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Alon/Paramount buyer FlyJ/Big West Bakersfield coking refinery

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This topic contains 3 replies, has 1 voice, and was last updated by  Charles Randall 11 years, 4 months ago.

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  • #2773

    basil parmesan
    Participant

    Flying J finds buyer for California oil refinery

    By Paul Beebe  The Salt Lake tribune
    Updated: 02/03/2010 05:26:28 PM MST



    Flying J Inc. and its Big West of California subsidiary have agreed to sell their Bakersfield, Calif., oil refinery to Paramount Petroleum Corp., a subsidiary of Alon Energy USA.
    The sale can’t close, however, until an auction approved by a U.S. Bankruptcy Court in Delaware is held in March, and Paramount is certified the high bidder, Flying J spokeswoman Virginia Parker said Wednesday.
    Paramount has agreed to be the “stalking horse” bidder at the action, meaning it has submitted an initial bid acceptable to Flying J.
    California-based Paramount’s bid is $40 million, plus the market value of the refinery’s crude oil inventory. Parker declined to estimate the inventory’s value.
    The sale will close no later than June 1 if Paramount is the successful bidder, Parker said.
    Big West bought the 70,000-barrels-per-day refinery from Shell Oil Co. in March 2005. Flying J put its crude-oil refinery in North Salt Lake up for sale in October.
    Ogden-based Flying J has been selling assets since it filed for bankruptcy in December 2008. The Buckner Co., a Salt Lake City-based insurance brokerage firm, bought Flying J Insurance Services last month.
    The energy company also has sold its bankrupt Longhorn Pipeline subsidiary and has announced plans to merge its Flying J truck stops with rival Pilot Travel Centers.

  • #5702

    Charles Randall
    Participant

    Bakersfield refinery to abandon expansion plan

    Associated Press – March 25, 2010 5:54 PM ET
    BAKERSFIELD, Calif. (AP) – The company expected to take over Bakersfield’s Big West oil refinery says it’s still not clear when the facility will reopen.
    But when it does, Alon USA Energy Inc. said Wednesday it does not plan to go forward with a proposed $700 million expansion – at least not immediately. The facility has been closed for 16 months after its current owner, Flying J, declared bankruptcy in December 2008.
    A bankruptcy court approved the plant’s sale to Alon for $40 million Tuesday.
    Alon USA CEO Jeff Morris told the Bakersfield Californian that Big West will no longer process crude oil. Instead, Alon plans to ship gas oil it produces in Southern California to Big West and turn it into gasoline and diesel for the wholesale market.
    Morris says the roughly 65 employees still working at the site will keep their jobs.

    Information from: The Bakersfield Californian, http://www.bakersfield.com

  • #5581

    Charles Randall
    Participant

    Ogden-based Flying J sells California refinery to Alon
    By James Thalman
    Deseret News  Published: Wednesday, June 2, 2010 7:26 p.m. MDT
    OGDEN – Flying J Inc. has taken another step toward fulfilling its Chapter 11 bankruptcy obligations by selling a refinery in Bakersfield, Calif.
    The deal with Israeli-owned refining and fuel retailing company Alon Energy USA, in the works since July, will allow Flying J to focus on its national network full-service fuel stops, its financial services company and its North Salt Lake refinery.
    Flying J bought the California refinery from Shell Oil Co. in March 2005. In December 2008, Flying J Inc. and its Big West refining and Longhorn Pipeline subsidiaries filed to reorganize under Chapter 11 bankruptcy, indirectly forcing it to stop refining operations in Bakersfield early last year.
    The $40 million purchase price includes basically all assets and existing inventory, according to Alon’s statement announcing the deal Wednesday.
    Details of the purchase outlined out by Alon to the Bakersfield Californian newspaper indicate the plant will refine leftover oil from its Los Angeles County operation into mainly gasoline and diesel, with plans to begin piping in the crude in about a year.
    An expensive, controversial expansion of the refinery that Flying J had planned pre-bankruptcy, intended to increase the plant’s efficiency, will not be pursued, an Alon spokesman told the newspaper, noting that doing so would have meant the refinery would stop buying crude oil from local companies.
    Jeff Morris, a spokesman for Alon, said Wednesday that the Bakersfield plant would extend employment offers to the refinery’s existing work force but that there were no immediate plans to rehire any of the roughly 175 workers let go last year.
    “Our acquisition of Bakersfield will allow us to potentially save up to 100 jobs in the Bakersfield area once the refinery has recommenced full operations,” Morris said.
    The deal is not only attractive, it avoids hundreds of millions of dollars in anticipated new upgrading costs “and will enable us to operate it as an integrated unit with our Paramount refinery, allowing us to significantly increase output at our California refineries,” he said. “Additionally, we were able to accomplish the acquisition of substantially all of the assets of Big West without incurring additional debt to Alon or its subsidiaries.”
    Still pending in Flying J’s reorganization is a merger with Tennessee-based Pilot Travel Centers, a step that is designed to help that part of Flying J’s business move more quickly out of Chapter 11.
    According to court filings, Flying J will receive a stake in Pilot plus $300 million to $500 million in cash. The equity portion of the deal will be based on an enterprise value for Pilot of $3.3 billion and for Flying J of $1.2 billion.
    Pilot has agreed to provide $100 million in “debtor-in-possession” financing for Flying J’s operations, “subject to court approval and various conditions.”
    Flying J, with about 270 travel plazas nationwide, and Pilot with 300 locations, are individually among the largest privately held truck stops in the country.Email: jthalman@desnews.com

  • #5580

    Charles Randall
    Participant

    Here is recent update on Flying J selling (& Buying) assets to get out Chap 11 – it’s now closer to Selling subsidary Big West Bakersfield coking Ref in Calif a 66 MBD Coking Refinery to Paramount Pet (which is a subsidiary of Isareli owned Alon Energy) for $40MM including inventories.
     
    Big West bought the Bakersfield coking refinery from Shell in Mar 2005 (after Shell announced closure in Oct 2004) and then was merged into Fly J which later-on had to file for Chap 11 & reorganization in Dec 2008.
     
    Alon mentions the Bakersfield Refinery expansion with a New 22MBD coking unit at the refinery has been scrapped. It will instead undertake an integration to Alon’s exiting Paramount Refinery.
     
    Also mentioned is $300-500MM cash for Fly J plazas (270) merger with Pilot Travel Centers (300) ~$4.2B value – which should allow Fly J to exit Chap 11. 
     Regards

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