Murphy Oil Acquires Ethanol Plant
Wednesday October 7, 2009, 1:59 pm EDT
Murphy Oil Corporation announced the acquisition of a corn-based ethanol plant in Hankinson, North Dakota, on Oct 1, 2009, through its subsidiary. The purchase price was $92 million, which will be financed through non-recourse debt offered via the sellers. The company plans to invest approximately $15 million in working capital into the facility.
The acquired plant had started production in July 2008 and has remained idle since October 2008. The annual capacity of the plant is 110 million gallons.
The acquisition marks Murphy’s first venture into the manufacture of bio-fuels and is expected to supplement the company’s growing North American fuels business. Given the current ethanol mandates and the company’s subsequent blending needs, a comprehensive presence in the supply chain better balances the company’s business. Production at the plant, which is located near feedstock supply and rail service for carrying the finished product, is expected to start shortly.
Based in El Dorado, Arkansas, Murphy Oil Corporation is a major integrated oil and gas company with upstream operations in the US, Canada, the UK, Malaysia and Ecuador. Murphy engages in exploration, production, refining and marketing of oil and gas worldwide.
Source: Zacks Equity Research
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