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Holly to Acquire Sunoco’s Tulsa Coking Ref $65MM

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This topic contains 1 reply, has 1 voice, and was last updated by  Charles Randall 12 years, 2 months ago.

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  • #3128

    basil parmesan
    Participant

    Holly to acquire Sunoco’s Tulsa refinery for $65M
    Holly to acquire Sunoco’s Tulsa refinery and related businesses for $65 million
    Thursday April 16, 2009, 8:21 am EDT .
    DALLAS (AP)Holly Corp., an independent petroleum refiner and marketer, on Thursday said it has agreed to acquired Sunoco Inc.’s 85,000 barrel-per-day Tulsa refinery and associated businesses for $65 million.

    The transaction also includes inventory, which will be valued at market prices at closing, and Sunoco’s specialty lubricant products business.

    “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 percent to 216,000 ( barrels per stream day) while adding the Mid-continent to our existing Rocky Mountain and Southwest markets,” said Mark Clifton, Holly’s chief executive.
    Clifton noted that the company also plans to construct a new diesel desulfurizer at the refinery by the end of 2011.
    “This addition will allow the facility to produce all of its diesel fuel as ultra-low sulfur diesel,” Clifton said. He estimated the project to cost about $150 million.
    The company said it plans to fund this acquisition, the purchase of inventory and related future capital spending with cash on hand, cash generated from operations and from the company’s recently expanded $300 million revolving credit facility.
    Philadelphia-based Sunoco said it has been looking for a buyer for this facility since November 2008, as it seeks to restructure its portfolio of assets. The terms of the deal protect all 400 jobs at the refinery and these workers will become Holly employees, said a Sunoco spokesman.
    This transaction is expected to close on June 1, 2009. Shares of Holly closed at $21.10 on Wednesday. Sunoco shares closed at $27.77.
     
     

  • #6150

    Charles Randall
    Participant

    Here is update on Sunoco’s Tulsa Coking Refinery and its pending sale to Holly for $65MM (includes inventory).
     
    Working quick values put’s this at less than 10% of Tulsa Refinery replacement values (6-8%) which is good value but then Sunoco’s alternate was to become a write-off and a terminal.
     
    The article mentions the HDS unit – but if Holly doesnt go ahead with a heavy crude expansion & coker addition the refinery is likely to operate at bad margins and become a large bone-pile of used equipment.

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