BLUEKNIGHT ENERGY PARTNERS, L.P. (NASDAQ:BKEP) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain OfficersItem 5.02.
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On February 13, 2018, Donald M. Brooks tendered his resignation from the Board of Directors (the “Board”) of Blueknight Energy Partners G.P., L.L.C. (the “General Partner”), the general partner of Blueknight Energy Partners, L.P. (the “Partnership”). This resignation did not result from a disagreement with the General Partner.
Additionally, on February 13, 2018, in its capacity as the sole member of the General Partner and to the Second Amended and Restated Limited Liability Company Agreement of the General Partner, Blueknight GP Holding, LLC appointed Lee Adams, Vice President of Internal Audit at Ergon, Inc., to the Board. Mr. Adams has not been appointed to any committee of the Board.
Mr. Adams is an officer of Ergon and may have conflicts of interest arising from (i) Ergon’s ownership and control of the General Partner of the Partnership and (ii) the following transactions between Ergon, Inc. and its affiliates (collectively referred to as “Ergon”) and the Partnership:
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The Partnership leases facilities to Ergon and provides liquid asphalt terminalling services to Ergon. For the year ended December 31, 2017, the Partnership recognized revenues of $56.4 million for services provided to Ergon, and as of December 31, 2017, the Partnership had receivables from Ergon of $3.1 million. A summary of agreements with Ergon follows: |
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Ergon 2017 Lubbock and Saginaw Storage and Handling Agreement – In September 2016, the Partnership and Ergon entered into a storage, throughput and handling agreement to which the Partnership provides Ergon storage and terminalling services at the Lubbock and Saginaw asphalt terminal facilities. The term of this agreement commenced on January 1, 2017, and continues for six years. During the year ended December 31, 2017, the Partnership generated revenues under this agreement of $12.9 million. |
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Ergon 2016 Storage and Handling Agreement – In October 2016, the Partnership and Ergon entered into a storage, throughput and handling agreement (the “Ergon 2016 Storage and Handling Agreement”) to which the Partnership provides Ergon storage and terminalling services at nine asphalt terminal facilities. The term of the Ergon 2016 Storage and Handling Agreement commenced on October 5, 2016 and continues for seven years. During the year ended December 31, 2017, the Partnership generated revenue under this agreement of $26.4 million. |
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Ergon Fontana and Las Vegas Storage Throughput and Handling agreement – In October 2016, the Partnership and Ergon entered into a storage, throughput and handling agreement (the “Ergon Fontana and Las Vegas Storage Throughput and Handling Agreement”) to which the Partnership provides Ergon storage and terminalling services at two asphalt facilities. The term of the Ergon Fontana and Las Vegas Lease Agreement commenced on October 5, 2016, and is scheduled to expire on December 31, 2018. During the year ended December 31, 2017, the Partnership generated revenues under this agreement of $6.2 million. |
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Ergon Master Facilities Lease and Sublease Agreement – In May 2009, the Partnership and Ergon entered into a facilities lease and sublease agreement (the “Ergon Master Facilities Lease and Sublease Agreement”) to which the Partnership leases Ergon certain facilities. The Ergon Master Facilities Lease and Sublease Agreement has been amended and extended several times and currently encompasses eight facilities and is scheduled to expire on December 31, 2018. The Ergon Master Facilities Lease and Sublease Agreement currently encompasses eight facilities. During the year ended December 31, 2017, the Partnership generated revenues under this agreement of $5.2 million. |
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Ergon Master Facilities Sublease and Sublicense Agreement – In May 2009, the Partnership and Ergon entered into multiple sublease and sublicense agreements covering five facilities. The original terms of these agreements commenced on May 18, 2009, for two years, until December 31, 2011. In November 2010, these multiple leases were consolidated under one master sublease and sublicense agreement. This agreement was amended in June 2015 and has a term scheduled to expire on December 31, 2018. During the year ended December 31, 2017, the Partnership generated revenues under this agreement of $3.7 million. |
About BLUEKNIGHT ENERGY PARTNERS, L.P. (NASDAQ:BKEP)
Blueknight Energy Partners, L.P. is a master limited partnership company. The Company provides integrated terminalling, storage, gathering and transportation services for companies engaged in the production, distribution and marketing of crude oil and liquid asphalt cement. It operates in four segments: asphalt terminalling services, which provides asphalt product and residual fuel terminalling, storage and blending services at its terminalling and storage facilities; crude oil terminalling and storage services, which provides crude oil terminalling and storage services at its terminalling and storage facilities; crude oil pipeline services, which owns and operates pipeline systems, the Mid-Continent system, the East Texas system and Eagle North system, that gather crude oil purchased by its customers and transports it to refiners, and crude oil trucking and producer field services, which uses its owned and leased tanker trucks to gather crude oil for its customers.
