Genesis Energy, L.P. Exits Non-Core Legacy CO2 Pipeline Business and Accelerates Its Repayment of Debt
Genesis Energy, L.P. (GEL) has finalized agreements with Denbury Inc. to sell its Free State CO2 pipeline for $22.5 million, plus an additional $70 million in quarterly payments related to the NEJD financing lease. This transaction is expected to yield approximately $134 million in total cash, aimed at reducing the partnership's debt. CEO Grant Sims emphasized that this move will help Genesis exit the non-core CO2 pipeline sector and strengthen its financial position amid the challenges posed by the COVID-19 pandemic and recent hurricanes.
- Completion of the Free State CO2 pipeline sale expected to generate approximately $134 million in cash.
- Proceeds will be used to reduce outstanding indebtedness, improving the company's financial health.
- Exit from non-core business expected to streamline operations.
- None.
HOUSTON--(BUSINESS WIRE)--Genesis Energy, L.P. (NYSE: GEL) announced today that it has executed agreements with a subsidiary of Denbury Inc. (“Denbury”) to sell
As previously disclosed, we received approximately
Grant Sims, CEO of Genesis Energy, said, “This transaction will allow Genesis to exit our non-core CO2 pipeline business that would have otherwise materially ended in 2026. We will use all proceeds to pay down amounts outstanding under our senior secured credit facility or opportunistically repurchase certain unsecured notes in the open market. All of the proceeds from these transactions will be recognized as Adjusted Consolidated EBITDA under our senior secured credit facility and will provide us additional cushion under our covenants as we effectively manage through the near-term effects of the COVID-19 pandemic and the disruptions experienced from one of the most active hurricane seasons on record.”
Genesis Energy, L.P. is a diversified midstream energy master limited partnership headquartered in Houston, Texas. Genesis’ operations include offshore pipeline transportation, sodium minerals and sulfur services, marine transportation and onshore facilities and transportation. Genesis’ operations are primarily located in the Gulf Coast region of the United States, Wyoming and the Gulf of Mexico.
This operations and commercial update includes forward-looking statements as defined under federal law. Although we believe that our expectations are based upon reasonable assumptions, we can give no assurance that our goals will be achieved. Actual results may vary materially. All statements, other than statements of historical facts, included in this operations and commercial update that address activities, events or developments that we expect, believe or anticipate will or may occur in the future, including but not limited to statements relating to future financial and operating results, the impact of Hurricane Laura and the associated timing and costs, the COVID-19 pandemic, and our strategy and plans, are forward-looking statements, and historical performance is not necessarily indicative of future performance. Those forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of uncertainties, factors and risks, many of which are outside our control, that could cause results to differ materially from those expected by management. Such risks and uncertainties include, but are not limited to, weather, political, economic and market conditions, including a decline in the price and market demand for products, the outbreak or continued spread of disease, and other uncertainties that are described more fully in our Annual Report on Form 10-K for the year ended December 31, 2019 filed with the Securities and Exchange Commission and other filings, including our Current Reports on Form 8-K and Quarterly Reports on Form 10-Q. We undertake no obligation to publicly update or revise any forward-looking statement.
