SAN ANTONIO, June 17, 2014 /PRNewswire/ -- Valero Energy
Partners LP (NYSE: VLP, the Partnership), today announced that it
has approved the acquisition from certain subsidiaries of Valero
Energy Corporation (NYSE: VLO, Valero) of the McKee Crude System,
Three Rivers Crude System, and Wynnewood Products System for total
consideration of $154 million.
The drop-down transaction is expected to close on
July 1, 2014 and to be funded with
the Partnership's cash on hand.
"This acquisition is our first step in executing our growth
strategy and is consistent with previously communicated growth
plans," said Joe Gorder, Chairman
and Chief Executive Officer.
The assets to be acquired include:
- The McKee Crude System, located in Sunray, Texas, which has 72,000 barrels per
day of throughput capacity and supplies approximately 40 percent of
the crude oil processed at Valero's McKee refinery. The system
consists of more than 200 miles of pipelines, 20 crude oil truck
unloading sites with lease automatic custody transfer units, and
approximately 240,000 barrels of storage capacity.
- The Three Rivers Crude System, located in the Eagle Ford shale
region in South Texas, consisting
of 11 crude oil truck unloading sites with lease automatic custody
transfer units and a 1-mile, 12-inch pipeline with a capacity of
110,000 barrels per day that delivers crude oil to tanks at
Valero's Three Rivers refinery.
The system also receives locally produced crude oil via connections
to the Harvest Arrowhead pipeline system and the Plains Gardendale
pipeline for processing at the Three
Rivers refinery or for shipment through third-party
pipelines to Valero's two refineries in Corpus Christi, Texas.
- The Wynnewood Products System, located in Ardmore, Oklahoma, consisting of a 30-mile,
12-inch refined petroleum products pipeline with 90,000 barrels per
day of capacity and two tanks with a total of 180,000 barrels of
storage capacity. The system connects Valero's Ardmore refinery to the Magellan refined
products pipeline system and is the primary distribution outlet for
the refinery.
Upon closing, the Partnership plans to enter into 10-year term
transportation and terminaling agreements with subsidiaries of
Valero. These agreements are expected to contain minimum
throughput volume commitments that account for approximately 90
percent of expected throughput volumes. The to-be acquired
assets are expected to contribute approximately $15.4 million of EBITDA in their first full year
of operation.
The terms of the transaction were approved, subject to the
execution of definitive documentation, by the Board of Directors of
the general partner of the Partnership, following the approval and
recommendation of its conflicts committee, which is composed of
independent directors and was advised by Simmons & Company
International, its financial advisor, and Akin Gump Straus Hauer
& Feld LLP, its legal counsel. For more information about the
assets involved in this transaction, visit
www.valeroenergypartners.com.
About Valero Energy Partners LP
Valero Energy Partners
LP is a fee-based, growth-oriented, traditional master limited
partnership formed by Valero Energy Corporation to own, operate,
develop, and acquire crude oil and refined petroleum products
pipelines, terminals, and other transportation and logistics
assets. With headquarters in San
Antonio, the Partnership's assets include crude oil and
refined petroleum products pipeline and terminal systems in the
Gulf Coast and Mid-Continent regions of the United States that are integral to the
operations of several of Valero's refineries.
Contacts
Investors:
John Locke, Executive Director –
Investor Relations, 210-345-3077
Karen Ngo, Manager – Investor
Relations, 210-345-4574
Media:
Bill Day, Vice President –
Communications, 210-345-2928
Logo -
http://photos.prnewswire.com/prnh/20131202/DA25769LOGO
Safe-Harbor Statement
This release contains
forward-looking statements within the meaning of federal securities
laws. These statements discuss future expectations, contain
projections of results of operations or of financial condition or
state other forward-looking information. You can identify
forward-looking statements by words such as "anticipate,"
"believe," "estimate," "expect," "forecast," "project," "could,"
"may," "should," "would," "will" or other similar expressions that
convey the uncertainty of future events or outcomes. These
forward-looking statements are not guarantees of future performance
and are subject to risks, uncertainties and other factors, some of
which are beyond the Partnership's control and are difficult to
predict. These statements are often based upon various assumptions,
many of which are based, in turn, upon further assumptions,
including examination of historical operating trends made by the
management of the Partnership. Although the Partnership believes
that these assumptions were reasonable when made, because
assumptions are inherently subject to significant uncertainties and
contingencies, which are difficult or impossible to predict and are
beyond its control, the Partnership cannot give assurance that it
will achieve or accomplish these expectations, beliefs or
intentions. When considering these forward-looking statements, you
should keep in mind the risk factors and other cautionary
statements contained in the Partnership's filings with the U.S.
Securities and Exchange Commission, including the Form S-1 and
prospectus relating to the initial public offering of the
Partnership's common units and the Partnership's annual report on
Form 10-K for the year ended December 31,
2013. These risks could cause the Partnership's actual
results to differ materially from those contained in any
forward-looking statement.
Use of Non-GAAP Financial Information: We define EBITDA
as net income before income tax expense, interest expense, and
depreciation expense. EBITDA is a supplemental financial measure
that is not defined under U.S. generally accepted accounting
principles (GAAP). We believe that the presentation of EBITDA
provides useful information to investors in assessing our financial
condition and results of operations. The GAAP measure most directly
comparable to EBITDA is net income. EBITDA should not be considered
an alternative to net income in accordance with GAAP. EBITDA has
important limitations as an analytical tool because it excludes
some, but not all, items that affect net income. EBITDA should not
be considered in isolation or as a substitute for analysis of our
results as reported under GAAP. Additionally, because EBITDA may be
defined differently by other companies in our industry, our
definition of EBITDA may not be comparable to similarly titled
measures of other companies, thereby diminishing its utility.
VALERO ENERGY
PARTNERS LP
RECONCILIATION OF
FORECASTED NET INCOME UNDER U.S. GAAP
TO EBITDA
(Unaudited, in
millions)
|
|
|
|
Full Year
Beginning
July 1,
2014
McKee Crude
System,
Three Rivers Crude
System,
and Wynnewood Products
System
|
|
|
Forecasted net
income
|
$12.0
|
Add:
Forecasted depreciation expense
|
3.4
|
Forecasted
EBITDA
|
$15.4
|
SOURCE Valero Energy Partners LP