HollyFrontier Acquiring Puget Sound Refinery from Shell

HollyFrontier Corporation recently announced that it has entered into a definitive agreement to acquire the Puget Sound Refinery, the on-site cogeneration facility and related logistics assets, from Equilon Enterprises LLC d/b/a Shell Oil Products US (“Shell”) for a purchase price of $350 million, plus hydrocarbon inventory to be valued at closing with an estimated current value in the range of $150-180 million. HollyFrontier expects to fund the acquisition with a one-year suspension of its regular quarterly dividend and cash on hand and expects the transaction to be immediately accretive to HollyFrontier’s earnings per share and free cash flow. HollyFrontier expects the transaction to close in the fourth quarter 2021, subject to regulatory clearance and other customary closing conditions. The HollyFrontier Board of Directors approved the one-year suspension of the regular quarterly dividend effective with the dividend to be declared for the first quarter of 2021 and is expected to resume the dividend after such time.

Mike Jennings, President and CEO of HollyFrontier commented, “We are excited to announce the acquisition of the Puget Sound Refinery, an asset with a strong record of financial and operational performance. We believe that the Puget Sound Refinery will complement our existing refining business, with sales into premium product markets and advantaged access to Canadian crude. We are committed to the continued safe and environmentally responsible operations of the facility and welcome Puget Sound’s highly skilled workforce to the HollyFrontier family.”

The Puget Sound Refinery is strategically located on approximately 850 acres in Anacortes, Washington, approximately 80 miles north of Seattle and 90 miles south of Vancouver. The 149,000 barrel per day facility is a large, high quality and complex refinery with catalytic cracking and delayed coking units and is well positioned geographically and logistically to source advantaged Canadian and Alaskan North Slope (“ANS”) crudes.

In addition to refining assets and an on-site cogeneration facility, the transaction includes a deep-water marine dock, a light product loading rack, a rail terminal, and storage tanks with approximately 5.8 million barrels of crude, product and other hydrocarbon storage capacity.

HollyFrontier was represented by Morgan Lewis & Bockius LLP, Wachtell, Lipton, Rosen & Katz and Marten Law LLP on this transaction.

HollyFrontier has posted presentation slides describing the transaction and scheduled a webcast conference call to discuss the acquisition and first quarter financial results on May 5, 2021 at 8:30 a.m. Eastern time.

The presentation slides and webcast may be accessed at: https://event.on24.com/wcc/r/3081846/EF98CFA2BFD7FDCC6F3E486A1640262F

An audio archive of this webcast will be available using the above noted link through May 19, 2021.

About HollyFrontier Corporation

HollyFrontier Corporation, headquartered in Dallas, Texas, is an independent petroleum refiner and marketer that produces high value light products such as gasoline, diesel fuel, jet fuel and other specialty products. HollyFrontier owns and operates refineries located in Kansas, Oklahoma, New Mexico, and Utah and markets its refined products principally in the Southwest U.S., the Rocky Mountains extending into the Pacific Northwest and in other neighboring Plains states. In addition, HollyFrontier produces base oils and other specialized lubricants in the U.S., Canada and the Netherlands, and exports products to more than 80 countries. HollyFrontier also owns a 57% 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 HollyFrontier Corporation subsidiaries.