility, leaving the Partnership with approximately $83.6 million available capacity for additional revolver borrowings and letters of credit under the credit facility, although the Partnership’s ability to borrow such funds may be limited by the financial covenants in the credit facility. The proceeds of loans made under the amended and restated credit agreement may be used for working capital and other general corporate purposes of the Partnership. All references herein to the credit agreement on or after June 28, 2013, refer to the second amended and restated credit agreement, as amended on July 19, 2016. The credit agreement is guaranteed by all of the Partnership’s existing subsidiaries. Obligations under the credit agreement are secured by first priority liens on substantially all of the Partnership’s assets and those of the guarantors. The credit agreement includes procedures for additional financial institutions to become revolving lenders, or for any existing lender to increase its revolving commitment thereunder, subject to an aggregate maximum of $500.0 million for all revolving loan commitments under the credit agreement. The credit agreement will mature on June 28, 2018, and all amounts outstanding under the credit agreement will become due and payable on such date. The Partnership may prepay all loans under the credit agreement at any time without premium or penalty (other than customary LIBOR breakage costs), subject to certain notice requirements. The credit agreement requires mandatory prepayments of amounts outstanding thereunder with the net proceeds of certain asset sales, property or casualty insurance claims, and condemnation proceedings, unless the Partnership reinvests such proceeds in accordance with the credit agreement, but these mandatory prepayments will not require any reduction of the lenders’ commitments under the credit agreement. Borrowings under the credit agreement bear interest, at the Partnership’s option, at either the reserve-adjusted eurodollar rate (as defined in the credit agreement) plus an applicable margin that ranges from 2.0% to 3.0% or the alternate base rate (the highest of the agent bank’s prime rate, the federal funds effective rate plus 0.5%, and the 30-day eurodollar rate plus 1.0%) plus an applicable margin that ranges from 1.0% to 2.0%. The Partnership pays a per annum fee on all letters of credit issued under the credit agreement, which fee equals the applicable margin for loans accruing interest based on the eurodollar rate, and the Partnership pays a commitment fee ranging from 0.375% to 0.5% on the unused commitments under the credit agreement. The credit agreement does not have a floor for the alternate base rate or the eurodollar rate. The applicable margins for the Partnership’s interest rate, the letter of credit fee and the commitment fee vary quarterly based on the Partnership’s consolidated total leverage ratio (as defined in the credit agreement, being generally computed as the ratio of consolidated total debt to consolidated earnings before interest, taxes, depreciation, amortization and certain other non-cash charges). The credit agreement includes financial covenants that are tested on a quarterly basis, based on the rolling four-quarter period that ends on the last day of each fiscal quarter. Prior to the date on which the Partnership issues qualified senior notes in an aggregate principal amount (when combined with all other qualified senior notes previously or concurrently issued) that equals or exceeds $200.0 million , the maximum permitted consolidated total leverage ratio is 5.00 to 1.00; provided that:
From and after the date on which the Partnership issues qualified senior notes in an aggregate principal amount (when combined with all other qualified senior notes previously or concurrently issued) that equals or exceeds $200.0 million, the maximum permitted consolidated total leverage ratio is 5.00 to 1.00; provided that from and after the fiscal quarter ending immediately preceding the fiscal quarter in which a specified acquisition occurs to and including the last day of the second full fiscal quarter following the fiscal quarter in which such acquisition occurred, the maximum permitted consolidated total leverage ratio will be 5.50 to 1.00. The maximum permitted consolidated senior secured leverage ratio (as defined in the credit agreement, but generally computed as the ratio of consolidated total secured debt to consolidated earnings before interest, taxes, depreciation, amortization and certain other non-cash charges) is 3.50 to 1.00, but this covenant is only tested from and after the date on which the Partnership issues qualified senior notes in an aggregate principal amount (when combined with all other qualified senior notes previously or concurrently issued) that equals or exceeds $200.0 million. The minimum permitted consolidated interest coverage ratio (as defined in the credit agreement, but generally computed as the ratio of consolidated earnings before interest, taxes, depreciation, amortization and certain other non-cash charges to consolidated interest expense) is 2.50 to 1.00. Furthermore, the credit agreement:
In addition, the credit agreement contains various covenants that, among other restrictions, limit the Partnership’s ability to:
At September 30, 2016, the Partnership’s consolidated total leverage ratio was 3.94 to 1.00 and the consolidated interest coverage ratio was 5.51 to 1.00. The Partnership was in compliance with all covenants of its credit agreement as of September 30, 2016. The credit agreement permits the Partnership to make quarterly distributions of available cash (as defined in the Partnership’s partnership agreement) to unitholders so long as no default or event of default exists under the credit agreement on a pro forma basis after giving effect to such distribution. The Partnership is currently allowed to make distributions to its unitholders in accordance with this covenant; however, the Partnership will only make distributions to the extent it has sufficient cash from operations after establishment of cash reserves as determined by the Board of Directors (the “Board”) of the General Partner in accordance with the Partnership’s cash distribution policy, including the establishment of any reserves for the proper conduct of the Partnership’s business. See Note 8 for additional information regarding distributions. In addition to other customary events of default, the credit agreement includes an event of default if (i) the General Partner ceases to own 100% of the Partnership’s general partner interest or ceases to control the Partnership or (ii) Ergon ceases to own and control 50.0% or more of the membership interests of the General Partner. If an event of default relating to bankruptcy or other insolvency events occurs with respect to the General Partner or the Partnership, all indebtedness under the credit agreement will immediately become due and payable. If any other event of default exists under the credit agreement, the lenders may accelerate the maturity of the obligations outstanding under the credit agreement and exercise other rights and remedies. In addition, if any event of default exists under the credit agreement, the lenders may commence foreclosure or other actions against the collateral. If any default occurs under the credit agreement, or if the Partnership is unable to make any of the representations and warranties in the credit agreement, the Partnership will be unable to borrow funds or to have letters of credit issued under the credit agreement. The Partnership capitalized no debt issuance costs during either of the three and nine months ended September 30, 2015. The Partnership capitalized $0.9 million and $1.0 million of debt issuance costs during the three and nine months ended September 30, 2016, respectively. Debt issuance costs are being amortized over the term of the amended and restated credit agreement. Interest expense related to debt issuance cost amortization for the three months ended September 30, 2015 and 2016 was $0.2 million and $0.3 million, respectively. Interest expense related to debt issuance cost amortization for the nine months ended September 30, 2015 and 2016 was $0.7 million and $0.8 million, respectively. During the three months ended September 30, 2015 and 2016, the weighted average interest rate under the Partnership’s credit agreement was 3.31% and 4.27%, respectively, resulting in interest expense of approximately $2.0 million and $2.8 million, respectively. During the nine months ended