It is now my pleasure to introduce Neil Koehler, President and CEO. Neil?
Neil M. Koehler
Thanks, Becky, and thank you all for joining us today to discuss our quarterly results. During the second quarter, we made significant progress in our efforts to position Pacific Ethanol as an industry leader in the production and marketing of ethanol and its co-products. We achieved several of the 2012 strategic objectives we laid out at the beginning of the year.
First, on July 3, we completed a public equity offering for $11.3 million in net proceeds to finance the purchase of additional ownership interest in the Pacific Ethanol plants and provide additional working capital. Then on July 13, we increased our ownership in the plants by 33% at attractive valuations compared to a placement cost and market valuations and at a discount to our last purchase price.
Now our combined 67% ownership in the plants provides us with more control over the strategic direction of the plants. We believe the long-term outlook for ethanol fundamentally supports our consolidation of plant ownership.
Also, on July 13, we amended the credit agreement at the plant level. The amendment gives us more favorable terms on a portion of our plant debt and provides additional liquidity for plant operations. Looking ahead, we are evaluating additional opportunities to improve the terms of the remaining plant debt.
As announced in early June, we further diversified our revenue stream in our production business. We contracted for the implementation of corn oil separation at our Magic Valley plant. Corn oil is a high-value co-product. The Magic Valley plant is expected to produce approximately 12 million pounds of corn oil per year, which at current prices would contribute as much as $4.5 million or $0.07 per gallon of operating income annually.
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