SAN ANTONIO,
TEXAS - October 30, 2017 - Andeavor Logistics LP (NYSE: ANDX)
and Andeavor (NYSE: ANDV) today announced that Andeavor Logistics
has completed its acquisition of Western Refining Logistics, LP
(NYSE: WNRL) in a unit-for-unit transaction and assumption of $280
million of net debt for a total enterprise value of approximately
$1.7 billion, based on Andeavor Logistics' closing unit price of
$45.90 on October 30, 2017. The strategic combination of the two
companies further positions Andeavor Logistics as a
growth-oriented, full-service and diversified midstream company
with greater organic growth opportunities across the combined
geographic footprint. As a result of this acquisition, Andeavor
Logistics is well positioned to compete and grow organically in the
highly attractive Permian Basin, principally in the Delaware basin
where Andeavor and Andeavor Logistics have a strong logistics asset
base, crude oil marketing capability and meaningful refining
offtake.
Western Refining Logistics
unitholders will receive the Andeavor Logistics quarterly cash
distribution for the third quarter 2017 after they have exchanged
their WNRL units for Andeavor Logistics units, but will not receive
a separate quarterly cash distribution with respect to WNRL. The
third quarter distribution will be paid November 14, 2017 to all
Andeavor Logistics unitholders of record as of November 3, 2017. As
previously announced on October 18, 2017, the distribution of
$0.9852 per unit represents a 1.5% increase over the previous
quarterly distribution.
Upon the closing of the merger between Andeavor Logistics and WNRL,
Andeavor Logistics also issued 78.0 million of its common units to
Andeavor in exchange for the cancellation of Andeavor Logistics'
incentive distribution rights and the conversion of its economic
general partner interest into a non-economic general partner
interest. Andeavor will continue to own the non-economic general
partner interest in Andeavor Logistics and hold approximately 127
million Andeavor Logistics common units, representing approximately
59% of the common units outstanding. The 78.0 million Andeavor
Logistics common units represent $3.6 billion in value based on
Andeavor Logistics' closing unit price of $45.90 on October 30,
2017. This financial repositioning enhances Andeavor Logistics'
capital structure, reduces the need for new public equity issuance
and substantially reduces the cost of capital to support
sustainable, long-term growth.
"We are excited about the
completion of Andeavor Logistics' acquisition of Western Refining
Logistics and the IDR buy-in. These transactions reduce our cost of
capital, improve our financial strength and position the business
for continued strong growth," said Greg Goff, Chairman and Chief
Executive Officer of Andeavor, and Chief Executive Officer of
Andeavor Logistics' general partner. "These transactions also
strengthen the credit profile of Andeavor Logistics and position it
for an investment grade credit rating as well as create significant
value for Andeavor shareholders and Andeavor Logistics
unitholders."
Andeavor Logistics continues to
expect at least $1 billion of annual growth investments over the
next several years consisting of at least $500 to $600 million in
organic growth and acquisitions and the potential for $400 to $500
million in drop downs from Andeavor. The Company remains committed
to achieving its targeted annual distribution growth of 6% or
greater, distribution coverage ratio of approximately 1.1 times and
debt-to-EBITDA at or below 4.0 times. As previously announced, Greg
Goff will continue to serve as Chairman and Chief Executive
Officer, and Steven Sterin will continue to serve as President and
Chief Financial Officer of the general partner of Andeavor
Logistics.
Andeavor Logistics also announced
a transition in the board of directors of its general partner. Tom
O'Connor gave notice that he will retire from the board of the
general partner effective as of January 1, 2018. To succeed Mr.
O'Connor, and to structure the board to lead the combined
companies, Andeavor Logistics announced that Sigmund L. Cornelius
and Ruth I. Dreessen will join the board effective as of January 1,
2018. This transition will bring the total number of directors on
the board to eight.
"Tom O'Connor has been a strong
leader and partner in our growth at Andeavor Logistics, and we are
grateful for his leadership and valuable service," said Goff. "We
welcome Mr. Cornelius and Ms. Dreessen. Each has substantial skill
and experience that strengthen our board and position it to
successfully guide the combined companies going forward."
Mr. Cornelius is President and
Chief Operating Officer of Freeport LNG, L.P., a Texas-based owner
and operator of a liquefied natural gas receiving and
regasification terminal. Mr. Cornelius retired from ConocoPhillips
in December 2010 after 30 years with the company, having served in
many senior executive positions including most recently as Senior
Vice President, Finance and Chief Financial Officer; Senior Vice
President, Planning, Strategy and Corporate Affairs; President,
Exploration and Production - Lower 48; President, Global Gas; and
President, Lower 48, Latin America and Midstream. Mr. Cornelius
currently serves on the boards of directors of Freeport LNG and
CARBO Ceramics Inc. (NYSE: CRR), and previously served on the
boards of Western Refining, Inc., DCP Midstream GP, LLC, USEC Inc.,
NiSource Inc., Columbia Pipeline Group, Inc. and Parallel Energy
Trust.
