Par Pacific to Acquire U.S. Oil & Refining Co. to Significantly Boost Mainland Refining and Logistics Presence

Source Press Release
Company Par Pacific Holdings, Inc.U.S. Oil & Refining Co. 
Tags Corporate Deals, Deals, Refining & Marketing Activities
Date November 27, 2018

-- $358 million purchase price plus acquired net working capital

-- Connects existing assets in Hawaii, Pacific Northwest and Rockies to create an integrated downstream network with significantly enhanced scale and diversification

-- Geographically and logistically well-positioned to source discounted Western Canadian and Bakken crudes

-- Expected to be immediately accretive to Adjusted Net Income per common share

-- Par Pacific to host conference call and webcast at 9 a.m. ET on November 27, 2018

Par Pacific Holdings, Inc. (NYSE: PARR) ("Par Pacific") today announced that it has signed a definitive agreement to acquire  U.S. Oil & Refining Co. and certain affiliated entities (collectively, "U.S. Oil"), a privately-held downstream business, for $358 million plus net working capital. The acquisition includes a 42,000 bpd refinery, a marine terminal, a unit train-capable rail loading terminal, and 2.9 MMbbls of refined product and crude oil storage. The refinery and associated logistics system are strategically located in Tacoma, WA and currently serve the Pacific Northwest market."

This transformative acquisition connects our existing assets in Hawaii, Pacific Northwest and the Rockies to create an integrated downstream network with significantly enhanced scale and diversification," said William Pate, President and CEO of Par Pacific Holdings. "We have been executing an ambitious strategic growth plan focused on attractive downstream markets for over three years and the acquisition of U.S. Oil further demonstrates the progress we have made. We believe that this transaction provides a strong platform for earnings and cash flow growth."

U.S. Oil's refinery is located on 139 acres of fee-owned land near Tacoma, WA. The 42,000 bpd refinery has the flexibility to optimize its crude slate based on market conditions; currently, discounted Bakken and Cold Lake crude represent over 95% of its current crude slate. U.S. Oil's diverse logistics assets include 2.9 MMbbls of storage capacity, a proprietary 14-mile jet fuel pipeline, a marine terminal with 15 acres of waterfront property, a unit train rail facility with 107 unloading spots and a truck rack with six truck lanes and 10 loading arms. These assets provide connectivity to Bakken, Canadian and Alaskan crude and Pacific, West Coast, Pacific Northwest and Rockies product markets.

Under the terms of the agreement, Par Pacific will purchase 100% of the equity interests of U.S. Oil for total consideration of $358 million plus net working capital. For the twelve months ended September 30, 2018,  U.S. Oil generated Adjusted EBITDA of approximately $86 million. Par Pacific estimates that annual operational and cost synergies of $7.5 million to $12.5 million will result from the transaction.

The transaction is expected to be funded with proceeds from a $225 million secured term loan and $150 million of equity financing. Committed debt financing is being provided by Goldman Sachs, subject to customary terms and closing conditions. Committed equity financing is being provided by U.S. Oil's financial sponsor but the Company may alternatively seek equity financing via the capital markets. The transaction is expected to close in January 2019 and is subject to customary closing conditions.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any offer, solicitation or sale of securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

Conference Call

A conference call to discuss this acquisition is scheduled for Tuesday, November 27, 2018 at 8:00 a.m. Central Time(9:00 a.m. Eastern Time). To access the call, please dial 1-877-404-9648 inside the U.S. or 1-412-902-0030 outside the U.S. and ask for the Par Pacific call. The webcast may be accessed online through the Company's website at  on the Investor Relations page. Please log on at least 10 minutes early to register. A telephone replay will be available through December 4, 2018 and may be accessible by calling 1-877-660-6853 inside the U.S. or 1-201-612-7415 outside the U.S. and using the conference ID 13685344#. Also, an archive of the webcast will be available shortly after the call on the Company's website at   and will be accessible for approximately 90 days.

For more details click here.

Source: EvaluateEnergy® ©2019 EvaluateEnergy Ltd