Holly Corporation Announces Sale of Storage Facilities at Tulsa Refinery
October 20 2009 - 4:31PM
PR Newswire (US)
DALLAS, Oct. 20 /PRNewswire-FirstCall/ -- Holly Corporation
("Holly") (NYSE:HOC) and Plains All American Pipeline, LP
("Plains") (NYSE:PAA) announced the sale to Plains of a portion of
Holly's crude oil petroleum storage, and certain refinery-related
crude oil pipeline receiving facilities at Holly's Tulsa refinery,
acquired from Sunoco in June of this year. The purchase price was
$40 million, which was paid in cash. Pursuant to a related
agreement between the parties, Holly will pay Plains a set amount
per month for the exclusive use of the approximate 400,000 barrels
of crude oil tankage Plains acquired as well as a fee for crude oil
received by Holly through the crude oil pipeline receiving
facilities purchased by Plains. Holly will maintain ownership of
the remaining 2.8 million barrels of intermediate and finished
petroleum product tankage that was acquired as part of Holly's
Tulsa refinery acquisition from Sunoco in June 2009. In conjunction
with the transaction, Holly and Plains have also contractually
agreed to explore the use of Holly and Plains Tulsa storage
facilities to capture crude oil contango profit opportunities that
may arise given the facilities close proximity to Cushing,
Oklahoma. Pursuant to a margin sharing agreement, Holly and Plains
would equally share contango profits for crude oil purchased by
Plains and delivered to the Tulsa facility for storage. "We are
extremely pleased with the Plains transaction. Plains, as a large
mid-stream public Master Limited Partnership and one of the largest
crude oil resellers in the country, is not only a more logical
owner of these crude oil storage and pipeline facilities but also
an ideal partner to explore value-creating uses of the extensive
storage at our Tulsa facility," said Matt Clifton, Chairman and CEO
of Holly. About Holly Corporation Holly Corporation, headquartered
in Dallas, Texas, is an independent petroleum refiner and marketer
that produces high value light products such as gasoline, diesel
fuel and jet fuel and high value specialty lubricants. Holly
operates through its subsidiaries a 100,000 barrel per stream day
("BPSD") refinery located in Artesia, New Mexico, an 85,000 BPSD
refinery located in Tulsa, Oklahoma, and a 31,000 BPSD refinery in
Woods Cross, Utah. Also, a subsidiary of Holly owns an approximate
41% interest (which includes a 2% general partner interest) in
Holly Energy Partners, L.P., which through subsidiaries owns or
leases approximately 2,700 miles of petroleum product and crude oil
pipelines in Texas, New Mexico, Utah and Oklahoma and tankage and
refined product terminals in several Southwest and Rocky Mountain
states. The following is a 'safe harbor' statement under the
Private Securities Litigation Reform Act of 1995: The statements in
this press release relating to matters that are not historical
facts are 'forward-looking statements' within the meaning of the
federal securities laws, including, but not limited to, statements
identified by the words "anticipate," "believe," "estimate,"
"expect," "plan," "intend," "will" and "forecast," and similar
expressions and statements regarding our business strategy, plans
and objectives for future operations. These statements are based on
our beliefs and assumptions using currently available information
and expectations as of the date hereof, are not guarantees of
future events or performance and involve certain risks and
uncertainties. Important factors that could cause our actual
results to differ materially from the expectations reflected in our
forward looking statements include the demand for and supply of
crude oil and refined products; the possibility of inefficiencies,
curtailments or shutdowns in refinery operations or pipelines;
effects of governmental regulations and policies; the effectiveness
of our capital investments and marketing strategies; our
efficiencies in carrying out construction projects; our ability to
complete and integrate the acquisition of the Sinclair refinery;
and additional risks contained in our filings made from time to
time with the Securities and Exchange Commission. Although we
believe that the expectations reflected in these forward-looking
statements are reasonable, we cannot assure you that our
expectations will prove correct. Therefore, actual outcomes and
results could materially differ from what is expressed, implied or
forecast in these statements. The forward-looking statements speak
only as of the date made and, other than as required by law, we
undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. DATASOURCE: Holly Corporation CONTACT:
Bruce R. Shaw, Senior Vice President & Chief Financial Officer,
or M. Neale Hickerson, Vice President, Investor Relations, both of
Holly Corporation/Holly Energy Partners, +1-214-871-3555 Web Site:
http://www.hollycorp.com/
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