September 30, 2015 and 2016, the weighted average interest rate under the Partnership’s credit agreement was 3.37% and 3.92%, respectively, resulting in interest expense of approximately $5.9 million and $8.0 million, respectively. As of September 30, 2016, borrowings under the Partnership’s amended and restated credit agreement bore interest at a weighted average interest rate of 4.35%. During the three months ended September 30, 2015, the Partnership capitalized interest of less than $0.1 million. The Partnership capitalized no interest during the three months ended September 30, 2016. During the nine months ended September 30, 2015 and 2016, the Partnership capitalized interest of $0.2 million and less than $0.1 million, respectively. The Partnership is exposed to market risk for changes in interest rates related to its credit facility. Interest rate swap agreements are used to manage a portion of the exposure related to changing interest rates by converting floating-rate debt to fixed-rate debt. In March 2014, the Partnership entered into two interest rate swap agreements with an aggregate notional amount of $200.0 million. The first agreement has a notional amount of $100.0 million, became effective June 28, 2014, and matures on June 28, 2018. Under the terms of the first interest rate swap agreement, the Partnership pays a fixed rate of 1.45% and receives one-month LIBOR with monthly settlement. The second agreement has a notional amount of $100.0 million, became effective January 28, 2015, and matures on January 28, 2019. Under the terms of the second interest rate swap agreement, the Partnership pays a fixed rate of 1.97% and receives one-month LIBOR with monthly settlement. During the three months ended September 30, 2015 and 2016, the Partnership recorded swap interest expense of $0.8 million and $0.6 million, respectively. During the nine months ended September 30, 2015 and 2016, the Partnership recorded swap interest expense of $2.2 million and $1.9 million, respectively. The fair market value of the interest rate swaps at December 31, 2015 and September 30, 2016 is a liability of $3.1 million and $4.0 million, respectively, and is recorded in long-term interest rate swap liabilities on the unaudited condensed consolidated balance sheets. The interest rate swaps do not receive hedge accounting treatment under ASC 815 - Derivatives and Hedging. Changes in the fair value of the interest rate swaps are recorded in interest expense in the unaudited condensed consolidated statements of operations. |
NET INCOME PER LIMITED PARTNER UNIT |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NET INCOME PER LIMITED PARTNER UNIT | NET INCOME PER LIMITED PARTNER UNIT For purposes of calculating earnings per unit, the excess of distributions over earnings or excess of earnings over distributions for each period are allocated to the Partnership’s General Partner based on the General Partner’s ownership interest at the time. The following sets forth the computation of basic and diluted net income per common unit (in thousands, except per unit data):
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PARTNERS' CAPITAL AND DISTRIBUTIONS |
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Sep. 30, 2016 | |
Partners' Capital Account, Distributions [Abstract] | |
PARTNERS' CAPITAL AND DISTRIBUTIONS | ARTNERS’ CAPITAL AND DISTRIBUTIONS On July 26, 2016, the Partnership issued and sold 3,795,000 common units for a public offering price of $5.90 per unit, resulting in proceeds of approximately $21.2 million, net of underwriters’ discount and offering expenses of $1.4 million. On October 20, 2016, the Board approved a distribution of $0.17875 per preferred unit, or a total distribution of $6.3 million, for the quarter ending September 30, 2016. The Partnership will pay this distribution on the preferred units on November 14, 2016, to unitholders of record as of November 4, 2016. In addition, on October 20, 2016, the Board declared a cash distribution of $0.1450 per unit on its outstanding common units. The distribution will be paid on November 14, 2016, to unitholders of record on November 4, 2016. The distribution is for the three months ended September 30, 2016. The total distribution will be approximately $6.0 million, with approximately $5.5 million and $0.4 million to be paid to the Partnership’s common unitholders and general partner, respectively, and $0.1 million to be paid to holders of phantom and restricted units pursuant to awards granted under the Partnership’s long-term incentive plan. |
RELATED PARTY TRANSACTIONS |
9 Months Ended |
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Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS The Partnership provides crude oil gathering, transportation, terminalling and storage services to Vitol Holding B.V. (“Vitol”). For the three months ended September 30, 2015 and 2016, the Partnership recognized revenues of $10.5 million and $5.4 million, respectively, for services provided to Vitol. For the nine months ended September 30, 2015 and 2016, the Partnership recognized revenues of $30.3 million and $17.6 million, respectively, for services provided to Vitol. As of December 31, 2015 and September 30, 2016, the Partnership had receivables from Vitol of $1.8 million and $1.2 million, respectively, net of allowance for doubtful accounts. As of December 31, 2015 and September 30, 2016, the Partnership had unearned revenues from Vitol of $0.8 million and $0.1 million, respectively. As a result of the change of control of the Partnership’s General Partner, Vitol is no longer a related party as of October 5, 2016. See Note 17 for further description of the Ergon transactions. The Partnership also provides operating and administrative services to Advantage Pipeline. For the three months ended September 30, 2015 and 2016, the Partnership earned revenues of $0.4 million and $0.3 million, respectively, for services provided to Advantage Pipeline. For each of the nine months ended September 30, 2015 and 2016, the Partnership earned revenues of $1.0 million for services provided to Advantage Pipeline. As of both December 31, 2015 and September 30, 2016, the Partnership had receivables from Advantage Pipeline of $0.1 million. |
LONG-TERM INCENTIVE PLAN |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LONG-TERM INCENTIVE PLAN | LONG-TERM INCENTIVE PLAN In July 2007, the General Partner adopted the Long-Term Incentive Plan (the “LTIP”). The compensation committee of the Board administers the LTIP. Effective April 29, 2014, the Partnership’s unitholders approved an amendment to the LTIP to increase the number of common units reserved for issuance under the incentive plan by 1,500,000 common units from 2,600,000 common units to 4,100,000 common units. The common units are deliverable upon vesting. Although other types of awards are contemplated under the LTIP, currently outstanding awards include “phantom” units, which convey the right to receive common units upon vesting, and “restricted” units, which are grants of common units restricted until the time of vesting. Certain of the phantom unit awards also include distribution equivalent rights (“DERs”). Subject to applicable earning criteria, a DER entitles the grantee to a cash payment equal to the cash distribution paid on an outstanding common unit prior to the vesting date of the underlying award. Recipients of restricted units are entitled to receive cash distributions paid on common units during the vesting period which distributions are reflected initially as a reduction of partners’ capital. Distributions paid on units which ultimately do not vest are reclassified as compensation expense. Awards granted to date are equity awards and, accordingly, the fair value of the awards as of the grant date is expensed over the vesting period. In connection with each anniversary of joining the Board, restricted common units are granted to the independent directors. The units vest in one-third increments over three years. The following table includes information on grants made to the directors under the LTIP:
