Holly Corp. Chairman and CEO expects the company's $65 million purchase of an 85,000-barrel-per-day Sunoco refinery in Tulsa, Okla., will position the company for growth in the specialty lubricant products business.
Clifton commented on the transaction when the companies announced the deal on April 16.
"In addition to a very attractive price, the Tulsa acquisition provides Holly with added asset, geographic, and product diversity," said Clifton in a statement. "The Tulsa refinery produces an industry-recognized portfolio of specialty lube oils, process oils and waxes, as well as transportation fuels. The talented Tulsa employees and the specialty lubricant products management team who will be joining Holly have done a great job optimizing the capabilities of the facility."
Clifton added that by leveraging Sunoco's specialty lubricant brand and formulations, the refinery achieved strong gross margins.
Holly Corp.
At A Glance
Holly Corp.
Dallas, Texas
Primary Industry: Petroleum & Coal Products
Number of Employees: 909
2007 In Review
Revenue: $4.79 billion
Profit Margin: 6.97%
Sales Turnover: 2.88
Inventory Turnover: 29.62
Revenue Growth: 19.10%
Return On Assets: 26.99%
Return On Equity: 71.69%
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"This strength in specialty lubricant products, together with an approximate 40% yield of diesel and jet fuel and the bottoms upgrading capabilities of the plant's coker, has allowed the overall operation to deliver attractive gross margins and solid financial results. The facility's proximity to and direct pipeline connection from the Cushing, Okla., crude oil hub combined with its ability to deliver directly into Burlington Northern's Tulsa railroad yard and Magellan's pipeline system, allows the facility to competitively supply transportation fuels to a number of attractive mid-continent markets."
Holly also plans to build a new diesel desulfurizer and associated equipment at the Tulsa refinery by the end of 2011, according to Clifton. The addition will allow the facility to produce all of its diesel fuel as ultra low sulfur diesel. The company estimates project costs to be approximately $150 million.
The company will release its first-quarter results on May 7.
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