Tesoro Corporation Sells Northern California Terminalling and Storage Assets to Tesoro Logistics
22 November 2016 - 8:10AM
SAN ANTONIO -
November 21, 2016 - Tesoro Corporation (NYSE:TSO) and Tesoro
Logistics LP (NYSE:TLLP) today announced that a subsidiary of
Tesoro has closed the sale of terminalling and storage assets
located in Martinez, California to TLLP. The Northern California
Terminalling and Storage Assets include 5.8 million barrels of
crude oil, feedstock, and refined product storage capacity at
Tesoro's Martinez Refinery along with a marine terminal capable of
handling up to 35,000 bpd of feedstock and refined product
throughput. TLLP acquired the Northern California Terminalling and
Storage Assets for total consideration of $400 million, including
$360 million of cash financed with borrowings on TLLP's revolving
credit facility and $40 million of common and general partner units
to Tesoro. The equity consideration was based on the average daily
closing price of TLLP's common units for the 10 trading days prior
to closing, or $45.53 per unit, with 860,933 units in the form of
common units and 17,570 units in the form of general partner units.
In connection with the acquisition, Tesoro and TLLP entered into
long-term, fee-based storage and throughput and use agreements
which are expected to provide stable cash flows to TLLP.
In addition, TLLP today announced
that it has agreed to acquire crude oil, natural gas and produced
water gathering systems and two natural gas processing facilities
from Whiting Oil and Gas Corporation, GBK Investments, LLC and WBI
Energy Midstream, LLC for total consideration of approximately $700
million. The North Dakota Gathering and Processing Assets include
over 650 miles of crude oil, natural gas, and produced water
gathering pipelines, 170 MMcf per day of natural gas processing
capacity and 18,700 barrels per day of fractionation capacity in
the Sanish and Pronghorn fields of the Williston Basin in North
Dakota.
"These two acquisitions strengthen
TLLP's portfolio of logistics assets that provide full-service
capabilities to both downstream and upstream customers," said Greg
Goff, Chairman and CEO. "TLLP is on target to achieve its 2017 goal
of $820 million in operating income and $1 billion of annual
EBITDA. Further, these assets provide optimization and organic
investment opportunities that support future growth."
Concurrent with these two
transactions, Tesoro has agreed to waive $100 million of general
partner incentive distributions with respect to 2017 and 2018, or
$12.5 million per quarter, to support the balanced growth of the
general and limited partners' interests and maintain strong
financial metrics. The expected annual net earnings and annual
EBITDA contribution for both the Northern California Terminalling
and Storage Assets and the North Dakota Gathering and Processing
Assets are included in Tesoro's previously announced 2017 expected
annual improvements to operating income of $475 to $575
million.
About Tesoro
Corporation
Tesoro Corporation, a Fortune 100 company, is an independent
refiner and marketer of petroleum products. Tesoro, through its
subsidiaries, operates seven refineries in the western United
States with a combined capacity of over 895,000 barrels per day and
ownership in a logistics business, which includes an interest in
Tesoro Logistics LP (NYSE: TLLP) and ownership of its general
partner. Tesoro's retail-marketing system includes over 2,400
retail stations under the ARCO®, Shell®, Exxon®, Mobil®, USA
Gasoline(TM), Rebel(TM) and Tesoro® brands.
This press
release contains certain statements that are "forward-looking"
statements within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934. You
can identify forward-looking statements by the use of words such as
"may," "should," "could," "estimates," "predicts," "potential,"
"continue," "anticipates," "believes," "'plans," "expects,"
"future" and "intends" and similar expressions which are intended
to identify forward-looking statements. These forward-looking
statements include, but are not limited to, statements concerning
anticipated benefits of the transactions; our ability to complete
the acquisition of the North Dakota assets; TLLP's ability to
achieve its 2017 goals for net earnings and EBITDA; and our
expected annual improvements to operating income. For more
information concerning factors that could affect these statements
see our annual report on Form 10-K and quarterly reports on Form
10-Q, filed with the Securities and Exchange Commission (the
"SEC"). We undertake no obligation to publicly release the result
of any revisions to any such forward-looking statements that may be
made to reflect events or circumstances that occur, or which we
become aware of, after the date hereof.
Contact:
Investors:
Sam Ramraj, Vice President, Investor Relations, (210) 626-4757
Media:
Tesoro Media Relations, media@tsocorp.com, (210) 626-7702
TESORO CORPORATION |
|
RECONCILIATION OF AMOUNTS REPORTED UNDER U.S. GAAP
(Unaudited) (in millions) |
|
|
|
|
TLLP 2017 Annual Expected Segment
EBITDA |
Reconciliation of Projected Operating Income to Projected
Annual Segment EBITDA: |
|
Projected
operating income |
$ 820 |
Add:
Depreciation and amortization expenses |
180 |
Projected Annual Segment EBITDA |
$ 1,000 |
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Tesoro Corporation via Globenewswire
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