Intrepid Completes Purchase of Dinwiddie Jal Ranch
May 02 2019 - 4:31PM
DENVER; May 2, 2019 -
Intrepid Potash, Inc. (NYSE:IPI) ("Intrepid") today announced it
completed its acquisition of the Dinwiddie Jal Ranch and related
water rights (collectively, the "Dinwiddie Assets") from the
Dinwiddie Cattle Company, LLC.
Intrepid arranged to purchase 100% of the
Dinwiddie Assets and will operate the assets as "Intrepid
South."
"The acquisition of the Dinwiddie Assets in the
Northern Delaware Basin continues our strategy to develop a more
complete water midstream infrastructure system and to provide
additional water supply for our current water partners in
southeastern New Mexico," said Bob Jornayvaz, Intrepid's Executive
Chairman of the Board, President and CEO. "This property has been
in the Dinwiddie family for over a century, and we see significant
opportunities to enhance and modernize these assets by implementing
new technology and best practices from our oilfield solutions
segment to increase the profitability of the assets over time. The
addition of approximately 60,000 acres of owned and leased land in
one of the most productive oil and gas basins in the world is
designed to enable us to provide water midstream services over an
expanding footprint that already covers a significant portion of
Eddy and Lea Counties. The Dinwiddie Assets build upon our revenue
diversification strategy and complement our growing oilfield
solutions segment."
-
Intrepid negotiated a reduction in the amount
due at closing to $53 million, of which $3.25 million was placed as
a deposit in February 2019. Intrepid has agreed to pay up to an
additional $12 million pending the resolution of certain issues
identified during the diligence process. The seller has also
reserved a 20-year, 10% royalty, proportionally reduced as to
Intrepid's interest, on certain produced water disposal revenue
relating to the property and certain other properties located near
the property. After the acquisition and with the remaining
availability under its credit facility and expected cash generated
from operations, Intrepid believes it has sufficient liquidity to
pursue additional opportunities across its business segments and
continue to meet its debt obligations.
-
Dinwiddie Assets generated approximately $13
million of revenue in 2018, primarily from water sales.
-
Dinwiddie Assets offer opportunities to create
new and diverse revenue streams, including potential for:
-
revamping and upgrading the marketing and
distribution network for water, including an opportunity to jointly
market water with adjacent landowners
-
participating in the development of a produced
water gathering and disposal system
-
permitting caliche for sale, which is widely
used in oil and gas operations in the Permian Basin as a preferred
construction material
-
Intrepid expects to spend up to $5 million in
2019 in opportunity capital related to the Dinwiddie
Assets
-
Acquisition covers a diverse set of assets with
expansion opportunities:
-
Approximately 60,000 acres of owned and leased
land in the Northern Delaware Basin
-
5.8 million barrels per year of permitted water
rights with the opportunity to add approximately 13 million
additional barrels progressively over the next two years
-
Improve the management of surface and road-use
agreements with oil and gas operators that are generating solid
cash flow
-
Royalty interest in an operating produced water
disposal system that is generating a consistent cash flow
stream
-
Oil and gas activity is robust around the
property:
-
Over 600 permits for new horizontal oil and gas
wells on or near the property
-
Eddy and Lea Counties have over 500
drilled-but-uncompleted wells, approximately 100 drilling rigs, and
over 4,200 approved permits as of April 2019
About Intrepid
Intrepid is a diversified mineral company that
delivers potassium, magnesium, sulfur, salt, and water products
essential for customer success in agriculture, animal feed and the
oil and gas industry. Intrepid is the only U.S. producer of muriate
of potash, which is applied as an essential nutrient for healthy
crop development, utilized in several industrial applications and
used as an ingredient in animal feed. In addition, Intrepid
produces a specialty fertilizer, Trio®, which
delivers three key nutrients, potassium, magnesium, and sulfate, in
a single particle. Intrepid also provides water, magnesium
chloride, brine, and various oilfield services.
Intrepid serves diverse customers in markets where
a logistical advantage exists and is a leader in the use of solar
evaporation for potash production, resulting in lower cost and more
environmentally friendly production. Intrepid's mineral production
comes from three solar solution potash facilities and one
conventional underground Trio® mine.
Intrepid routinely posts important information,
including information about upcoming investor presentations and
press releases, on its website under the Investor Relations tab.
Investors and other interested parties are encouraged to enroll at
intrepidpotash.com, to receive automatic email alerts or RSS feeds
for new postings.
Forward-Looking
Statements
This press release includes certain statements
concerning expectations for the future that are forward-looking
within the meaning of the federal securities laws. Forward-looking
statements contain known and unknown risks and uncertainties (many
of which are difficult to predict and beyond management's control)
that may cause Intrepid's actual results in future periods to
differ materially from anticipated or projected results. Examples
of forward-looking statements in this press release include, but
are not limited to, the expected profitability of the Dinwiddie
Assets, Intrepid's ability to successfully manage the Dinwiddie
Assets, the acquisition of additional assets upon satisfaction of
certain conditions, the opportunity to add 13 million barrels of
additional water rights and related timing and expected oil and gas
drilling activity in the area around the Dinwiddie Assets. An
extensive list of specific material risks and uncertainties
affecting Intrepid is contained in its Annual Report on Form 10-K
for the year ended December 31, 2018, and other quarterly and
current reports filed with the Securities and Exchange Commission
from time to time. Any forward-looking statements in this press
release are made as of the date of this press release, and Intrepid
undertakes no obligation to update or revise any forward-looking
statements to reflect new information or events.
Contact
Matt Preston, Investor Relations
Phone: 303-996-3048
Email: matt.preston@intrepidpotash.com
This
announcement is distributed by West Corporation on behalf of West
Corporation clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Intrepid Potash Inc via Globenewswire
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