Tesoro Logistics Reaches Agreement to Acquire the Los Angeles Storage and Pipeline Assets from Tesoro Corporation:
SAN ANTONIO - November 10, 2015 - Tesoro Logistics LP (NYSE:TLLP) today announced that TLLP and Tesoro Corporation (NYSE:TSO, Tesoro) have agreed upon terms for TLLP's acquisition of crude oil and refined product storage and pipeline assets in Los Angeles, California (the "Los Angeles Refinery Storage and Handling Assets") owned by subsidiaries of Tesoro, for a total consideration of $500 million. The assets include 97 crude oil, feedstock and refined product storage tanks with combined capacity of 6.6 million barrels and a 50% interest in Line 88, a 16-mile pipeline that transports jet fuel from Tesoro's Los Angeles Refinery to the Los Angeles International Airport with average throughput of 25,000 barrels a day. The Los Angeles Refinery Storage and Handling Assets have an expected annual EBITDA of $60 million.
The acquisition price of $500 million will include cash of approximately $250 million and the issuance of common and general partner units to Tesoro, valued at approximately $250 million. The equity consideration will be based on common TLLP units issued at the average daily closing price for the 10 trading days prior to the closing of the transaction.
"The acquisition of these storage and pipeline assets should expand our network of integrated crude oil and refined product infrastructure in Southern California and demonstrates our commitment to growing a full-service logistics business with a focus on stable, fee-based revenues," said Greg Goff, Chairman and Chief Executive Officer of TLLP's general partner. "We expect this transaction to be immediately accretive to unitholder distributions."
The transaction is expected to close later this week. In connection with the closing of the transaction, Tesoro and TLLP anticipate entering into a 10-year storage capacity commitment agreement requiring Tesoro to pay a monthly fee to reserve the existing shell capacity of the dedicated storage tanks.
About Tesoro Logistics LP
Tesoro Logistics LP is a leading full-service logistics company operating primarily in the western and mid-continent regions of the United States. TLLP owns and operates a network of over 3,500 miles of crude oil, refined products and natural gas pipelines. TLLP also owns and operates 28 crude oil and refined products truck and marine terminals and has over 9 million barrels of storage capacity. In addition, TLLP owns and operates four natural gas processing complexes and one fractionation facility. TLLP is a fee-based, growth oriented Delaware limited partnership formed by Tesoro Corporation and is headquartered in San Antonio, Texas.
This press release contains certain statements that are "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 concerning expected EBITDA from the Los Angeles Refinery Storage and Handling Assets; our commitment to growing a full-service logistics business with a focus on stable, fee-based revenues; our expectations regarding the transaction being immediately accretive to unitholder distributions; and our expectations regarding the closing date for the transaction. For more information concerning factors that could affect these statements, see the respective annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K for Tesoro Corporation and Tesoro Logistics LP, filed with the Securities and Exchange Commission. We 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, after the date hereof.
Evan Barbosa, Investor Relations Manager, (210) 626-7202
Tesoro Media Relations, firstname.lastname@example.org, (210) 626-7702
This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX 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: Tesoro Logistics LP via Globenewswire
Source: Thomson Reuters ONE
(November 10, 2015 - 4:35 PM EST)
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