Indianapolis-based CountryMark, a co-op that provides fuel to farmers, has acquired 600 oil wells and other assets in the
Illinois basin in a strategy to vertically integrate its operations.
CountryMark bought the wells and rights to explore other areas of the basin from Evansville-based Core Minerals Operating
Co Inc. CountryMark CEO Charlie Smith would not disclose the purchase price, but he did say he expects the purchase to add
as much as $15 million in profit to CountyMark’s operations next year.
CountryMark has annual revenue of about $1 billion per year from refining, transporting and selling more than 9 million barrels
of oil products annually.
“Combining the advantages of the resources available within the Illinois Basin with the technological and commercial
infrastructure and expertise of CountryMark makes for a strong, integrated business model that I believe will yield positive
returns for all CountryMark stakeholders,” Smith said in a prepared statement.
CountryMark will hire 50 employees—most of Core Minerals’ staff—as part of the deal. Core Minerals was
managed by Houston-based private equity firm EnCap Investments L.P.
CountryMark already employs 350 workers, mostly at its Mount Vernon refinery. The company has about 20 workers at its Indianapolis
headquarters at 225 S. East St.
CountryMark tried to get into oil exploration and drilling in 2008 but has so far been a financial partner with other firms.
Exploration in the Illinois basin picked up in recent years as the price of oil made it profitable again for exploration while
advances in technology made it less expensive to re-investigate untapped areas for the existence of oil pockets.
Smith’s strategy is to use seismic technology to search for oil deposits that might have been missed by previous companies
exploring the 90,000 acres it now has rights to in Illinois, Indiana and Kentucky. He also hopes to use horizontal drilling
in oil fields that are played out to find “missed pockets” of oil. Thirdly, Smith thinks CountryMark can apply
methods to wring every last drop of oil out of the wells it just acquired.
“We’ve gone from a minor footprint to a major footprint,” Smith said. “Now, we’re a full-blown
CountryMark’s wells are now producing 950 barrels of crude oil per day. Overall, the Illinois basin produces 35,000
barrels of crude oil per day.