Blueknight Energy Partners, L.P. (“BKEP” or the “Partnership”) (NASDAQ: BKEP) (NASDAQ: BKEPP), a midstream energy company focused on providing integrated services for companies engaged in the production, distribution and marketing of crude oil, asphalt and other petroleum products, today announced adjusted EBITDA of $19.9 million and $48.4 million for the three and nine months ended September 30, 2011, respectively. This represents increases of $3.8 million or 24% and $2.3 million or 5% as compared to the three and nine months ended September 30, 2010, respectively. An explanation of adjusted EBITDA, including a reconciliation of such measure to net income (loss), is provided in the section of this release entitled “Non-GAAP Financial Measures.”
The Partnership reported net income of $28.6 million on total revenues of $46.5 million for the quarter ended September 30, 2011, compared to a net loss of $2.8 million on total revenues of $38.1 million for the quarter ended September 30, 2010. For the nine months ended September 30, 2011, the Partnership reported net income of $25.9 million on total revenues of $131.1 million, compared to a net loss of $10.6 million on total revenues of $113.5 million for the nine months ended September 30, 2010. The Partnership’s financial results for the three and nine months ended September 30, 2011 were impacted by non-cash gains of approximately $23.6 million and $22.1 million, respectively related to the change in estimated fair market value of the embedded derivative related to its outstanding convertible debentures and the rights offering liability. For further information regarding the Partnership’s results of operations, please see the Partnership’s Quarterly Report on Form 10-Q, which was filed today with the Securities and Exchange Commission.
“We had a solid third quarter bolstered by our asphalt business which recognized incremental revenues of $1.9 million due to several customers exceeding annual contractual thresholds and by the recognition of a $1.1 million gain on the sale of excess equipment and assets. Furthermore, demand for our crude oil pipeline and truck transportation services continues to strengthen as evidenced by increased volumes and revenues on our pipelines and truck transportation assets. The construction of one million barrels of crude oil storage in Cushing, Oklahoma for TransMontaigne and the construction of a one million barrel crude oil terminal in Midland, Texas for Vitol are underway and progressing as scheduled. In addition we are pleased with the outcome of our recently completed rights offering which was significantly over-subscribed. With the imminent issuance of the preferred units, we can finally announce that we have successfully completed our recapitalization plan started in October of 2010. We appreciate our unitholders’ efforts and support for the transaction,” said J. Michael Cockrell, Blueknight Energy Partners’ president and chief operating officer.
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