_________________ (1) Fair value is the closing market price on the grant date of the awards. The Partnership also grants phantom units to employees. These grants are equity awards under ASC 718 – Stock Compensation, and, accordingly, the fair value of the awards as of the grant date is expensed over the vesting period. The following table includes information on the outstanding grants:
_________________ (1) Fair value is the closing market price on the grant date of the awards. The unrecognized estimated compensation cost of outstanding phantom units at September 30, 2016 was $2.3 million, which will be recognized over the remaining vesting period. In September 2012, Mr. Mark Hurley was granted 500,000 phantom units under the LTIP upon his employment as the Chief Executive Officer of the General Partner. These grants are equity awards under ASC 718 – Stock Compensation, and, accordingly, the fair value of the awards as of the grant date is expensed over the vesting period. These units vest ratably over five years pursuant to the Employee Phantom Unit Agreement between Mr. Hurley and the General Partner and do not include DERs. The weighted average grant date fair value for the units of $5.62 was determined based on the closing market price of the Partnership’s common units on the grant date of the award, less the present value of the estimated distributions to be paid to holders of an outstanding common unit prior to the vesting of the underlying award. The value of this award grant was approximately $2.8 million on the grant date, and the unrecognized estimated compensation cost at September 30, 2016 was $0.5 million and will be expensed over the remaining vesting period. The Partnership’s equity-based incentive compensation expense for each of the three months ended September 30, 2015 and 2016 was $0.7 million. The Partnership’s equity-based incentive compensation expense for the nine months ended September 30, 2015 and 2016 was $1.9 million and $1.8 million, respectively. Activity pertaining to phantom common units and restricted common unit awards granted under the Plan is as follows:
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EMPLOYEE BENEFIT PLAN |
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Sep. 30, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
EMPLOYEE BENEFIT PLAN | EMPLOYEE BENEFIT PLANS Under the Partnership’s 401(k) Plan, which was instituted in 2009, employees who meet specified service requirements may contribute a percentage of their total compensation, up to a specified maximum, to the 401(k) Plan. The Partnership may match each employee’s contribution, up to a specified maximum, in full or on a partial basis. The Partnership recognized expense of $0.4 million and $0.3 million, respectively, for the three months ended September 30, 2015 and 2016, for discretionary contributions under the 401(k) Plan. The Partnership recognized expense of $1.2 million and $0.9 million, respectively, for the nine months ended September 30, 2015 and 2016, for discretionary contributions under the 401(k) Plan. The Partnership may also make annual lump-sum contributions to the 401(k) Plan irrespective of the employee’s contribution match. The Partnership may make a discretionary annual contribution in the form of profit sharing calculated as a percentage of an employee’s eligible compensation. This contribution is retirement income under the qualified 401(k) Plan. Annual profit sharing contributions to the 401(k) Plan are submitted to and approved by the Board. The Partnership recognized expense of $0.3 million and $0.2 million, respectively, for the three months ended September 30, 2015 and 2016, for discretionary profit sharing contributions under the 401(k) Plan. The Partnership recognized expense of $0.6 million and $0.5 million, respectively, for the nine months ended September 30, 2015 and 2016, for discretionary profit sharing contributions under the 401(k) Plan. Under the Partnership’s Employee Unit Purchase Plan (the “Unit Purchase Plan”), which was instituted in January 2015, employees have the opportunity to acquire or increase their ownership of common units representing limited partner interests in the Partnership. Eligible employees who enroll in the Unit Purchase Plan may elect to have a designated whole percentage, up to a specified maximum, of their eligible compensation for each pay period withheld for the purchase of common units at a discount to the then current market value. A maximum of 1,000,000 common units may be delivered under the Unit Purchase Plan, subject to adjustment for a recapitalization, split, reorganization, or similar event pursuant to the terms of the Unit Purchase Plan. The Partnership recognized compensation expense of less than $0.1 million for both the three months ended September 30, 2015 and 2016, in connection with the Unit Purchase Plan. The Partnership recognized compensation expense of $0.1 million and less than $0.1 million, respectively, for the nine months ended September 30, 2015 and 2016, in connection with the Unit Purchase Plan. |
FAIR VALUE MEASUREMENTS |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The Partnership uses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost) to value assets and liabilities required to be measured at fair value, as appropriate. The Partnership uses an exit price when determining the fair value. The exit price represents amounts that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The Partnership utilizes a three-tier fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:
This hierarchy requires the use of observable market data, when available, to minimize the use of unobservable inputs when determining fair value. In periods in which they occur, the Partnership recognizes transfers into and out of Level 3 as of the end of the reporting period. Transfers out of Level 3 represent existing assets and liabilities that were classified previously as Level 3 for which the observable inputs became a more significant portion of the fair value estimates. Determining the appropriate classification of the Partnership’s fair value measurements within the fair value hierarchy requires management’s judgment regarding the degree to which market data is observable or corroborated by observable market data. The Partnership’s recurring financial assets and liabilities subject to fair value measurements and the necessary disclosures are as follows (in thousands):
Fair Value of Other Financial Instruments The following disclosure of the estimated fair value of financial instruments is made in accordance with accounting guidance for financial instruments. The Partnership has determined the estimated fair values by using available market information and valuation methodologies. Considerable judgment is required in interpreting market data to develop the estimates of fair value. The use of different market assumptions or valuation methodologies may have a material effect on the estimated fair value amounts. At September 30, 2016, the carrying values on the unaudited condensed consolidated balance sheets for cash and cash equivalents (classified as Level 1), accounts receivable, and accounts payable approximate their fair value because of their short-term nature. Based on the borrowing rates currently available to the Partnership for credit agreement debt with similar terms and maturities and consideration of the Partnership’s non-performance risk, long-term debt associated with the Partnership’s credit agreement at September 30, 2016 approximates its fair value. The fair value of the Partnership’s long-term debt was calculated using observable inputs (LIBOR for the risk free component) and unobservable company-specific credit spread information. As such, the Partnership considers this debt to be Level 3. |
