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Press Releases
Black Hills Corporation
To Sell Oil Marketing Assets
For Information Contact:
Mark T. Thies, Executive
Vice President; Dale
T. Jahr, Director, Investor Relations
RAPID CITY, SD - January 9, 2006 - Black Hills
Corporation (NYSE: BKH) today announced that on January
5, 2006, the Company entered into a definitive agreement
to sell the operating assets of Black Hills Energy Resources,
Inc. and related subsidiaries to a subsidiary of Sunoco
Logistics Partners L.P. (NYSE: SXL), subject to certain
closing conditions. Black Hills Energy Resources is headquartered
in Houston, TX, and engages in crude oil marketing and pipeline
transportation. Assets include the 200-mile Millennium and
the 190-mile Kilgore Pipelines and other ancillary assets
and businesses. The purchase price was not disclosed and
the transaction is expected to close within 120 days of
last week's agreement.
David R. Emery, President and CEO of Black Hills Corporation,
said, "Over the past several years, our primary energy
marketing activity and competitive advantage increasingly
focused on the natural gas sector. After careful evaluation
of our strengths and strategy, we concluded that divesting
of our oil marketing and transportation assets made sense
and was in the best interest of our shareholders. Cash proceeds
upon completion of the transaction are expected to be used
for debt reduction."
ABOUT BLACK HILLS CORPORATION
Black Hills Corporation is a diversified energy company.
Black Hills Energy, the wholesale energy business unit,
generates electricity, produces natural gas, oil and coal,
and markets energy.
Our retail businesses are Black Hills Power, an electric
utility serving western South Dakota, northeastern Wyoming
and southeastern Montana; and Cheyenne Light, Fuel &
Power, an electric and gas distribution utility serving
the Cheyenne, Wyoming vicinity. More information is available
at our Internet web site: www.blackhillscorp.com.
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This news release includes "forward-looking statements"
as defined by the Securities and Exchange Commission, or
SEC. We make these forward-looking statements in reliance
on the safe harbor protections provided under the Private
Securities Litigation Reform Act of 1995. All statements,
other than statements of historical facts, included in this
release that address activities, events or developments
that we expect, believe or anticipate will or may occur
in the future are forward-looking statements. These forward-looking
statements are based on assumptions which we believe are
reasonable based on current expectations and projections
about future events and industry conditions and trends affecting
our business. However, whether actual results and developments
will conform to our expectations and predictions is subject
to a number of risks and uncertainties that, among other
things, could cause actual results to differ materially
from those contained in the forward-looking statements,
including the risk factors described in Items 1 and 2 of
our 2004 Annual Report on Form 10-K and in Item 2 of Part
I of our quarterly reports on Form 10-Q filed with the SEC,
and the following:
- The amount and timing of capital deployment in new investment
opportunities or for the repurchase of debt or stock;
- The volumes of our production from oil and gas development
properties, which may be dependent upon issuance by federal,
state, and tribal governments, or agencies thereof, of drilling,
environmental and other permits, and the availability of
specialized contractors, work force, and equipment;
- Numerous uncertainties inherent in estimating quantities
of proved oil and gas reserves and actual future production
rates and associated costs;
- The extent of our success in connecting natural gas supplies
to gathering, processing and pipeline systems;
- The possibility that we may be required to take impairment
charges to reduce the carrying value of some of our long-lived
assets when indicators of impairment exist;
- Our ability to successfully integrate CLF&P into our
operations;
- Unfavorable rulings in the periodic applications to recover
costs for fuel and purchased power;
- Changes in business and financial reporting practices
arising from the repeal of the Public Utilities Holding
Company Act of 1935 and other provisions of the recently
enacted Energy Policy Act of 2005.
- Our ability to remedy any deficiencies that may be identified
in the periodic review of our internal controls;
- The timing and extent of changes in energy-related and
commodity prices, interest rates, energy and commodity supply
or volume, the cost of transportation of commodities, and
demand for our services, all of which can affect our earnings,
liquidity position and the underlying value of our assets;
- The timing and extent of scheduled and unscheduled outages
of power generation facilities;
- General economic and political conditions, including tax
rates or policies and inflation rates;
- Our use of derivative financial instruments to hedge commodity,
currency exchange rate and interest rate risks;
- The creditworthiness of counterparties to trading and
other transactions, and defaults on amounts due from counterparties;
- The amount of collateral required to be posted from time
to time in our transactions;
- Changes in or compliance with laws and regulations, particularly
those relating to taxation, safety and protection of the
environment;
- Changes in state laws or regulations that could cause
us to curtail our independent power production;
- Weather and other natural phenomena;
- Industry and market changes, including the impact of
consolidations and changes in competition;
- The effect of accounting policies issued periodically
by accounting standard-setting bodies;
- The cost and effects on our business, including insurance,
resulting from terrorist actions and natural disasters or
responses to such actions and events;
- Capital market conditions, which may affect our ability
to raise capital on favorable terms;
- Price risk due to marketable securities held as investments
in benefit plans;
- Obtaining adequate cost recovery for our retail operations
through regulatory proceedings; and
- Other factors discussed from time to time in our other
filings with the SEC.
New factors that could cause actual results to differ materially
from those described in forward-looking statements emerge
from time to time, and it is not possible for us to predict
all such factors, or the extent to which any such factor
or combination of factors may cause actual results to differ
from those contained in any forward-looking statement. We
assume no obligation to update publicly any such forward-looking
statements, whether as a result of new information, future
events, or otherwise.
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Black Hills Corporation - Investor Relations
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