New book by Larry Connors Click here Improve your trading - See how
Dallas-based Holly Corp. announced Tuesday it has a definitive agreement with Sinclair Oil Corp. to buy its Tulsa refinery for $128.5 million. Holly bought the Sunoco refinery only five months ago.
"It didn't take long when we had the ceremony at the (Sunoco) closing for the Tulsa chamber to suggest we move our headquarters there," Holly CEO Matt Clifton said. "We'll have one of the most competitive refineries in the Midwest with this combination."
Holly's headquarters will stay in Dallas. Once the Sinclair transaction is closed, however, the company could employ more than 600 refinery workers between the two local facilities, although work-force details are still being determined.
Holly plans to operate the two refineries as one, company officials said. Clifton said additional pipeline work will be needed to better connect the two.
"It's a powerful combination," Holly spokesman Neale Hickerson added. "One plus one equals 3."
The deal, subject to regulatory approval, could be completed by the end of the year, he added. The two facilities, once coordinated, would give Holly about 125,000 barrels per day of processing capacity in Tulsa.
What attracted
Holly to the Sinclair facility was its ability to produce ultra low-sulfur diesel and further finish gas oil into gasoline and diesel. Holly had planned to spend $150 million on upgrading the old Sunoco refinery so it could produce ultra low-sulfur diesel by 2011.
"It really eliminates the need to do that $150 million project," Hickerson said. "Our choices were to do nothing and spend $150 million (at Sunoco) or spend $125 million plus a little more to get to the same place and an additional 40,000 barrels."
Tuesday was a busy day for Holly, which also announced it was selling part of its Sunoco storage capacity and pipeline-receiving facilities to Plains All American Pipeline LP for $40 million.
Rumors about an impending Sinclair sale surfaced in recent months after the Salt Lake City-based private refiner shelved completion of a planned $1 billion expansion and upgrade project over several years. Holly's Hickerson pointed out that Sinclair already has spent about $300 million in upgrades.
Sinclair estimated the total value of the deal at $300 million, including inventory purchases.
The seller also expects that Holly will keep most of the 298 workers now employed at the Sinclair refinery.
The company has no plans to exit its marketing business, according to a news release. Sinclair supplies refined petroleum products throughout the Mid-Continent, Upper Midwest and Rocky Mountain regions.
"The long-term off-take agreement Sinclair received in this transaction will enable us to continue marketing refined products to our branded and unbranded wholesale customers," Sinclair spokesman Clint Ensign said in a statement.
Tulsa Metro Chamber CEO Mike Neal thanked Holly for more than doubling its investment in the city.
"Holly Corp.'s acquisition of Tulsa's Sinclair and Sunoco refineries are among the largest economic-development transactions in the nation this year," Neal said in a statement. "Holly Corp. is an aggressive, proactive energy leader, and their presence in Tulsa is already returning huge dividends to the community."
At closing, Holly and Sinclair will enter into a long-term agreement in which Holly provides up to 50,000 barrels per day of gasoline and diesel to Sinclair's marketing network throughout the Midwest.
Subsidiary Holly Energy Partners will purchase 1.4 million barrels of additional storage at the Sinclair facility, as well as asphalt and propane loading racks and a product delivery pipeline.
A tale of two refineries
1910: Texas Co., later Texaco, builds Tulsa refinery along Arkansas river.
1913: Pioneer oilman Josh Cosden builds refinery two miles upriver from Texas Co. plant.
1968: Sunray DX, which later merges and morphs into Sunoco Inc., buys former Cosden refinery.
1983: Sinclair oil Corp. buys Texaco refinery.
2007: Sinclair Tulsa refining Co. announces $1 billion, multiyear expansion to improve daily production and reduce emissions.
Late 2007: Sunoco begins looking for buyer of its Tulsa refinery.
November 2008: Sunoco announces it will not undertake $375 million upgrade that included construction of a new diesel hydrotreater and sulfur recovery unit.
January 2009: Sunoco officials say Tulsa refinery will cease production and be converted into a storage terminal if no buyer is found.
April: Dallas-based Holly Corp. announces plan to buy Sunoco refinery for $65 million and pour another $150 million into environmental upgrades over next two years.
June: Holly takes over operations at Sunoco plant.
July 17: Sinclair spokesman John Goodwin reveals that refinery's planned expansion has been put on hold due to economic factors.
Goodwin discounts rumors that Sinclair is putting facility up for sale.
Tuesday: Holly announces $128.5 million deal to buy Sinclair refinery. The deal also will include purchase of inventory. Holly will not continue with $150 million upgrade plans at the old Sunoco because Sinclair refinery already produces ultra low-sulfur diesel.
Rod Walton 581-8457 rod.walton@tulsaworld.com
To see more of the Tulsa World, or to subscribe to the newspaper, go to http://www.tulsaworld.com. Copyright (c) 2009, Tulsa World, Okla. Distributed by McClatchy-Tribune Information Services. For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.
More News:
Market Updates |
Stock Alerts |
All Trading News |
Stock Index
About TradingMarkets | Contact | Advertise | Careers | Link to Us | Site Map | Help | Terms & Conditions | Privacy Policy | Return Policy | Testimonials | Feedback
The Connors Group, Inc. ("Company") is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. The analysts and employees or affiliates of Company may hold positions in the stocks, currencies or industries discussed here. You understand and acknowledge that there is a very high degree of risk involved in trading securities and/or currencies. The Company, the authors, the publisher, and all affiliates of Company assume no responsibility or liability for your trading and investment results. Factual statements on the Company's website, or in its publications, are made as of the date stated and are subject to change without notice.
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results of any individual trader or trading system published by Company are not indicative of future returns by that trader or system, and are not indicative of future returns which be realized by you. In addition, the indicators, strategies, columns, articles and all other features of Company's products (collectively, the "Information") are provided for informational and educational purposes only and should not be construed as investment advice. Examples presented on Company's website are for educational purposes only. Such set-ups are not solicitations of any order to buy or sell. Accordingly, you should not rely solely on the Information in making any investment. Rather, you should use the Information only as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments. You should always check with your licensed financial advisor and tax advisor to determine the suitability of any investment.
HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING AND MAY NOT BE IMPACTED BY BROKERAGE AND OTHER SLIPPAGE FEES. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.
The Connors Group, Inc.
10 Exchange Place, Suite 1800
Jersey City, NJ 07302
© Copyright 2009 The Connors Group, Inc.