OPERATING SEGMENTS |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OPERATING SEGMENTS | OPERATING SEGMENTS The Partnership’s operations consist of four operating segments: (i) asphalt terminalling services, (ii) crude oil terminalling and storage services, (iii) crude oil pipeline services, and (iv) crude oil trucking and producer field services. ASPHALT TERMINALLING SERVICES —The Partnership provides asphalt product and residual fuel terminalling, storage and blending services at its 45 terminalling and storage facilities located in 23 states. On October 5, 2016, the Partnership acquired nine additional terminalling and storage facilities, bringing the total to 54 terminalling and storage facilities located in 26 states (see Note 17). CRUDE OIL TERMINALLING AND STORAGE SERVICES —The Partnership provides crude oil terminalling and storage services at its terminalling and storage facilities located in Oklahoma and Texas. CRUDE OIL PIPELINE SERVICES —The Partnership owns and operates three pipeline systems, the Mid-Continent system, the East Texas system and the Eagle North System, that gather crude oil purchased by its customers and transports it to refiners, to common carrier pipelines for ultimate delivery to refiners or to terminalling and storage facilities owned by the Partnership and others. The Partnership also engages in marketing crude oil that is purchased at production leases and transported on its pipelines. The Partnership refers to its pipeline system located in Oklahoma and the Texas Panhandle as the Mid-Continent system. It refers to its second pipeline system, which is located in Texas, as the East Texas system. The Partnership refers to its third system, originating in Cushing, Oklahoma, and terminating in Ardmore, Oklahoma, as the Eagle North system. CRUDE OIL TRUCKING AND PRODUCER FIELD SERVICES — The Partnership uses its owned and leased tanker trucks to gather crude oil for its customers at remote wellhead locations generally not covered by pipeline and gathering systems and to transport the crude oil to aggregation points and storage facilities located along pipeline gathering and transportation systems. Crude oil producer field services consist of a number of producer field services, ranging from gathering condensates from natural gas companies to hauling produced water to disposal wells. The Partnership’s management evaluates performance based upon segment operating margin, which includes revenues from related parties and external customers less operating expenses excluding depreciation and amortization. The non-GAAP measure of operating margin, excluding depreciation and amortization, (in the aggregate and by segment) is presented in the following table. The Partnership computes the components of operating margin by using amounts that are determined in accordance with GAAP. A reconciliation of operating margin, excluding depreciation and amortization, to income before income taxes, which is its nearest comparable GAAP financial measure, is included in the following table. The Partnership believes that investors benefit from having access to the same financial measures being utilized by management. Operating margin, excluding depreciation and amortization, is an important measure of the economic performance of the Partnership’s core operations. This measure forms the basis of the Partnership’s internal financial reporting and is used by its management in deciding how to allocate capital resources among segments. Income before income taxes, alternatively, includes expense items, such as depreciation and amortization, general and administrative expenses and interest expense, which management does not consider when evaluating the core profitability of the Partnership’s operations. The following table reflects certain financial data for each segment for the periods indicated (in thousands):
____________________ (1)The following table reconciles segment operating margin (excluding depreciation and amortization) to income before income taxes (in thousands):
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COMMITMENTS AND CONTINGENCIES |
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Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENT AND CONTINGENCIES | OMMITMENTS AND CONTINGENCIES The Partnership is from time to time subject to various legal actions and claims incidental to its business. Management believes that these legal proceedings will not have a material adverse effect on the financial position, results of operations or cash flows of the Partnership. Once management determines that information pertaining to a legal proceeding indicates that it is probable that a liability has been incurred and the amount of such liability can be reasonably estimated, an accrual is established equal to its estimate of the likely exposure. The Partnership may become the subject of additional private or government actions regarding these matters in the future. Litigation may be time-consuming, expensive and disruptive to normal business operations, and the outcome of litigation is difficult to predict. The defense of these lawsuits may result in the incurrence of significant legal expense, both directly and as the result of the Partnership’s indemnification obligations. The litigation may also divert management’s attention from the Partnership’s operations which may cause its business to suffer. An unfavorable outcome in any of these matters may have a material adverse effect on the Partnership’s business, financial condition, results of operations, cash flows, ability to make distributions to its unitholders, the trading price of the Partnership’s common units and its ability to conduct its business. All or a portion of the defense costs and any amount the Partnership may be required to pay to satisfy a judgment or settlement of these claims may or may not be covered by insurance. The Partnership has contractual obligations to perform dismantlement and removal activities in the event that some of its asphalt product and residual fuel oil terminalling and storage assets are abandoned. These obligations include varying levels of activity including completely removing the assets and returning the land to its original state. The Partnership has determined that the settlement dates related to the retirement obligations are indeterminate. The assets with indeterminate settlement dates have been in existence for many years and with regular maintenance will continue to be in service for many years to come. Also, it is not possible to predict when demands for the Partnership’s terminalling and storage services will cease, and the Partnership does not believe that such demand will cease for the foreseeable future. Accordingly, the Partnership believes the date when these assets will be abandoned is indeterminate. With no reasonably determinable abandonment date, the Partnership cannot reasonably estimate the fair value of the associated asset retirement obligations. Management believes that if the Partnership’s asset retirement obligations were settled in the foreseeable future the present value of potential cash flows that would be required to settle the obligations based on current costs are not material. The Partnership will record asset retirement obligations for these assets in the period in which sufficient information becomes available for it to reasonably determine the settlement dates. |
INCOME TAXES |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||
INCOME TAXES | INCOME TAXES The anticipated after-tax economic benefit of an investment in the Partnership’s units depends largely on the Partnership being treated as a partnership for federal income tax purposes. If less than 90% of the gross income of a publicly traded partnership, such as the Partnership, for any taxable year is “qualifying income” from sources such as the transportation, storage, marketing (other than to end users), or processing of crude oil, natural gas or products thereof, rents from real property leased to unrelated parties, interest, dividends or certain other specified sources, that partnership will be taxable as a corporation under Section 7704 of the Internal Revenue Code for federal income tax purposes for that taxable year and all subsequent years. If the Partnership were treated as a corporation for federal income tax purposes, then it would pay federal income tax on its income at the corporate tax rate, which is currently a maximum of 35%, and would likely pay state income tax at varying rates. Distributions would generally be taxed again to unitholders as corporate distributions and none of the Partnership’s income, gains, losses, deductions or credits would flow through to its unitholders. Because a tax would be imposed upon the Partnership as an entity, cash available for distribution to its unitholders would be substantially reduced. Treatment of the Partnership as a corporation would result in a material reduction in the anticipated cash flow and after-tax return to unitholders and thus would likely result in a substantial reduction in the value of the Partnership’s units. The Partnership has entered into storage contracts with third party customers and leases with third party lessees with respect to all of its asphalt facilities. In the second quarter of 2009, the Partnership submitted a request for a ruling from the IRS that rental income from the leases constitutes “qualifying income.” In October 2009, the Partnership received a favorable ruling from the IRS to the effect that rental income received under the leases with third party lessees constitutes qualifying income. As part of this ruling, however, the Partnership agreed to transfer, and has transferred, certain of its asphalt processing assets and related fee income to a subsidiary taxed as a corporation. This transfer occurred in the first quarter of 2010. Such subsidiary’s income is subject to tax at the applicable federal, state and local income tax rates. Distributions from this subsidiary generally are taxed again to the Partnership’s unitholders as corporate distributions and none of the income, gains, losses, deductions or credits of this subsidiary will flow through to the Partnership’s unitholders. In relation to the Partnership’s taxable subsidiary, the tax effects of temporary differences between the tax basis of assets and liabilities and their financial reporting amounts at September 30, 2016, are presented below (dollars in thousands):
