The Ute Indian Tribe (Tribe) of the Uintah and Ouray Reservation entered into a memorandum of understanding (MOU) with Calumet Specialty Products Partners, L.P. (NASDAQ: CLMT) (Calumet) to explore potential refining solutions for the Tribe's Black Wax Crude production.
The Uintah and Ouray Reservation is located in North Eastern Utah in Utah's Uinta Basin. The Uintah Basin accounts for the largest percentage of oil production in Utah, with its heavy paraffinic Black Wax Crude. Black Wax Crude is a unique form of crude and is desirable for its low sulfur content and potential for the creation of high value wax and lube products. Current Black Wax Crude production and drilling activities within the basin have been curtailed due to limited takes by Salt Lake City refiners driven by the entry of Canadian crude oil supply into the marketplace.
Calumet has retained Merrill Lynch & Co. as its financial advisor on this strategic alliance. The Tribe has retained the Jurrius Ogle Group LLP to assist it in the transaction.
Maxine Natchees, Chairman of the Ute Tribe, stated: "The Tribe needs to secure a long-term market for its crude resource and after studying all of the options and potential partners, selected Calumet for its specialty refining expertise to jointly develop strategies to increase refining capacity for Utah Black Wax Crude, including the potential development of a green field refinery in North East Utah."
F. William Grube, President and CEO of Calumet stated: "We have been familiar with the Tribe's Black Wax Crude for several years and have experience refining its unique characteristics. We look forward to exploring the potential for a long term, mutually beneficial relationship with the Tribe in a strategic alliance that brings together a Sovereign Nation long in a specialty crude resource with one of the nation's leading specialty petroleum products refiners."
The Uintah and Ouray Reservation (Ute Reservation) is located in Northeastern Utah (Fort Duchesne) approximately 150 miles east of Salt Lake City on US Highway 40. The Ute reservation is located within a three-county area known as the "Uintah Basin". It is the second largest Indian reservation in the United States that covers over 4.5 million acres of original jurisdiction
The Ute's have a tribal membership of 3,157 and over half of its membership live on the Reservation. Tribal members manage their own tribal government and oversee approximately 1.3 million acres of trust land.
Calumet is a leading independent producer of high-quality, specialty hydrocarbon products in North America. Calumet processes crude oil into customized lubricating oils, solvents and waxes used in consumer, industrial and automotive products. Calumet also produces fuel products including gasoline, diesel and jet fuel. Calumet is based in Indianapolis, Indiana and has three refineries located in northwest Louisiana. Additional information on Calumet is available on the Calumet's website at http://www.calumetspecialty.com/.
The MOU contemplates the transportation of Black Wax Crude from Utah to Shreveport, Louisiana in the short term and the construction of refining and processing facilities on the Ute Reservation.
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SOURCE: Calumet Specialty Products Partners, L.P.
CONTACT: Jennifer Straumins, Investor Relations of Calumet Specialty
Products Partners, L.P., +1-317-328-5660
Web site: http://www.calumetspecialty.com/