Vivakor, Inc. has executed a non-binding letter of intent to sell the midstream business and transportation assets of its subsidiary, CPE Gathering MidCon, LLC, to Olenox Industries, Inc. for approximately $36 million. The transaction, which involves Vivakor's Omega pipeline system serving the Oklahoma STACK play, is structured as a combination of cash, a promissory note, and common and preferred stock based on approximately $4.56 million in annual EBITDA under a take-or-pay guarantee.
The proposed divestiture signals a strategic shift for Vivakor as it seeks to strengthen its balance sheet and sharpen its operational focus. Following the sale, the company plans to concentrate resources on its Permian Basin operations, crude oil supply and trading activities, and remediation processing center businesses. This move suggests Vivakor is prioritizing segments where it sees stronger growth potential or competitive advantage, potentially streamlining operations for greater efficiency.
For industry observers, the transaction highlights ongoing consolidation and portfolio optimization within the energy midstream sector. The Omega pipeline system represents an integrated crude oil gathering, transportation, terminaling, and pipeline connection platform, making it an attractive asset for Olenox as it expands its midstream footprint. The parties have targeted execution of a definitive agreement and closing on or before March 31, 2026, subject to customary conditions including due diligence and regulatory approvals.
The financial implications of this transaction extend beyond the immediate $36 million valuation. By converting midstream assets into a combination of cash and securities, Vivakor potentially gains greater liquidity and financial flexibility to invest in its core businesses. The take-or-pay guarantee structure provides revenue predictability for Olenox while ensuring Vivakor receives compensation based on the asset's earning capacity. This type of structured transaction reflects sophisticated deal-making in the current energy market environment.
For business leaders monitoring energy sector trends, this announcement demonstrates how companies are actively managing asset portfolios to optimize returns and strategic positioning. The move from Vivakor suggests a calculated retreat from certain midstream operations to double down on areas where the company believes it can generate superior returns or leverage existing infrastructure more effectively. The extended timeline for closing indicates both parties anticipate a thorough due diligence process and potential regulatory considerations.
Additional information about Vivakor is available through the company's newsroom at https://ibn.fm/VIVK. The full press release detailing this transaction can be accessed at https://ibn.fm/IxMDe. As with all strategic transactions in the energy sector, market participants will be watching closely to see how this asset transfer affects both companies' operational capabilities and financial performance in the coming quarters.