Ms. Dreessen is Managing Director
of Lion Chemical Partners, LLC, a private equity firm focused on
the chemical and related industries. She previously served as
Executive Vice President and Chief Financial Officer of TPC Group
Inc., and as Senior Vice President, Chief Financial Officer and
Director of Westlake Chemical Corporation. She spent 21 years at
J.P. Morgan Securities and predecessor companies, ultimately as
Managing Director of chemicals investment banking. Ms. Dreessen
currently serves on the board of directors of Gevo, Inc. (NASDAQ:
GEVO), as Chairperson, and previously served on the boards of Targa
Resources, L.P., Versar, Inc., Georgia Gulf Corporation, Westlake
Chemical Corporation and the Better Minerals & Aggregates
Corporation (U.S. Silica Holding).
About
Andeavor
Andeavor is a premier, highly integrated marketing, logistics and
refining company. Andeavor's retail-marketing system includes more
than 3,100 retail stations marketed under multiple well-known fuel
brands, including ARCO®, SUPERAMERICA®, Shell®, Exxon®, Mobil®,
Tesoro®, USA Gasoline(TM) and Giant®. It also has ownership in
Andeavor Logistics LP and its non-economic general partner.
Andeavor operates 10 refineries with a combined capacity of
approximately 1.2 million barrels per day in the mid-continent and
western United States.
About Andeavor Logistics LP
Andeavor Logistics LP is a leading full-service logistics company
operating primarily in the western and midcontinent regions of the
United States. Andeavor Logistics owns and operates a network of
crude oil, refined products and natural gas pipelines. Andeavor
Logistics also owns and operates crude oil and refined products
truck terminals, marine terminals and dedicated storage facilities.
In addition, Andeavor Logistics owns and operates natural gas
processing and fractionation complexes. Andeavor Logistics is a
fee-based, growth oriented Delaware limited partnership formed by
Andeavor.
Forward Looking
Statements
This communication contains
certain statements that are "forward-looking" statements within the
meaning of Section 27A of the Securities Act and Section 21E of the
Securities Exchange Act of 1934. Words such as "may," "will,"
"could," "anticipate," "estimate," "expect," "predict," "project,"
"future," "potential," "intend," "plan," "assume," "believe,"
"forecast," "look," "build," "focus," "create," "work" "continue"
or the negative of such terms or other variations thereof and words
and terms of similar substance used in connection with any
discussion of future plans, actions, or events identify
forward-looking statements, which involve risks, uncertainties and
assumptions that are difficult to predict. These statements are not
guarantees of future performance and actual outcomes and results
may differ materially from what is expressed or implied in any
forward-looking statement. The factors that might affect Andeavor's
or Andeavor Logistics' performance include, but are not limited to:
the business environment and industry trends; conditions in global
financial markets; domestic and international economic conditions;
Andeavor Logistics' ability to realize the anticipated benefits of
the acquisition of WNRL within the expected time frame; the risk
that problems may arise in successfully integrating the businesses
of the companies, which may result in the combined company not
operating as effectively and efficiently as expected; the risk that
the combined company may be unable to achieve cost-cutting
synergies or it may take longer than expected to achieve those
synergies; the risk that the combined company may not buy back
shares and the risk that any future distribution that Andeavor
Logistics may issue may be different than expected. These factors
are difficult to predict and are beyond Andeavor Logistics' or
Andeavor's control, including those detailed in Andeavor Logistics'
annual reports on Form 10-K, quarterly reports on Form 10-Q,
current reports on Form 8-K, and registration statement on Form S-4
(Reg. No. 333-220088) filed with the SEC on August 22, 2017, as
amended, available on its website at http://andeavorlogistics.com/
and on the SEC's website at http://www.sec.gov, and those detailed
in Andeavor's annual reports on Form 10-K, quarterly reports on
Form 10-Q, current reports on Form 8-K, available on its website at
http://andeavor.com and on the SEC's website at http://www.sec.gov.
Andeavor Logistics' and Andeavor's forward-looking statements are
based on assumptions that Andeavor Logistics and Andeavor believe
to be reasonable but that may not prove to be accurate. Andeavor
Logistics and Andeavor 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, except as required by applicable law or
regulation. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date
hereof.
Contact:
Investors:
Andeavor: Brian Randecker, Investor Relations, (210) 626-4757
Andeavor Logistics LP: Andrew
Woodward, Sr. Director, Finance and Investor Relations, (210)
626-7202
Media:
Andeavor Media Relations, media@andeavor.com, (210) 626-7702
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: Andeavor via Globenewswire
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