Giant Industries, Inc Announces Acquisition Of Yorktown, Virginia Refinery From BP

abarrelfullabarrelfull wrote on 07 May 2012 05:32

12 February 2002

Giant Industries, Inc [NYSE: GI] and BP p.l.c. [NYSE: BP] announced today that they have reached an agreement for Giant to acquire BP's Yorktown, Virginia refinery for $127.5 million plus the value of inventory at closing, currently estimated to be $42 million. Additionally, the agreement includes potential payments not to exceed $25 million if certain refining margin levels are met beginning in the year 2003 and concluding at the end of 2005.

All regulatory approval and contingencies are expected to be resolved including a right of first refusal held by adjacent property owner. The transaction is projected to close in the second quarter. The refinery acquisition will be financed with a combination of bank debt and cash on hand.

The refinery is located in Yorktown, Virginia, on the York River and has a crude oil processing capacity of 62,000 barrels per day. The product slate, approximately 50% gasoline, also includes a wide range of products such as diesel fuel, heating oil and coke. The refinery is the only refinery in Virginia and is able to serve the local area, as well as the New York Harbor.

Jim Acridge, Giants Chairman and Chief Executive Officer stated, "I believe we have found a refining operation with as much flexibility as any in the United States. A portion of the market served by the refinery enjoys local distribution benefits similar to those of our current refinery operations. This purchase more than doubles our refining capacity, bringing this total to approaching 100,000 barrels per day. This refinery has the ability to select from a wide range of world crude oils and raw material supplies to produce very high percentages of high value light products at prices that can produce strong netbacks. This refinery is well positioned to do several things: deliver product to many nearby market terminals on short notice to supplement unexpected shortages; to market to a number of markets selected to respond to stronger product margins; and to exchange products to and from the Gulf Coast and New York Harbor."
Acridge continued, "Furthermore, over recent years, the area has enjoyed solid population growth and product demand both in Virginia and the surrounding areas. The refinery personnel and their long-term experience in operating the Yorktown refinery is an ingredient that we are fortunate to inherit and we expect to maintain the workforce currently employed by BP at Yorktown."

"We are delighted that Giant has recognized this refinery is a top performer, and that they plan to offer employment to all of the current workforce. This is an important reassurance to our employees, the markets and the communities served," said Ross Pillari, President of BP America.

The Bank of America served as financial advisor to Giant and Rothschild, Inc., has served as advisor to BP.

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