The Partnership has considered the taxable income projections in future years, whether the carryforward period is so brief that it would limit realization of tax benefits, whether future revenue and operating cost projections will produce enough taxable income to realize the deferred tax asset based on existing service rates and cost structures, and the Partnership’s earnings history exclusive of the loss that created the future deductible amount for the Partnership’s subsidiary that is taxed as a corporation for purposes of determining the likelihood of realizing the benefits of the deferred tax assets. As a result of the Partnership’s consideration of these factors, the Partnership has provided a full valuation allowance against its deferred tax asset as of September 30, 2016. |
RECENTLY ISSUED ACCOUNTING STANDARDS |
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Sep. 30, 2016 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
RECENTLY ISSUED ACCOUNTING STANDARDS | ECENTLY ISSUED ACCOUNTING STANDARDS Except as discussed below and in our 2015 Annual Report on Form 10-K, there have been no new accounting pronouncements that have become effective or have been issued during the nine months ended September 30, 2016 that are of significance or potential significance to us. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers.” The amendments in this update create Topic 606, Revenue from Contracts with Customers, and supersede the revenue recognition requirements in Topic 605, Revenue Recognition, including most industry-specific revenue recognition guidance throughout the Industry Topics of the Codification. In addition, the amendments supersede the cost guidance in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts, and create new Subtopic 340-40, Other Assets and Deferred Costs-Contracts with Customers. In summary, the core principle of Topic 606 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued Accounting Standards Update No. 2015-14, “Revenue from Contracts with Customers.” The amendment in this update deferred the effective date of ASU 2014-09 by one year to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. In March 2016, the FASB issued ASU 2016-08, “Revenue from Contracts with Customers (Topic 606) Principal versus Agent Considerations.” This update offers guidance on principal versus agent considerations in relation to ASU 2014-09, “Revenue from Contracts with Customers.” The effective date for the amendments in this update are the same as the effective date of ASU 2014-09. In March 2016, the FASB also issued ASU 2016-10, “Revenue from Contracts with Customers (Topic 606) Identifying Performance Obligations and Licensing.” This update offers guidance on identifying performance obligations and licensing in relation to ASU 2014-09, “Revenue from Contracts with Customers.” The effective date for the amendments in this update are the same as the effective date of ASU 2014-09. In May 2016, the FASB issued ASU 2016-12, “Revenue from Contracts with Customers (Topic 606) Narrow-Scope Improvements and Practical Expedients.” This update is issued in relation to ASU 2014-09, “Revenue from Contracts with Customers” and is intended to reduce the potential for diversity if practice at initial application and also to reduce the cost and complexity of applying Topic 606 both at transition and on an ongoing basis. The effective date for the amendments in this update are the same as the effective date of ASU 2014-09. The Partnership is evaluating the impact of this guidance, which will be adopted beginning with the Partnership’s quarterly report for the period ending March 31, 2018. In March 2016, the FASB issued ASU 2016-09, “Compensation - Stock Compensation (Topic 718).” This update is intended to simplify the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This update is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those fiscal years. The Partnership has evaluated the impact of this guidance, which will be adopted beginning with the Partnership’s quarterly report for the period ending March 31, 2017, and does not anticipate a material impact on the Partnership’s financial position, results of operations or cash flows. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments.” This update provides financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The amendments in this update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. This update is effective for financial statements issued for annual periods beginning after December 15, 2019, and interim periods within those fiscal years. The Partnership is evaluating the impact of this guidance, which will be adopted beginning with the Partnership’s quarterly report for the period ending March 31, 2020. In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.” This update addresses the following eight specific cash flow issues: debt prepayment or debt extinguishment costs; settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies (COLIs) (including bank-owned life insurance policies (BOLIs)); distributions received from equity method investees; beneficial interests in securitization transactions; and separately identifiable cash flows and application of the predominance principle. This update is effective for financial statements issued for annual periods beginning after December 15, 2017, and interim periods within those fiscal years. The Partnership is evaluating the impact of this guidance, which will be adopted beginning with the Partnership’s quarterly report for the period ending March 31, 2018. |
SUBSEQUENT EVENTS (Notes) |
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Sep. 30, 2016 | |
Subsequent Event [Line Items] | |
Subsequent Events [Text Block] | UBSEQUENT EVENTS Ergon Transactions Membership Interest Purchase Agreement On July 19, 2016, the Partnership announced that Ergon agreed to purchase 100% of the outstanding voting stock of Blueknight GP Holding, L.L.C., which owns 100% of the capital stock of the Partnership’s General Partner, pursuant to a Membership Interest Purchase Agreement dated July 19, 2016 among CBB, an indirect wholly-owned subsidiary of Charlesbank, BEHI, an indirect wholly-owned subsidiary of Vitol, and Ergon Asphalt Holdings, LLC, a wholly-owned subsidiary of Ergon. This transaction was consummated on October 5, 2016. Contribution Agreement In addition, Ergon (i) contributed nine asphalt terminals plus $22.1 million in cash to the Partnership in return for total consideration of approximately $130.9 million, which consists of the issuance of 18,312,968 of the Partnership’s Series A preferred units in a private placement, and (ii) acquired an aggregate of $5.0 million of common units for cash in a private placement, pursuant to a Contribution Agreement between the Partnership, Blueknight Terminal Holding, L.L.C., and three indirect wholly-owned subsidiaries of Ergon. The asphalt terminals are located in (i) Wolcott, Kansas, (ii) Ennis, Texas, (iii) Chandler, Arizona, (iv) Mt. Pleasant, Texas, (v) Pleasanton, Texas, (vi) Birmingport, Alabama, (vii) Memphis, Tennessee, (viii) Nashville, Tennessee and (ix) Yellow Creek, Mississippi and include approximately 2.0 million barrels of storage capacity. As of the closing of the transactions in the Contribution Agreement, the Partnership owns a network of 54 asphalt terminals in 26 states with a combined capacity of 9.6 million barrels of asphalt and residual fuel oil storage. As a result of this acquisition which was completed on October 5, 2016, the Partnership’s consolidated results of operations will include the results of the acquired Ergon business beginning in the fourth quarter of 2016. The Partnership has not completed the detailed valuation work necessary to arrive at the required estimates of the fair value of the acquired assets and liabilities assumed and the related allocation of purchase price. The Partnership’s