HF Sinclair Corporation Established as a
Leading Integrated Downstream Petroleum and Renewable Fuels
Company
HollyFrontier Corporation (NYSE: HFC) (“HollyFrontier”) and
Holly Energy Partners, L.P. (NYSE: HEP) (“HEP”), today announced
the establishment of HF Sinclair Corporation (NYSE: DINO) (“HF
Sinclair”) as the new parent holding company of HollyFrontier and
HEP and the completion of their respective acquisitions of Sinclair
Oil Corporation and Sinclair Transportation Company from The
Sinclair Companies. Commencing at market open on March 15, 2022, HF
Sinclair will replace HollyFrontier as the public company trading
on the New York Stock Exchange, and will trade under the ticker
symbol “DINO” and under the new CUSIP number 403949 100.
HF Sinclair will be the parent company of a leading integrated
downstream petroleum and renewable fuels company with enhanced
scale and a strong marketing presence featuring:
- An expanded refining business that includes seven
complex refineries across the Mid Continent Southwest, Rocky
Mountain and Pacific Northwest that convert discounted, heavy and
sour crudes into a high percentage of gasoline, diesel and other
high value refined products.
- A growing renewables business with three production
facilities that are expected to produce approximately 380 million
gallons of renewable diesel annually.
- A multi-national lubricants business that produces
specialty products and base oils, marketed under the Petro-Canada
Lubricants, Sonneborn, Red Giant Oil and HollyFrontier Specialty
Products brands.
- A leading marketing business, featuring the Sinclair
brand and comprising 300-plus distributors and more than 1,300
independent wholesale branded sites located across 30 states.
- An expansive logistics business under HEP with an
integrated logistics network connecting key crude and product
regions and interests in strategic joint ventures that provide
access to finished product pipelines and storage.
Across its businesses, HF Sinclair will build on its legacy
companies’ ongoing ESG efforts with increased renewables scale, a
shared commitment to health and safety practices that best serve
employees and communities, and a focus on risk management.
With the addition of Sinclair’s integrated crude and refined
products midstream business, HEP significantly extends the reach of
its network of pipelines and storage facilities, enhancing its
earning power to capture new organic growth opportunities and
expects to increase cash returns to unitholders.
“The completion of our transactions and the launch of HF
Sinclair marks the start of the next phase of our Company’s
history,” said Mike Jennings, Chief Executive Officer of HF
Sinclair and HEP. “We are moving forward as a more diverse,
downward integrated business with scale that is positioned to drive
growth and capital returns to our shareholders. We are also
optimistic about the significantly expanded scale of HEP, which
will benefit from long-term commitments from HF Sinclair. I am
honored to welcome the talented Sinclair team to our organizations
and I look forward to working closely with them to capture the
significant growth and value-creation opportunities ahead at both
HF Sinclair and HEP.”
Integration Details and Business Update
HollyFrontier’s senior management team will continue to operate
HF Sinclair, which is headquartered in Dallas, Texas, with combined
business offices in Salt Lake City, Utah. HEP’s senior management
team will continue to operate HEP under the name Holly Energy
Partners, L.P.
Pursuant to an agreement between HollyFrontier and Sinclair,
Ross Matthews and Norman Szydlowski will be appointed to the HF
Sinclair Board of Directors effective March 15, 2022. Collectively,
the appointees have over 60 years of energy industry experience.
Mr. Matthews served as Chairman and CEO of Sinclair Oil Corporation
from October 2009 until the closing of the transaction. Mr.
Szydlowski previously served as CEO of SemGroup Corporation, Rose
Rock Midstream and Colonial Pipeline Company and as Director of
Sinclair Oil Corporation. Additionally, pursuant to an agreement
between HEP and Sinclair, Mark Peterson will be appointed to the
Holly Logistics Services, L.L.C. Board of Directors. Mr. Peterson
has over 30 years of experience in the midstream sector and served
as Vice President, Transportation for Sinclair Oil Corporation from
January 2010 until the closing of the transaction and Director and
President of Sinclair Transportation Company from August 2009 until
the closing of the transaction.
In connection with the close of the transaction, all existing
shares of HollyFrontier have automatically converted on a
one-for-one basis into shares of common stock of HF Sinclair, and
HF Sinclair has issued approximately 60.2 million shares of common
stock to Sinclair, representing 27% of the pro forma equity of HF
Sinclair with a value of approximately $2.1 billion based on
HollyFrontier’s fully diluted shares of common stock outstanding
and closing stock price on March 11, 2022.
HEP has also issued 21 million common units to Sinclair,
representing 17% of the outstanding common units, and having a
value of approximately $349 million based on HEP’s fully diluted
common units outstanding and closing unit price on March 11,
2022.
Advisors
Citi served as financial advisor to HollyFrontier, and Morgan,
Lewis & Bockius served as HollyFrontier’s legal counsel. Bank
of America Merrill Lynch served as financial advisor to the HEP
Conflicts Committee, Bracewell served as HEP’s legal counsel and
Morris, Nichols, Arsht & Tunnell LLP served as the HEP
Conflicts Committee’s legal counsel. Wachtell, Lipton, Rosen &
Katz served as legal counsel to both HollyFrontier and HEP.
