Holly Corporation Announces Definitive Agreement to Acquire Sunoco's Tulsa Refinery
16 Avril 2009 - 12:00PM
PR Newswire (US)
DALLAS, April 16 /PRNewswire-FirstCall/ -- Holly Corporation
(NYSE:HOC) ("Holly") announced today that Holly Refining &
Marketing - Mid-Con, L.L.C. ("HRMM"), a wholly owned subsidiary,
and Sunoco Inc. (R&M) (NYSE:SUN) ("Sunoco") have entered into a
definitive agreement under which HRMM will purchase Sunoco's 85,000
barrel per day (BPD) Tulsa refinery and associated businesses.
Under the terms of the agreement, HRMM will pay Sunoco $65 million
at closing for the refinery. The transaction will also include
inventory which will be valued at market prices at closing. Holly
will also receive as part of the acquisition an assignment of the
Sunoco specialty lubricant product trademarks in North America and
a license to use the same in Central and South America. The
transaction, which is expected to close by June 1, 2009, is subject
to approval by certain regulatory agencies as well as other usual
and customary closing conditions. Matt Clifton, Chairman of the
Board and Chief Executive Officer of Holly, said, "We are extremely
excited about acquiring this complex refinery and its specialty
lubricant products business. In addition to a very attractive
price, the Tulsa acquisition provides Holly with added asset,
geographic, and product diversity. The Tulsa refinery produces an
industry-recognized portfolio of specialty lube oils, process oils
and waxes, as well as transportation fuels. The talented Tulsa
employees and the specialty lubricant products management team who
will be joining Holly have done a great job optimizing the
capabilities of the facility. By leveraging the respected Sunoco
specialty lubricant product trademarks and formulations, the
facility has consistently realized very strong gross margins on
these specialty lubricant products. This strength in specialty
lubricant products, together with an approximate 40 percent yield
of diesel and jet fuel and the bottoms upgrading capabilities of
the plant's coker, has allowed the overall operation to deliver
attractive gross margins and solid financial results. The
facility's proximity to and direct pipeline connection from the
Cushing, Oklahoma crude oil hub combined with its ability to
deliver directly into Burlington Northern's Tulsa railroad yard and
Magellan's pipeline system, allows the facility to competitively
supply transportation fuels to a number of attractive mid-continent
markets. We would like to thank the many public officials in the
state of Oklahoma and the city of Tulsa for their efforts in
supporting this transaction." Clifton added, "Holly plans to
construct a new diesel desulfurizer and associated equipment at the
Tulsa refinery by the end of 2011. This addition will allow the
facility to produce all of its diesel fuel as ultra low sulfur
diesel. We estimate the cost of the project, which will be expended
primarily in 2010 and 2011, to be approximately $150 million. By
replicating similar projects just completed at Holly's two existing
refineries, we are confident that we can execute this project in a
very cost-effective and efficient manner. We view this acquisition
as an attractive addition to Holly's facilities in New Mexico and
Utah, increasing Holly's overall refining capacity by over 60% to
216,000 BPSD while adding the Mid-continent to our existing Rocky
Mountain and Southwest markets. The Tulsa acquisition, at its
attractive purchase price, adds a significant potential income
producing contributor to our profitable and recently upgraded
refineries while maintaining our strong balance sheet. We are
confident that this transaction will create significant value for
Holly shareholders." Holly anticipates that the transaction, the
purchase of inventory and associated future capital spending will
be funded from cash on hand, cash generated from operations and
from the company's recently expanded $300 million revolving credit
facility. Holly has scheduled a conference call for Thursday, April
16, 2009 at 10:00 AM Eastern Time to present additional information
regarding this acquisition. Listeners may access this call by
dialing (888) 548-4639. The ID# for this call is 95758763. For
those who would like to listen to this call via the internet, you
may access the call at
http://www.videonewswire.com/event.asp?id=57925 Holly will also
post a series of presentation slides on its website with additional
detail regarding this transaction. These slides can be accessed
approximately one hour prior to the conference call and webcast,
and can be accessed at http://www.hollycorp.com/. The slides will
be posted on the Investors page, in the Conferences &
Presentations section, which can be accessed by selecting
"Investors" at the top of the home page. Additionally, listeners
may replay this call approximately two hours after the call
concludes by dialing (800) 642-1687. This audio archive will be
available via phone or through the internet until April 30, 2009.
About Holly Corporation Holly Corporation, headquartered in Dallas,
Texas, is an independent petroleum refiner and marketer that
produces high value light products such as gasoline, diesel fuel
and jet fuel. Holly operates through its subsidiaries a 100,000
barrel per day ("bpd") refinery located in Artesia, New Mexico and
a 31,000 bpd refinery in Woods Cross, Utah. Holly also owns a 46%
interest (including the general partner interest) in Holly Energy
Partners, L.P. The following is a "safe harbor" statement under the
Private Securities Litigation Reform Act of 1995: The statements in
this press release relating to matters that are not historical
facts are "forward-looking statements" based on management's
beliefs and assumptions using currently available information and
expectations as of the date hereof, are not guarantees of future
performance and involve certain risks and uncertainties, including
those contained in our filings with the Securities and Exchange
Commission. Although we believe that the expectations reflected in
these forward-looking statements are reasonable, we cannot assure
you that our expectations will prove correct. Therefore, actual
outcomes and results could materially differ from what is
expressed, implied or forecast in such statements. Such differences
could be caused by a number of factors including, but not limited
to, risks and uncertainties with respect to the actions of actual
or potential competitive suppliers of refined petroleum products in
Holly's markets, the demand for and supply of crude oil and refined
products, the spread between market prices for refined products an
market prices for crude oil, the possibility of constraints on the
transportation of refined products, the possibility of
inefficiencies, curtailments or shutdowns in refinery operations or
pipelines, effects of governmental regulations and policies, the
availability and cost of financing to Holly, the effectiveness of
Holly's capital investments and marketing strategies, the ability
of Holly to acquire refined product operations or pipeline and
terminal operations on acceptable terms and to integrate any future
acquired operations, our ability to complete the acquisition of the
Tulsa refinery, our ability to successfully integrate the
operations of the Tulsa refinery into our business, Holly's
efficiency in carry out construction projects, the possibility of
terrorist attacks and the consequences of any such attacks, general
economic conditions, and other financial, operational and legal
risks and uncertainties detailed from time to time in Holly's
Securities and Exchange Commission filings. The forward-looking
statements speak only as of the date made and, other than as
required by law, we undertake no obligation to publicly update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise. DATASOURCE: Holly
Corporation CONTACT: Bruce R. Shaw, Senior Vice President &
CFO, or M. Neale Hickerson, Vice President, Investor Relations,
both of Holly Corporation, +1-214-871-3555 Web Site:
http://www.hollycorp.com/
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