preliminary allocation of purchase price to the assets acquired and liabilities assumed will be included in the Partnership’s future filings. Storage, Throughput and Handling Agreement In connection with the consummation of the transactions described above, the Partnership and Ergon entered that certain Storage, Throughput and Handling Agreement, dated October 5, 2016 (the “Storage, Throughput and Handling Agreement”). Pursuant to the Storage, Throughput and Handling Agreement, the Partnership’s subsidiaries operate certain asphalt terminals, storage tanks and related real property, contracts, permits, assets and other interests (the “Terminal Assets”) previously owned by Ergon, and store and terminal Ergon’s asphalt products at the Terminal Assets, in exchange for the payment of certain fees by Ergon. The term of the related party agreement began on October 5, 2016, and will continue for a period of seven years. The related party agreement will then continue on a year-to-year basis unless cancelled by either party by delivering not less than 180 days’ notice. Each party has agreed to indemnify the other party (and its affiliates) for any and all liabilities arising from (i) its breach of the Storage, Throughput and Handling Agreement, (ii) its negligence or willful misconduct, or the negligence or willful misconduct of an affiliate, or (iii) its failure to comply with law with respect to the sale, transportation, storage, handling or disposal of product. Omnibus Agreement In connection with the consummation of the transactions described above, the General Partner, the Partnership and certain of the Partnership’s subsidiaries entered into the Omnibus Agreement, dated as of October 5, 2016 (the “Omnibus Agreement”) with Ergon pursuant to which Ergon was granted a right of first offer with respect to the (i) Wolcott, Kansas Asphalt Terminal; (ii) Ennis, Texas Asphalt Terminal; (iii) Chandler, Arizona Asphalt/Emulsion Terminal; (iv) Mt. Pleasant, Texas Emulsion Terminal; (v) Pleasanton, Texas Emulsion Terminal; (vi) Birmingport, Alabama Asphalt/Polymer/Emulsion Terminal; (vii) Memphis, Tennessee Asphalt/Polymer/Emulsion Terminal; (viii) Nashville, Tennessee Asphalt/Polymer Terminal; (ix) Yellow Creek, Mississippi Asphalt Terminal; (x) Fontana, California Asphalt/Emulsion Terminal; and (xi) Las Vegas, Nevada Asphalt/Emulsion/Polymer Terminal (collectively, the “ROFO Assets”) to the extent that the owner of the ROFO Assets proposes to transfer such ROFO Asset while the Omnibus Agreement is in effect. In addition, the Omnibus Agreement also granted Ergon a right of first refusal to purchase the (i) Fontana, California Asphalt/Emulsion Terminal and (ii) Las Vegas, Nevada Asphalt/Emulsion/Polymer Terminal (together, the “ROFR Assets”) if any owner of the ROFR Assets proposes or intends to sell any ROFR Asset to a third party through the period ending December 31, 2018. Preferred Unit Purchase Agreement Pursuant to a Preferred Unit Purchase Agreement dated July 19, 2016 among the Partnership, CBB and BEHI, on October 5, 2016, the Partnership purchased 6,667,695 Series A preferred units from each of Vitol and Charlesbank in a private placement for an aggregate purchase price of approximately $95.3 million. Vitol and Charlesbank each retained 2,488,789 (4,977,578 in aggregate) Series A preferred units upon completion of these transactions. |
RESTRUCTURING CHARGES (Tables) |
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Crude Oil Trucking and Producer Field Services [Member] | West Texas Trucking Market Exit Plan [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Restructuring and Related Costs [Table Text Block] | Changes in the accrued amounts pertaining to the restructuring charges are summarized as follows:
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EQUITY METHOD INVESTMENT (Tables) |
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Schedule of Equity Method Investments [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments [Table Text Block] | Summarized financial information for Advantage Pipeline is set forth in the tables below for the periods indicated (in thousands):
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PROPERTY, PLANT AND EQUIPMENT (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property, Plant and Equipment |
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NET INCOME PER LIMITED PARTNER UNIT (Tables) |
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Basic and Diluted Net Income (Loss) Per Common and Subordinated Units | The following sets forth the computation of basic and diluted net income per common unit (in thousands, except per unit data):
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LONG-TERM INCENTIVE PLAN (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Compensation Arrangement by Share-based Payment Award, Restricted Stock Units, Vested and Expected to Vest [Table Text Block] | In connection with each anniversary of joining the Board, restricted common units are granted to the independent directors. The units vest in one-third increments over three years. The following table includes information on grants made to the directors under the LTIP:
_________________ (1) Fair value is the closing market price on the grant date of the awards. |
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Schedule Of Phantom Common Units And Restricted Common Units Activity | Activity pertaining to phantom common units and restricted common unit awards granted under the Plan is as follows:
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Disclosure of Share-based Compensation Arrangements by Share-based Payment Award [Table Text Block] | The Partnership also grants phantom units to employees. These grants are equity awards under ASC 718 – Stock Compensation, and, accordingly, the fair value of the awards as of the grant date is expensed over the vesting period. The following table includes information on the outstanding grants:
_________________ (1) Fair value is the closing market price on the grant date of the awards. |
FAIR VALUE MEASUREMENTS Fair Value Measurements (Tables) |
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, by Balance Sheet Grouping [Table Text Block] | The Partnership’s recurring financial assets and liabilities subject to fair value measurements and the necessary disclosures are as follows (in thousands):
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OPERATING SEGMENTS (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment | The following table reflects certain financial data for each segment for the periods indicated (in thousands):
____________________ (1)The following table reconciles segment operating margin (excluding depreciation and amortization) to income before income taxes (in thousands):
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INCOME TAXES (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||
Schedule of Deferred Tax Assets | In relation to the Partnership’s taxable subsidiary, the tax effects of temporary differences between the tax basis of assets and liabilities and their financial reporting amounts at September 30, 2016, are presented below (dollars in thousands):
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ORGANIZATION AND NATURE OF BUSINESS (Narrative) (Details) |
9 Months Ended | |
---|---|---|
Sep. 30, 2016
Operating-segments
States
|
Jul. 19, 2016 |
|
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | ||
Number of states in which entity operates (in states) | States | 27 | |
Number of operating segments (in operating segments) | Operating-segments | 4 | |
Blueknight GP Holding, LLC [Member] | ||
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | ||
Business Acquisition, Percentage of Voting Interests Acquired | 100.00% | |
General Partner [Member] | ||
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | ||
Business Acquisition, Percentage of Voting Interests Acquired | 100.00% |
RESTRUCTURING CHARGES (Details) - West Texas Trucking Market Exit Plan [Member] - Crude Oil Trucking and Producer Field Services [Member] - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Dec. 31, 2015 |
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Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Reserve | $ 603 | $ 603 | $ 795 | $ 1,565 |
Charged to expense | 0 | 0 | ||
Cash payments | $ (192) | $ (962) |
NET INCOME PER LIMITED PARTNER UNIT (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
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Earnings Per Share [Abstract] | ||||
