The stock price of Dakota Plains Holdings Inc., a Wayzata company that loads trains with Bakken crude oil, jumped up Friday and down Monday amid market-driven buying and the company's disclosure that its stock could be delisted.
Shares dropped 46 percent to 89 cents Monday. That followed a run-up from 87 cents to $1.65 per share on Friday — a quadruple witching day when the expiration of index contracts and options can trigger swings in trading volumes and higher prices.
After the market closed Friday, Dakota Plains announced that its stock was in danger of losing its listing on the small-cap exchange of the New York Stock Exchange (NYSE MKT). When trading resumed Monday, the stock price fell back to recent levels.
The company, which operates a crude oil loading terminal in New Town, N.D., declined to comment on the wild price swings.
Its stock has traded as high as $12 per share in 2012, but has been selling at less than $3 per share for more than a year and dipped as low as 64 cents per share in late August.
Crude oil production has flattened in North Dakota, and a smaller share is being shipped to refineries by rail, triggering price competition among loading terminals. Even so, Dakota Plains reported strong second-quarter results — $3 million in earnings before taxes, interest and depreciation — compared with a loss for the three-month period a year ago.
Past losses are a factor in the company's risk of being delisted. Dakota Plains incurred losses in the past four years, which under exchange rules requires stockholders' equity of $4 million or more. Instead, Dakota Plains recently reported a stockholders' deficit of about $3.1 million.
Dakota Plains must submit a compliance plan to the exchange by Oct. 14 and comply in 18 months. The company said it intends to address the issue by revaluing contingent liabilities for future oil volumes to be loaded.
In July, 47 percent of North Dakota's crude oil was loaded onto oil trains, down from 60 percent a year ago, according to the North Dakota Pipeline Authority.
Dakota Plains CEO Craig McKenzie said in August that during 2013 and 2014, oil shippers signed deals "at almost any price." As those contracts expire amid lower oil prices, "costs associated with moving those barrels matter down to the penny," he said. "As a result, we are receiving an increasing number of calls from shippers and producers in our area looking to increase efficiencies any way they can."
In addition to loading oil trains, the terminal unloads rail cars carrying frac sand.
The company, founded in 2010, ships oil to many East Coast refineries. In 2013, it loaded the train headed to a New Brunswick refinery that crashed and burned in Lac-Mégantic, Quebec, killing 47 people. Dakota Plains this year was indemnified by its former partner in the loading operation, World Fuel Services, which contributed $110 million to a victims' compensation fund.