About HF Sinclair Corporation:
HF Sinclair Corporation (“HF Sinclair”), headquartered in
Dallas, Texas, is an independent energy company that produces and
markets high value light products such as gasoline, diesel fuel,
jet fuel, renewable diesel and other specialty products. HF
Sinclair owns and operates refineries located in Kansas, Oklahoma,
New Mexico, Wyoming, Washington and Utah and markets its refined
products in 19 states principally in the Southwest U.S., the Rocky
Mountains extending into the Pacific Northwest and in other
neighboring Plains states. HF Sinclair supplies high-quality fuels
to more than 1,300 Sinclair branded stations and licenses the use
of the Sinclair brand at more than 300 additional locations
throughout the country. In addition, subsidiaries of HF Sinclair
produce and market base oils and other specialized lubricants in
the U.S., Canada and the Netherlands, and export products to more
than 80 countries. Through its subsidiaries, HF Sinclair produces
renewable diesel at two of its facilities in Wyoming. HF Sinclair
also owns a 47% limited partner interest and a non-economic general
partner interest in Holly Energy Partners, L.P., a master limited
partnership that provides petroleum product and crude oil
transportation, terminalling, storage and throughput services to
the petroleum industry, including HF Sinclair subsidiaries.
About Holly Energy Partners, L.P.:
Holly Energy Partners, L.P., headquartered in Dallas, Texas,
provides petroleum product and crude oil transportation,
terminalling, storage and throughput services to the petroleum
industry, including HF Sinclair subsidiaries. HEP, through its
subsidiaries and joint ventures, owns and/or operates petroleum
product and crude gathering pipelines, tankage and terminals in
Texas, New Mexico, Washington, Idaho, Oklahoma, Utah, Nevada,
Wyoming, Kansas and Missouri as well as refinery processing units
in Kansas and Utah.
Forward-Looking Statements
The following is a “safe harbor” statement under the Private
Securities Litigation Reform Act of 1995: The statements in this
press release relating to matters that are not historical facts are
“forward-looking statements” based on management’s beliefs and
assumptions using currently available information and expectations
as of the date hereof, are not guarantees of future performance and
involve certain risks and uncertainties, including those contained
in our filings with the Securities and Exchange Commission.
Forward-looking statements use words such as “anticipate,”
“project,” “will”, “expect,” “plan,” “goal,” “forecast,”
“strategy,” “intend,” “should,” “would,” “could,” “believe,” “may,”
and similar expressions and statements regarding our plans and
objectives for future operations. Although we believe that the
expectations reflected in these forward-looking statements are
reasonable, we cannot assure you that our expectations will prove
correct. Therefore, actual outcomes and results could materially
differ from what is expressed, implied or forecast in such
statements. Any differences could be caused by a number of factors,
including, but not limited to, HF Sinclair’s and HEP’s ability to
successfully integrate the operations of Sinclair with its existing
operations and fully realize the expected synergies of the Sinclair
transactions or on the expected timeline; risks relating to the
value of HF Sinclair common stock and the value of HEP’s limited
partner common units from sales by the Sinclair holders following
the closing of the Sinclair transactions; HF Sinclair’s ability to
successfully integrate the operation of the Puget Sound refinery
with its existing operations; the demand for and supply of crude
oil and refined products, including uncertainty regarding the
effects of the continuing coronavirus (“COVID-19”) pandemic on
future demand and increasing societal expectations that companies
address climate change; risks and uncertainties with respect to the
actions of actual or potential competitive suppliers and
transporters of refined petroleum products or lubricant and
specialty products in HF Sinclair’s markets; the spread between
market prices for refined products and market prices for crude oil;
the possibility of constraints on the transportation of refined
products or lubricant and specialty products; the possibility of
inefficiencies, curtailments or shutdowns in refinery operations or
pipelines, whether due to infection in the workforce or in response
to reductions in demand; the effects of current and/or future
governmental and environmental regulations and policies, including
the effects of current and/or future restrictions on various
commercial and economic activities in response to the COVID-19
pandemic; the availability and cost of financing to HF Sinclair;
the effectiveness of HF Sinclair’s capital investments and
marketing strategies; HF Sinclair’s and HEP’s efficiency in
carrying out and consummating construction projects, including HF
Sinclair’s ability to complete announced capital projects, such as
the construction of the Artesia renewable diesel unit and
pretreatment unit, on time and within capital guidance; HF
Sinclair’s and HEP’s ability to timely obtain or maintain permits,
including those necessary for operations or capital projects; the
ability of HF Sinclair to acquire refined or lubricant product
operations or pipeline and terminal operations on acceptable terms
and to integrate any existing or future acquired operations; the
possibility of terrorist or cyberattacks and the consequences of
any such attacks; uncertainty regarding the effects and duration of
global hostilities and any associated military campaigns which may
disrupt crude oil supplies and markets for our refined products and
create instability in the financial markets that could restrict our
ability to raise capital; general economic conditions, including
uncertainty regarding the timing, pace and extent of an economic
recovery in the United States; a prolonged economic slowdown due to
the COVID-19 pandemic which could result in an impairment of
goodwill and/or long-lived asset impairments; and other financial,
operational and legal risks and uncertainties detailed from time to
time in HF Sinclair’s and HEP’s Securities and Exchange Commission
filings. The forward-looking statements speak only as of the date
made and, other than as required by law, we undertake no obligation
to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or
otherwise.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220313005024/en/
HF Sinclair Corporation and Holly Energy Partners, L.P.
Craig Biery, 214-954-6510 Vice President, Investor Relations or
Trey Schonter, 214-954-6510 Investor Relations
Media Contact media@hollyfrontier.com
HollyFrontier (NYSE:HFC)
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HollyFrontier (NYSE:HFC)
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