Net income (loss) | $ 11,419 | $ 13,967 | $ (6,791) | $ 23,258 |
General partner interest in net income | 341 | 376 | 291 | 720 |
Preferred interest in net income | 6,279 | 5,391 | 17,058 | 16,173 |
Income (loss) available to limited partners | $ 4,799 | $ 8,200 | $ (24,140) | $ 6,365 |
Basic weighted average number of units: | ||||
Weighted average common units outstanding - basic | 36,036 | 32,947 | 34,139 | 32,919 |
Restricted and phantom units | 876 | 721 | 799 | 675 |
Weighted average common units outstanding - diluted | 36,036 | 63,875 | 34,139 | 32,919 |
Basic net income (loss) per common unit | $ 0.13 | $ 0.24 | $ (0.69) | $ 0.19 |
Diluted net income (loss) per common unit | $ 0.13 | $ 0.21 | $ (0.69) | $ 0.19 |
PARTNERS' CAPITAL AND DISTRIBUTIONS (Narrative) (Details) $ / shares in Units, $ in Millions |
3 Months Ended |
---|---|
Sep. 30, 2016
USD ($)
$ / shares
| |
Phantom Share Units and Restricted Units [Member] | |
Distribution Made to Member or Limited Partner, Cash Distributions Declared | $ 0.1 |
Common Stock [Member] | |
Distribution Made to Member or Limited Partner, Cash Distributions Declared | $ 5.5 |
Limited Partner [Member] | |
Distribution Made to Member or Limited Partner, Distributions Declared (in dollars per unit) | $ / shares | $ 0.1450 |
Distribution Made to Member or Limited Partner, Cash Distributions Declared | $ 6.0 |
General Partner Interest [Member] | |
Distribution Made to Member or Limited Partner, Cash Distributions Declared | $ 0.4 |
Preferred Partner [Member] | |
Distribution Made to Member or Limited Partner, Distributions Declared (in dollars per unit) | $ / shares | $ 0.17875 |
Distribution Made to Member or Limited Partner, Cash Distributions Declared | $ 6.3 |
PARTNERS' CAPITAL AND DISTRIBUTIONS Issuances Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands |
9 Months Ended | ||
---|---|---|---|
Oct. 05, 2016 |
Jul. 26, 2016 |
Sep. 30, 2016 |
|
Capital Unit [Line Items] | |||
Limited Partners' Capital Account, Units Issued | 3,795,000 | 71,807 | |
Sale of Stock, Price Per Share | $ 5.90 | ||
Proceeds from equity issuance, net of offering costs | $ 348 | ||
Limited Partners' Offering Costs | $ 1,400 | ||
Limited Partner [Member] | |||
Capital Unit [Line Items] | |||
Proceeds from equity issuance, net of offering costs | $ 21,200 | $ 348 | |
Subsequent Event [Member] | |||
Capital Unit [Line Items] | |||
Proceeds from equity issuance, net of offering costs | $ 5,000 |
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
Dec. 31, 2015 |
|
Related Party Transaction [Line Items] | |||||
Related party revenue | $ 5,734 | $ 10,857 | $ 18,605 | $ 31,275 | |
Receivables from related parties | 1,262 | 1,262 | $ 1,844 | ||
Vitol [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related party revenue | 5,400 | 10,500 | 17,600 | 30,300 | |
Receivables from related parties | 1,200 | 1,200 | 1,800 | ||
Due to Related Parties | 100 | 100 | 800 | ||
Advantage Pipeline, L.L.C. [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related party revenue | 300 | $ 400 | 1,000 | $ 1,000 | |
Receivables from related parties | $ 100 | $ 100 | $ 100 |
EMPLOYEE BENEFIT PLAN (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Defined Contribution Plan Disclosure [Line Items] | ||||
Employee Stock Ownership Plan (ESOP), Compensation Expense | $ 0.1 | $ 0.1 | $ 0.1 | $ 0.1 |
Defined Contribution Pension [Member] | ||||
Defined Contribution Plan Disclosure [Line Items] | ||||
Employer discretionary contribution amount | 0.3 | 0.4 | 0.9 | 1.2 |
Deferred Profit Sharing [Member] | ||||
Defined Contribution Plan Disclosure [Line Items] | ||||
Employer discretionary contribution amount | $ 0.2 | $ 0.3 | $ 0.5 | $ 0.6 |
EMPLOYEE BENEFIT PLAN EUPP (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
EUPP [Abstract] | ||||
Employee Stock Ownership Plan (ESOP), Shares in ESOP | 1,000,000 | 1,000,000 | ||
Employee Stock Ownership Plan (ESOP), Compensation Expense | $ 0.1 | $ 0.1 | $ 0.1 | $ 0.1 |
FAIR VALUE MEASUREMENTS Fair Value Measurements (Details) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate swap liabilities | $ 3,989 | $ 3,103 |
Total | 3,989 | 3,103 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate swap liabilities | 0 | 0 |
Total | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate swap liabilities | 3,989 | |
Total | 3,989 | 3,103 |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate swap liabilities | 0 | 0 |
Total | $ 0 | $ 0 |
OPERATING SEGMENTS (Details) $ in Thousands |
3 Months Ended | 9 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016
USD ($)
States
Terminalling_And_Storage_Facilities
|
Sep. 30, 2015
USD ($)
|
Sep. 30, 2016
USD ($)
Operating-segments
States
Terminalling_And_Storage_Facilities
Pipeline_Systems
|
Sep. 30, 2015
USD ($)
|
Oct. 05, 2016
States
Terminalling_And_Storage_Facilities
|
Dec. 31, 2015
USD ($)
|
||||
Segment Reporting Information [Line Items] | |||||||||
Number of operating segments (in operating segments) | Operating-segments | 4 | ||||||||
Service revenue | |||||||||
Third party revenue | $ 35,600 | $ 36,360 | $ 96,711 | $ 104,872 | |||||
Related party revenue | 5,734 | 10,857 | 18,605 | 31,275 | |||||
Cost of product sales | 3,513 | 0 | 10,789 | 0 | |||||
Third party revenue | 5,605 | 0 | 16,058 | 0 | |||||
Total revenue for reportable segments | 46,939 | 47,217 | 131,374 | 136,147 | |||||
Operating margin (excluding depreciation and amortization) | [1] | 25,783 | 22,297 | 62,718 | 58,842 | ||||
Total assets (end of period) | 354,006 | 354,006 | $ 364,746 | ||||||
Reconciles segment operating margin (excluding depreciation and amortization) to income before income taxes | |||||||||
Operating margin (excluding depreciation and amortization) | [1] | 25,783 | 22,297 | 62,718 | 58,842 | ||||
Depreciation and amortization | (7,624) | (6,758) | (22,447) | (20,141) | |||||
General and administrative expenses | (4,865) | (4,742) | (14,447) | (14,386) | |||||
Asset impairment expense | 0 | 0 | (22,845) | 0 | |||||
Gain on sale of assets | 104 | 6,213 | 85 | 6,477 | |||||
Interest expense | (2,175) | (4,343) | (10,742) | (10,576) | |||||
Equity earnings in unconsolidated affiliate | 305 | 1,399 | 1,086 | 3,338 | |||||
Income (loss) before income taxes | $ 11,528 | 14,066 | $ (6,592) | 23,554 | |||||
Asphalt Services [Member] | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Number of terminalling and storage facilities providing asphalt product and residual fuel terminalling storage and blending services (in terminalling and storage facilities) | Terminalling_And_Storage_Facilities | 45 | 45 | |||||||
Number of states where Asphalt terminalling and storage facilities are located | States | 23 | 23 | |||||||
Service revenue | |||||||||
Third party revenue | $ 25,217 | 21,307 | $ 60,656 | 54,934 | |||||
Related party revenue | 242 | 482 | 800 | 887 | |||||
Total revenue for reportable segments | 25,459 | 21,789 | 61,456 | 55,821 | |||||
Operating expenses (excluding depreciation and amortization) | 6,467 | 6,308 | 19,737 | 19,067 | |||||
Operating margin (excluding depreciation and amortization) | 18,992 | 15,481 | 41,719 | 36,754 | |||||
Total assets (end of period) | 114,703 | 101,434 | 114,703 | 101,434 | |||||
Reconciles segment operating margin (excluding depreciation and amortization) to income before income taxes | |||||||||
Operating margin (excluding depreciation and amortization) | 18,992 | 15,481 | 41,719 | 36,754 | |||||
Crude Oil Terminalling and Storage Services [Member] | |||||||||
Service revenue | |||||||||
Third party revenue | 3,444 | 3,524 | 10,631 | 9,721 | |||||
Related party revenue | 2,344 | 3,041 | 7,747 | 9,052 | |||||
Total revenue for reportable segments | 5,788 | 6,565 | 18,378 | 18,773 | |||||
Operating expenses (excluding depreciation and amortization) | 776 | 1,325 | 3,071 | 4,582 | |||||
Operating margin (excluding depreciation and amortization) | 5,012 | 5,240 | 15,307 | 14,191 | |||||
Total assets (end of period) | 74,807 | 73,628 | 74,807 | 73,628 | |||||
Reconciles segment operating margin (excluding depreciation and amortization) to income before income taxes | |||||||||
Operating margin (excluding depreciation and amortization) | 5,012 | 5,240 | $ 15,307 | 14,191 | |||||
Crude Oil Pipeline Services [Member] | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Number of pipelines systems owned and operated (in pipeline systems) | Pipeline_Systems | 3 | ||||||||
Service revenue | |||||||||
Third party revenue | 1,107 | 2,594 | $ 6,061 | 11,107 | |||||
Related party revenue | 1,665 | 3,301 | 4,970 | 8,291 | |||||
Cost of product sales | 3,513 | 0 | 10,789 | 0 | |||||
