Exhibit 99.1
Exhibit 99.1
HollyFrontier Corporation and Holly Energy Partners Announce Agreement in Principle for Acquisition of Pipeline and Tankage Assets
10/10/2011
DALLAS, TX HollyFrontier Corporation (NYSE:HFC) and Holly Energy Partners, L.P. (NYSE:HEP) today
announced that their respective Boards of Directors have approved, subject to the execution of
definitive agreements and other customary closing conditions, the acquisition by Holly Energy
Partners, L.P. (Holly Energy) from HollyFrontier Corporation (HollyFrontier) of certain pipeline,
tankage, loading rack and crude receiving assets located at HollyFrontiers El Dorado, Kansas and
Cheyenne, Wyoming refineries for $340 million.
The purchase price of $340 million is expected to be paid in promissory notes with an aggregate
original principal amount of $150 million and approximately 3.8 million Holly Energy common units
valued at $190 million based upon the volume-weighted average price for the 10 trading days which
ended October 7, 2011.
In connection with the closing of the proposed transaction, HollyFrontier and Holly Energy expect
to enter into 15-year throughput agreements containing minimum annual revenue commitments from
HollyFrontier. Holly Energy expects that this acquisition will result in an estimated $47 million
of incremental annual revenue and that the transaction will be accretive to unit holders.
Both HollyFrontier and Holly Energy expect the proposed transaction will close in November, after
the anticipated record date for third quarter 2011 distributions for Holly Energy common units.
These assets being acquired consist of:
|
|
the following assets located at HollyFrontiers El Dorado refinery: |
|
|
|
approximately 3.7 million barrels of hydrocarbon storage tanks; |
|
|
|
|
one refined products truck loading rack and one propane truck loading rack; and |
|
|
|
|
related refined product pipeline connections; |
|
|
the following assets located at HollyFrontiers Cheyenne refinery: |
|
|
|
approximately 1.8 million barrels of hydrocarbon storage tanks; |
|
|
|
|
one refined products truck loading rack, two propane loading spots, and
three crude oil LACTs; and |
|
|
|
|
a crude receiving pipeline. |
About Holly Energy Partners L.P.:
Holly Energy, headquartered in Dallas, Texas, provides petroleum product and crude oil
transportation, tankage and terminal services to the petroleum industry, including HollyFrontier, a
subsidiary of which currently owns a 34% interest (which includes a 2% general partner interest) in
Holly Energy. If the transaction described in this release closes as anticipated, subsidiaries of
HollyFrontier Corporation will own a 44% interest (including a 2% general partner interest) in
Holly Energy. Holly Energy owns and operates petroleum product and crude pipelines, tankage,
terminals and loading facilities located in Texas, New Mexico, Arizona, Oklahoma, Washington, Idaho
and Utah and will, following the anticipated closing of the transactions described in this release,
own similar assets in Kansas and Wyoming. In
addition, Holly Energy owns a 25% interest in SLC Pipeline LLC, a transporter of crude oil in the
Salt Lake City area.
Information about Holly Energy Partners L.P. may be found on its website at
http://www.hollyenergy.com.
About HollyFrontier Corporation
HollyFrontier Corporation, headquartered in Dallas, Texas, is an independent petroleum refiner and
marketer that produces high value light products such as gasoline, diesel fuel, jet fuel and other
specialty products. HollyFrontier Corporation operates through its subsidiaries a 135,000 barrels
per stream day (bpsd) refinery located in El Dorado, Kansas, a 125,000 bpsd refinery in Tulsa,
Oklahoma, a 100,000 bpsd refinery located in Artesia, New Mexico, a 52,000 bpd refinery located in
Cheyenne, Wyoming and a 31,000 bpsd refinery in Woods Cross, Utah. HollyFrontier markets its
refined products principally in the Southwest U.S., the Rocky Mountains extending into the Pacific
Northwest and in other neighboring Plains states. Subsidiaries of HollyFrontier also own a 34%
interest (including the general partner interest) in Holly Energy. If the transaction described in
this release closes as anticipated, subsidiaries of HollyFrontier will own a 44% interest
(including a 2% general partner interest) in Holly Energy.
Information about HollyFrontier Corporation may be found on its website at
http://www.hollyfrontier.com.
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 within the meaning of the federal securities laws. Forward looking
statements use words such as anticipate, project, expect, plan, goal, forecast, will,
intend, could, believe, may, and similar expressions and statements regarding our plans and
objectives for future operations. These statements are based on our beliefs and assumptions and
those of Holly Energys general partner using currently available information and expectations as
of the date hereof, are not guarantees of future performance and involve certain risks and
uncertainties. Although we and Holly Energys general partner believe that such expectations
reflected in such forward-looking statements are reasonable, neither we nor Holly Energys general
partner can give assurance that our expectations will prove to be correct. Such statements are
subject to a variety of risks, uncertainties and assumptions. If one or more of these risks or
uncertainties materialize, or if underlying assumptions prove incorrect, our actual results may
vary materially from those anticipated, estimated, projected or expected. Certain factors could
cause actual results to differ materially from results anticipated in the forward-looking
statements. These factors include, but are not limited to:
|
|
risks and uncertainties with respect to the actual quantities of petroleum products and
crude oil shipped on Holly Energys pipelines and/or terminalled in Holly Energys terminals; |
|
|
the economic viability of HollyFrontier Corporation, Alon USA, Inc. and Holly Energys
other customers; |
|
|
the demand for refined petroleum products in markets HollyFrontier and Holly Energy serve; |
|
|
HollyFrontiers and Holly Energys ability to successfully purchase and integrate
additional operations in the future; |
|
|
HollyFrontiers and Holly Energys ability to complete previously announced or contemplated
acquisitions; |
|
|
the availability and cost of additional debt and equity financing; |
|
|
the possibility of reductions in production or shutdowns at HollyFrontier refineries,
including refineries utilizing Holly Energys pipeline and terminal facilities; |
|
|
the effects of current and future government regulations and policies; |
|
|
HollyFrontiers and Holly Energys operational efficiency in carrying out routine
operations and capital construction projects; |
|
|
the possibility of terrorist attacks and the consequences of any such attacks; |
|
|
general economic conditions; and |
|
|
other financial, operations and legal risks and uncertainties detailed from time to time in
HollyFrontiers and Holly Energys 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.
FOR FURTHER INFORMATION, Contact:
M. Neale Hickerson,
Vice President-Investor Relations,
HollyFrontier Corporation / Holly Energy Partners
214-871-3555