Western Refining Announces Sale of Assets for $220 Million

abarrelfullabarrelfull wrote on 01 Dec 2011 17:26
Tags: all-plains deals refinery usa western-refining

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Western Refining, Inc. (NYSE:WNR) today announced that it has entered into agreements with Plains Marketing, L.P. and Plains Pipeline, L.P., both subsidiaries of Plains All American Pipeline, L.P., for the divestiture of its Yorktown, Virginia facilities and an underutilized segment of its crude oil pipeline in southeast New Mexico for $220 million.

The companies executed asset purchase agreements under which Western will sell substantially all of its Yorktown assets, including both the terminal and idled refinery, in addition to an 82 mile segment of a 424 mile crude oil pipeline in New Mexico to Plains. Western will retain its East Coast wholesale business and continue to market products in the Mid-Atlantic region. The sale of the Yorktown assets and the New Mexico pipeline segment are contingent upon concurrent closings, both of which are subject to regulatory approvals and other customary conditions. The transactions are expected to close in the fourth quarter of 2011. Western expects to record a non-cash loss on disposition of these assets of $440 to $460 million in the fourth quarter.

Jeff Stevens, Western's President and Chief Executive Officer, commented, "We are very pleased with these transactions as they allow Western to monetize the Yorktown assets and exit the volatile East Coast refining market. Continued extreme volatility of refining economics on the East Coast has significantly reduced the probability of restarting refining operations at Yorktown. This transaction precludes such a restart but allows us to maximize the value of the terminal assets. Additionally, these actions enable us to continue to focus on strengthening our balance sheet by further reducing our debt."

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