Elk Petroleum halts sale of Grieve oil pipeline

Elk Petroleum Limited has advised that completion of current negotiations for sale of Elk’s Grieve oil pipeline to the potential pipeline buyer has been suspended while Elk settles a common transportation agreement with the second participant in the Grieve EOR project, Denbury Onshore, LLC.

It is planned to expeditiously pursue completion of this transportation agreement such that completion of the pipeline sale process can occur without delay.

Elk signed a Letter of Intent (LOI) on 22 December 2014 to sell the Grieve oil pipeline. Under the LOI, a pipeline sale agreement was to be settled by 6 February 2015, with completion in March 2015 and after due diligence. A draft pipeline sale agreement has been substantially negotiated and settled, but the potential buyer advised Elk that it seeks the commitment of both participants in the Grieve EOR project, as users of the pipeline, to the terms and conditions for use of the pipeline, including the project operator’s pipeline throughput expectations.

Rather than extend the LOI, the parties have agreed to let it lapse given that the terms for the pipeline sale agreement have now been materially settled, and for Elk to expedite arrangement of transportation agreements by both Elk and the other major producer of oil from the Grieve EOR project.

Elk has already held a number of discussions with the other Grieve EOR project participant about a transportation agreement; such agreements were previously planned to be settled while the potential pipeline buyer completed outstanding due diligence during February and early March. Elk expects that the transportation agreement negotiations can be settled quickly so that the sale of Elk’s pipeline can proceed as planned.

Elk Petroleum Limited is an oil and gas producer and developer with assets located in one of the richest onshore oil regions of the USA: the Rocky Mountains.

Edited from source by Elizabeth Corner

Read the article online at: https://www.worldpipelines.com/business-news/09022015/elk-petroleum-halts-sale-of-grieve-oil-pipeline/