Third party revenue | 5,605 | 0 | 16,058 | 0 | |||||
Total revenue for reportable segments | 8,377 | 5,895 | 27,089 | 19,398 | |||||
Operating expenses (excluding depreciation and amortization) | 3,349 | 4,855 | 11,288 | 13,589 | |||||
Inter-segment Operating Expenses | 197 | 0 | 692 | 0 | |||||
Operating margin (excluding depreciation and amortization) | 1,318 | 1,040 | 3,894 | 5,809 | |||||
Total assets (end of period) | 151,341 | 192,945 | 151,341 | 192,945 | |||||
Reconciles segment operating margin (excluding depreciation and amortization) to income before income taxes | |||||||||
Operating margin (excluding depreciation and amortization) | 1,318 | 1,040 | 3,894 | 5,809 | |||||
Asset impairment expense | (22,600) | ||||||||
Inter-Segment Cost of Purchased Oil and Gas | 0 | 0 | 426 | 0 | |||||
Crude Oil Trucking and Producer Field Services [Member] | |||||||||
Service revenue | |||||||||
Third party revenue | 5,832 | 8,935 | 19,363 | 29,110 | |||||
Related party revenue | 1,483 | 4,033 | 5,088 | 13,045 | |||||
Total revenue for reportable segments | 7,512 | 12,968 | 25,569 | 42,155 | |||||
Operating expenses (excluding depreciation and amortization) | 7,051 | 12,432 | 23,771 | 40,067 | |||||
Operating margin (excluding depreciation and amortization) | 461 | 536 | 1,798 | 2,088 | |||||
Total assets (end of period) | 13,155 | 15,023 | 13,155 | 15,023 | |||||
Reconciles segment operating margin (excluding depreciation and amortization) to income before income taxes | |||||||||
Operating margin (excluding depreciation and amortization) | 461 | 536 | 1,798 | 2,088 | |||||
Intersegment Revenues | 197 | 0 | 692 | 0 | |||||
Inter-Segment Sales Revenue, Goods, Net | 0 | 0 | 426 | 0 | |||||
Operating Segments [Member] | |||||||||
Service revenue | |||||||||
Total revenue for reportable segments | 47,136 | 47,217 | 132,492 | 136,147 | |||||
Reconciles segment operating margin (excluding depreciation and amortization) to income before income taxes | |||||||||
Intersegment Revenues | $ (197) | $ 0 | $ (1,118) | $ 0 | |||||
Subsequent Event [Member] | Asphalt Services [Member] | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Number of terminalling and storage facilities providing asphalt product and residual fuel terminalling storage and blending services (in terminalling and storage facilities) | Terminalling_And_Storage_Facilities | 54 | ||||||||
Number of states where Asphalt terminalling and storage facilities are located | States | 26 | ||||||||
|
INCOME TAXES (Details) $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2016
USD ($)
| |
Income Tax Disclosure [Abstract] | |
Gross income of a partnership, for any taxable year is qualifying income will be taxable as a corporation for federal income tax purposes for that taxable year and all subsequent years, maximum (as a percent) | 90.00% |
Federal statutory income tax rate (as a percent) | 35.00% |
Valuation Allowance [Line Items] | |
Difference in bases of property, plant and equipment | $ 859 |
Deferred tax asset | 859 |
Less: valuation allowance | 859 |
Net deferred tax asset | $ 0 |
SUBSEQUENT EVENTS (Details) $ in Thousands, bbl in Millions |
9 Months Ended | |||
---|---|---|---|---|
Oct. 05, 2016
USD ($)
States
Terminalling_And_Storage_Facilities
shares
bbl
|
Sep. 30, 2016
USD ($)
States
Terminalling_And_Storage_Facilities
|
Sep. 30, 2015
USD ($)
|
Jul. 19, 2016 |
|
Subsequent Event [Line Items] | ||||
Proceeds from Partnership Contribution | $ | $ 18,989 | $ 13,895 | ||
Proceeds from equity issuance, net of offering costs | $ | $ 348 | |||
Asphalt Services [Member] | ||||
Subsequent Event [Line Items] | ||||
Number of terminalling and storage facilities providing asphalt product and residual fuel terminalling storage and blending services (in terminalling and storage facilities) | Terminalling_And_Storage_Facilities | 45 | |||
Number of states where Asphalt terminalling and storage facilities are located | States | 23 | |||
Blueknight GP Holding, LLC [Member] | ||||
Subsequent Event [Line Items] | ||||
Business Acquisition, Percentage of Voting Interests Acquired | 100.00% | |||
General Partner Interest [Member] | ||||
Subsequent Event [Line Items] | ||||
Business Acquisition, Percentage of Voting Interests Acquired | 100.00% | |||
Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
General Partners' Contributed Capital | $ | $ 130,900 | |||
Proceeds from equity issuance, net of offering costs | $ | $ 5,000 | |||
Number of Barrels | bbl | 9.6 | |||
Subsequent Event [Member] | Asphalt Services [Member] | ||||
Subsequent Event [Line Items] | ||||
Number of terminalling and storage facilities providing asphalt product and residual fuel terminalling storage and blending services (in terminalling and storage facilities) | Terminalling_And_Storage_Facilities | 54 | |||
Number of states where Asphalt terminalling and storage facilities are located | States | 26 | |||
Subsequent Event [Member] | Ergon [Member] | ||||
Subsequent Event [Line Items] | ||||
Proceeds from Partnership Contribution | $ | $ 22,100 | |||
Subsequent Event [Member] | Series A Preferred Stock [Member] | ||||
Subsequent Event [Line Items] | ||||
Partners' Capital Account, Units, Sold in Private Placement | shares | 18,312,968 | |||
Stock Issued During Period, Shares, New Issues | $ | $ 95,300 | |||
Preferred Stock, Shares Outstanding | shares | 4,977,578 | |||
Subsequent Event [Member] | Series A Preferred Stock [Member] | Charlesbank [Member] | ||||
Subsequent Event [Line Items] | ||||
Partners' Capital Account, Units, Sold in Private Placement | shares | 6,667,695 | |||
Preferred Stock, Shares Outstanding | shares | 2,488,789 | |||
Subsequent Event [Member] | Series A Preferred Stock [Member] | Vitol [Member] | ||||
Subsequent Event [Line Items] | ||||
Partners' Capital Account, Units, Sold in Private Placement | shares | 6,667,695 | |||
Preferred Stock, Shares Outstanding | shares | 2,488,789 | |||
Subsequent Event [Member] | Blueknight GP Holding, LLC [Member] | ||||
Subsequent Event [Line Items] | ||||
Number of Barrels | bbl | 2.0 | |||
Subsequent Event [Member] | Blueknight GP Holding, LLC [Member] | Ergon [Member] | ||||
Subsequent Event [Line Items] | ||||
Number of terminalling and storage facilities providing asphalt product and residual fuel terminalling storage and blending services (in terminalling and storage facilities) | Terminalling_And_Storage_Facilities | 9 |
SUBSEQUENT EVENTS - Credit Facility (Details) |
9 Months Ended | |||
---|---|---|---|---|
Sep. 30, 2016
USD ($)
|
Dec. 31, 2015
USD ($)
|
Sep. 30, 2015
USD ($)
|
Dec. 31, 2014
USD ($)
|
|
Subsequent Event [Line Items] | ||||
Cash and cash equivalents | $ 4,285,000 | $ 3,038,000 | $ 1,136,000 | $ 2,661,000 |
Aggregate Principal Below Threshold [Member] | Revolving Credit Facility [Member] | ||||
Subsequent Event [Line Items] | ||||
Debt Instrument Covenant, Issued Qualified Senior Notes | $ 200,000,000 | |||
Consolidated total leverage (as a ratio), Maximum permitted | 5.00 | |||
Cash and cash equivalents | $ 20,000,000 | |||
Minimum Acquisition Costs | 15,000,000.0 | |||
Aggregate Principal Above Threshold [Member] | Revolving Credit Facility [Member] | ||||
Subsequent Event [Line Items] | ||||
Debt Instrument Covenant, Issued Qualified Senior Notes | $ 200,000,000 | |||
Provision One, Applicable Period One [Member] | Aggregate Principal Below Threshold [Member] | Revolving Credit Facility [Member] | ||||
Subsequent Event [Line Items] | ||||
Consolidated total leverage (as a ratio), Maximum permitted | 5.00 | |||
Provision One, Applicable Period One [Member] | Aggregate Principal Above Threshold [Member] | Revolving Credit Facility [Member] | ||||
Subsequent Event [Line Items] | ||||
Consolidated total leverage (as a ratio), Maximum permitted | 5.00 | |||
Provision One, Applicable Period Two [Member] | Aggregate Principal Below Threshold [Member] | Revolving Credit Facility [Member] | ||||
Subsequent Event [Line Items] | ||||
Consolidated total leverage (as a ratio), Maximum permitted | 4.75 | |||
Provision One, Applicable Period Three [Member] | Aggregate Principal Below Threshold [Member] | Revolving Credit Facility [Member] | ||||
Subsequent Event [Line Items] | ||||
Consolidated total leverage (as a ratio), Maximum permitted | 5.25 | |||
Provision Two, Applicable Period Two [Member] | Aggregate Principal Above Threshold [Member] | Revolving Credit Facility [Member] | ||||
Subsequent Event [Line Items] | ||||
Consolidated total leverage (as a ratio), Maximum permitted | 5.50 |
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