By STEVE BINDER
INDIANAPOLIS, Ind. — Indiana-based CountryMark certainly is on a roll these days. The farmer-owned cooperative made news earlier this year when the USDA reported it had improved its standing for net income of all ag-related cooperatives from 19th place in 2010 to 17th place in 2011.
The company posted a 39.4 percent increase in net income. Net assets for the company finished the year at $545 million, up 30.7 percent over the previous year’s total of $417 million.
CountryMark made news again when it announced last week it would purchase the oil and natural gas assets of Continental Resources, Inc.’s East Region of the Illinois Basin, a 53,000 square-mile territory covering most of Illinois and Indiana and part of western Kentucky. The basin has been CountryMark’s principal source of crude oil since it began in 1930.
The purchase of Continental, which should be finalized before the end of the year, is set at $125 million. It will increase CountryMark’s share of crude oil produced by 1,100 barrels per day; The co-op now refines about 26,800 barrels of crude oil per day at its Mt. Vernon, Ind., refinery. It is only the fourth farmer-owned refinery in the United States.
Charlie Smith, CountryMark’s president and CEO, praised Continental’s operation.
“For years, Continental has been an excellent operator in the Illinois Basin. This purchase brings to our company established production with upside potential for continued development and exploration,” he said. “Integrating this well-run oil production business into our operation is a great opportunity for our company to secure feedstock for our refinery, while providing a good economic return for our farmer-owners.”
Along with the Oklahoma City-based Continental purchase, CountryMark also will acquire crude oil and natural gas properties from Continental in Michigan, Mississippi and Kansas, bringing CountryMark’s interest to 121,000 acres in six states.
Smith added the company will continue to look for ways to invest more in the Illinois Basin, an area considered to have reserves of at least 80 years remaining, said company spokeswoman Belinda Puetz.
“Deploying advanced technologies in our exploration and production efforts, as well as our refining and logistics endeavors, will be positive for our farmer-owners, the Indiana oil and gas industry, the economic development opportunities of the tri-state area and American energy security,” Smith said.
CountryMark was formed in 1930, and its refinery was opened in 1940. It now operates 110 fueling stations in Indiana and maintains more than 500 miles of pipelines that connect to the Mt. Vernon refinery.
During the past five years, more than $100 million in checks were cut to 138,000 farmers who belong to the member cooperatives that make up CountryMark, Smith said. The CEO credited better operations at the refinery, continued demand for the company’s lubricants and customer service overall for the company’s success in 2011.
Puetz said recently the company, which employs 425 people, is enjoying similar success for 2012 and that net income numbers for the year likely will be similar to those in 2011.