Oil and natural gas company Murphy Oil Corp. (MUR) Thursday said it has acquired a $92 million, corn-based ethanol plant in North Dakota.
Located in Hankinson, North Dakota, the plant initially began operating in July 2008 before being idled in October 2008. The plant has an annual production capacity of 110 million gallons.
Murphy Oil's president and chief executive officer, David Wood, said, "We are adding this capability to supplement our growing North American fuels business. It also marks our initial entry into the manufacture of bio-fuels. Given the current ethanol mandates and our subsequent blending needs, having more of a presence in the supply chain better balances our business."
Murphy Oil said that it will finance the acquisition through non-recourse debt offered via the sellers.
The company noted that the plant is favorably located near the feedstock supply and has accessible rail service for carrying the finished product. The company expects to start first production shortly.
The El Dorado, Arkansas-based company plans to invest an estimated $15 million in working capital into the facility.
MUR closed Thursday's regular trading session at $55.90, down $1.67 or 2.90%.
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