Bridger renegotiating Jamex crude contract

OREANDA-NEWS. June 09, 2016. Ferrellgas Partners subsidiary Bridger Logistics, which provides midstream crude services, is seeking to renegotiate the terms of its take-or-pay contract with producer Jamex as the exploration company struggles to meet payment and volume obligations.

Bridger's transportation system supplies 65,000 b/d of crude to Monroe Energy's 185,000 b/d Trainer, Pennsylvania, refinery, and Jamex is contracted to provide crude to Monroe.

Jamex accounts for 60pc of Bridger's operations, Ferrellgas disclosed in a quarterly filing with the US Securities and Exchange Commission. "There is concern that Jamex may not be able to meet payment obligations through June 2019, the remaining term of the contract," the company stated.

Bridger's earnings bolstered Ferrellgas' overall results in the most recent quarter as the propane retailer suffered narrower margins following lower commodity prices and weaker demand.

Bridger is "continuing to operate with Monroe within contract specifications," Bridger chief executive Julio Rios told analysts on a call this week. The company is working with Jamex to negotiate a solution, but if a similar replacement agreement is not reached, Bridger operations and cash flow will likely be impaired, according to the filing. Ferrellgas Partners expects provide an update in 6-8 weeks.