Vivakor, Inc. (OTCPINK: VIVK) 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. (NASDAQ: OLOX) for approximately $36 million. The proposed transaction involves Vivakor's Omega pipeline system, an integrated crude oil gathering, transportation, terminaling, and pipeline connection platform serving the Oklahoma STACK play. This strategic divestiture 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 importance of this transaction lies in its potential to significantly reshape Vivakor's operational focus and financial structure. By divesting these midstream assets, Vivakor expects to strengthen its balance sheet and sharpen its strategic focus on its core businesses in the Permian Basin, crude oil supply and trading, and remediation processing centers. This move signals a deliberate corporate strategy to streamline operations and allocate resources toward areas where the company sees greater growth potential and competitive advantage.
For the energy industry, this transaction highlights ongoing portfolio optimization among mid-sized energy companies. The sale of gathering and transportation assets to a specialized operator like Olenox could lead to more efficient management of these infrastructure assets, potentially benefiting producers in the Oklahoma STACK region through improved service reliability. The transaction's structure, incorporating both equity and debt components, reflects sophisticated deal-making in the current energy financing environment where traditional cash transactions may be less feasible.
The parties have targeted execution of a definitive agreement and closing on or before March 31, 2026, subject to customary conditions including due diligence, regulatory approvals, and final negotiation of terms. This extended timeline provides both companies with ample opportunity to conduct thorough assessments and ensure a smooth transition of operations. Investors can monitor developments through the company's official communications channels, including its newsroom at https://ibn.fm/VIVK, where the latest updates relating to VIVK are available.
For readers following energy sector developments, this announcement matters because it demonstrates how companies are repositioning themselves in response to evolving market conditions. Vivakor's shift away from midstream operations toward remediation and Permian Basin activities reflects broader industry trends where environmental services and core production regions are receiving increased investment attention. The transaction's successful completion could set a precedent for similar asset transfers within the sector, potentially influencing valuation metrics for midstream infrastructure assets.
The financial implications are significant, with approximately $36 million in consideration that could provide Vivakor with capital to accelerate development of its remediation processing centers and expand its crude oil supply and trading operations. This capital infusion, combined with reduced exposure to midstream operations, could enhance Vivakor's financial flexibility and potentially improve its ability to pursue strategic opportunities in its remaining business segments. The transaction's EBITDA-based valuation approach provides transparency regarding the assets' earning power and establishes a clear framework for the final purchase price determination.
