DALLAS
,
October 10, 2011
(press release)
–
HollyFrontier Corporation (NYSE:HFC - News) and Holly Energy Partners, L.P. (NYSE:HEP - News) 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 HollyFrontier's 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 HollyFrontier's 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 HollyFrontier's 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.
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