Subsequent Event

9 Months Ended

Sep. 30, 2020

Subsequent Events [Abstract]

Subsequent Event

Subsequent Event

On October 22, 2020, we acquired the outstanding equity interests of Victoria Express Pipeline, LLC (“VEX”) and certain related pipeline terminal facility assets from EnLink Midstream Operating, L.P. for $20.0 million. Of the total purchase price, $10.0 million was paid at closing, with the remainder to be paid in four quarterly installments of $2.5 million, plus interest at a rate of 4.0% per annum, beginning in March 2021. The equity interests in GulfMark Terminals, LLC, VEX and the other acquired assets were pledged to secure the payment of the installment portions of the purchase price as part of the agreement.

The VEX Pipeline System, with truck and storage terminals at both Cuero and the Port of Victoria, Texas, is a crude oil and condensate pipeline system, which connects the heart of the Eagle Ford Basin to the Gulf Coast waterborne market. The VEX Pipeline System includes 56 miles of 12-inch pipeline, which spans DeWitt county to Victoria County, Texas, with 350,000 barrels of above ground storage, two 8 bay truck offload stations, and access to two docks at the Port of Victoria. The VEX Pipeline System can receive crude oil by pipeline and truck, and has downstream pipeline connections to two terminals today, with potential for additional downstream connection opportunities in the future. The pipeline system has a current capacity of 90,000 barrels per day.

We plan to integrate the VEX Pipeline System into our Gulf Coast marketing business, which we expect will further strengthen our ability to provide excellent service to the producers in the region, as well as more effectively service our end-user markets along the Gulf Coast. In addition, the VEX Pipeline System complements our existing storage terminal and dock at the Port of Victoria, where we now control 450,000 barrels of storage with three docks after giving effect to the acquisition.