Vivakor (NASDAQ:VIVK) on Wednesday announced the sale of the non-core business units of Meridian Equipment Leasing, LLC, and Equipment Transport, LLC, subsidiaries of Vivakor Transportation, LLC, an indirect wholly-owned subsidiary of the company.
Vivakor Chair and CEO James H. Ballengee said that the net consideration of approximately $11 million and the elimination of approximately $59 million in debt significantly improved the company’s credit metrics and strengthened its capital structure.
The transaction results in a modest increase in net equity due to the transfer of associated assets, reduces its overall risk profile, and positions it to better focus on core, high-growth opportunities, with minimal impact on EBITDA, he noted.
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Through this transaction, Vivakor exits the produced water transportation sector and expects to realize meaningful annualized interest expense savings.
The sale enables the company to streamline operations and focus capital and management attention on higher-margin business segments.
Ballengee said that strategically, Vivakor refocused its efforts on expanding crude oil transportation, midstream infrastructure, and environmental remediation services, particularly those centered on reuse technologies.
He added that this divestiture supports its ongoing objective to raise cash, reduce expenses, and accelerate the transition toward a more streamlined, capital-efficient business model.
Meridian Equipment Leasing, LLC, and Equipment Transport, LLC collectively owned and operated a fleet of trucks and trailers dedicated to transporting oilfield-produced water, primarily serving producers in the Permian and Eagle Ford Basins.
In June, Vivakor said it is focusing its growth strategy on the Permian and Eagle Ford Basins, aiming to expand its integrated crude oil storage, logistics, and marketing operations.
The company owns and operates 10 pipeline injection stations in key areas of the Permian Basin across Texas and New Mexico.
These facilities collect crude oil delivered by truck from production wells and transfer it into major interstate pipelines, including Centurion (Lotus), Plains Basin Pipeline (PAA), and the West Texas System (EPD).
Price Action: VIVK stock is up by 14.01% at $1.30 premarket at last check on Wednesday.
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