November 22, 2008 at 7:06 pm #3303
Yorktown refinery on the market
The operation refines about 70,000 gallons of products a day and has changed hands twice in this decade.
By PETER FROST | 247-4744
November 22, 2008
YORK – Western Refining Inc. is actively shopping its Yorktown diesel and gasoline refinery to shore up its balance sheet, the company said this week.
The move to put the refinery on the market comes just more than a year after El Paso, Texas-based Western acquired the Yorktown refinery, Virginas lone refiner of petroleum-based fuels, as part of a $1.3 billion deal to take over its owner, Giant Industries.
Western has hired two New York investment banks to help market the property, the company’s second-largest refinery that produces about 70,000 gallons of gasoline, diesel, jet fuel and other energy sources a day, said Gary Hanson, a company spokesman.
“The plant is running extremely well for us right now, and we think there’s a lot of value there,” he said. “But at the end of the day, we have to make a business decision about what’s best for the company and shareholders.”
Western said in a quarterly earnings filing in late summer that it would explore “strategic alternatives” for the refinery, and it confirmed this week that the property was being actively marketed.
The company’s profits have been in a free fall this year due largely to a spike in oil prices. Wholesale prices for the first three quarters of this year were up 100 percent over 2007’s, according to Western’s third-quarter report. Its 2008 earnings through the third quarter are off more than 70 percent, dropping to $77 million from $264.1 million in the same period a year earlier.
Although the cost of wholesale crude oil has plummeted in recent weeks an indication that profits will improve in the fourth quarter the company still is pursuing the sale of the refinery, Hanson said. He wouldn’t provide a timetable for a potential sale.
“It’s not a fire sale by any means, and no decisions have been made,” he said. “But we have a process laid out to shore up the balance sheet, and there’s some value (in the Yorktown plant) that we felt it was important to evaluate.”
Any change in ownership shouldn’t lead to any job losses locally. Yorktown has about 134 unionized employees, who have a labor contract through 2009, according to the company. The refinery employs about 250 total.
The refinery on 570 acres along the York River serves markets in Hampton Roads, Maryland, New York and the Carolinas. It’s sometimes referred to locally as Amoco, which built the refinery in 1956 and later merged with British Petroleum. It changed hands in 2002, when Giant paid $170 million for it.
Then, in August 2006, Western made a bid for Giant, but the acquisition was delayed by fires at Yorktown that reduced the price of the refinery and a challenge by the Federal Trade Commission on anti-trust concerns. The deal finally closed in May 2007, after a federal judge rebuffed the FTC’s challenge.
November 22, 2008 at 7:07 pm #6442
Here is update on the Western Sale of Yorktown Coking Refinery pretty much same info as in the August 2008 news article other than it is actively seeking a sale & that 2 NY Investment firms have been hired to market the assets.
My comments are about the same Yorktown is important feature on calcined coke landscape & that the sale will go towards the debt Western has from purchase of Giant assets in May 2007. This article adds lot of history comments I made on the Western August news release.
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