BKH » Topics » (24) SUBSEQUENT EVENTS

This excerpt taken from the BKH 10-K filed Mar 16, 2006.

(24)  SUBSEQUENT EVENTS

 

Sale of Crude Oil Marketing and Transportation Assets

 

On January 5, 2006, the Company entered into a definitive agreement to sell the operating assets of its crude oil marketing and transportation business. The sale was completed on March 1, 2006. The Company received approximately $41.0 million of cash proceeds, which will be used for debt reduction or other corporate purposes. As a result of the transaction, the Company expects to record a gain on the sale. For business segment reporting purposes, Black Hills Energy Resources is included in the Energy marketing and transportation segment.

 

Revenues and net assets of the crude oil marketing and transportation business at December 31 are as follows (in thousands):

 

 

2005

2004

2003

 

 

 

 

 

 

 

Revenues

$

778,102

$

636,572

$

652,724

 

 

 

 

 

 

 

Operating income

$

4,084

$

7,583

$

4,416

 

 

2005

2004

 

 

 

 

 

Current assets

$

94,697

$

58,564

Property, plant and equipment

 

25,411

 

24,208

Other non-current assets

 

2,096

 

2,143

Current liabilities

 

(89,750)

 

(51,493)

Other non-current liabilities

 

(3,068)

 

(2,841)

Net assets

$

29,386

$

30,581

 

In conjunction with the sale of the operating assets of BHER, the $60.0 million uncommitted discretionary credit facility was terminated on March 1, 2006.

 

Acquisition

 

On March 6, 2006, the Company entered into a definitive agreement to acquire certain oil and gas assets of Koch Exploration Company, LLC. The assets include approximately 40 Bcfe of proved reserves, which are substantially all natural gas, and associated midstream and gathering assets. The acquisition is subject to further due diligence and is expected to close in the first quarter of 2006.

 

 

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