By OGJ editors
HOUSTON, Dec. 20 -- Dallas-based Holly Corp. said Friday it signed a definitive agreement with ConocoPhillips to acquire the major's 25,000 b/d Woods Cross refinery near Salt Lake City and related assets for $25 million.
In addition to the plant, Holly will acquire certain pipelines and transportation assets that support the refinery as well as 25 retail stations in Utah and Wyoming. In addition, Holly inked a 10-year licensewhich could possibly be extended sometime in the futureto market fuels under the Phillips brand name in Utah, Wyoming, Idaho, and Montana.
Holly said Woods Cross has operated at close to its capacity for the last 3 years, during which time the plant and its retail assets have averaged $20 million/year in earnings less interest, taxes, and depreciation.
"The refinery is well maintained, well staffed, and is currently meeting (US Environmental Protection Agency)-mandated cleaner burning gasoline requirements through January 2009," said Matthew P. Clifton, Holly president. Clifton added that the company's capital expenditures to bring the Wood Cross plant into compliance with EPA's June 2006 low-sulfur diesel fuel requirements are "relatively modest" and would "offer potential opportunities for improved profitability."
The deal, which has been approved by both companies, awaits approval by the US Federal Trade Commission and is expected to close Apr. 30, 2003.