OLD GREENWICH, Conn., March 30 /PRNewswire-FirstCall/ -- Premcor Inc.
(NYSE: PCO) today announced that in connection with its previously announced
transaction to acquire Motiva Enterprises LLC's Delaware City, Delaware
refining complex, its wholly owned subsidiary, The Premcor Refining Group
Inc., has executed the definitive agreement with Motiva for the purchase of
the facility. In addition, the waiting period pursuant to the requirements of
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, expired
on March 8, 2004 without comment. The acquisition is expected to close before
the end of the second quarter of 2004 at a purchase price of $800 million plus
net working capital currently estimated at $100 million. Premcor plans to
finance the asset purchase with approximately equal parts equity and debt,
with the net working capital funded from available cash.
Commenting on the acquisition, Thomas D. O'Malley, Premcor's Chairman and
Chief Executive Officer, said, "We are looking forward to completing the
acquisition of the Delaware City refinery. The 180,000 bpd refining complex,
which increases Premcor's total refining capacity by 30 percent, represents
continued enhancement of our existing asset base through additional
geographical diversification, enhanced heavy crude oil conversion capability,
increased earnings, and positive cash flow. We have completed our due
diligence in connection with this acquisition. Based on Premcor's 2004
budgeted price set, on a pro-forma basis, we expect that the acquisition will
be approximately 27 percent accretive to earnings and increase cash flows from
operations by approximately 30 percent. We expect full integration to be
completed, including additional refinements to the petroleum coke gasification
and cogeneration facilities, by the beginning of the third quarter of 2004."
Premcor has updated the pro-forma earnings and cash flow forecasts
originally presented to investors at a January 15, 2004 analyst meeting and
included in Premcor's current report on Form 8-K that was filed with the SEC
on January 16, 2004. The updated information will be filed with the SEC
tomorrow, March 31, 2004 in the company's current report on Form 8-K. Our SEC
filings can be accessed on the Investor Relations section of the Premcor Inc.
website at http://www.premcor.com .
Commenting on the first quarter O'Malley said, "We have seen a strong
refining market in the first quarter of 2004. We expect to meet or exceed
current First Call consensus estimates for the first quarter. These results
will include the effect of scheduled and unscheduled downtime at our Port
Arthur, Texas refinery, a full refinery turnaround at our Lima, Ohio facility
and natural gas prices averaging $5.39 per mmbtu." Reaffirming guidance on
first quarter operations provided in the company's 2003 Form 10-K, O'Malley
said, "The Port Arthur refinery is expected to average a crude oil throughput
rate of approximately 205,000 bpd in the first quarter of 2004. The Lima
refinery has been shutdown for the majority of the month of March for major
turnaround activity and will average approximately 105,000 bpd during the
first quarter. Our Memphis refinery will average approximately 140,000 bpd
for the quarter. No additional major maintenance is scheduled until the
fourth quarter of 2004, when the Port Arthur refinery will have a major
turnaround."
Premcor Inc. is one of the largest independent petroleum refiners and
marketers of unbranded transportation fuels and heating oil in the United
States.
This press release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995, including the
company's current expectations with respect to future market conditions,
future operating results, the future performance of its refinery operations,
and other plans. Words such as "expects," "intends," "plans," "projects,"
"believes," "estimates," "may," "will," "should," "shall," and similar
expressions typically identify such forward-looking statements. Even though
Premcor believes the expectations reflected in such forward-looking statements
are based on reasonable assumptions, it can give no assurance that its
expectations will be attained. Factors that could cause actual results to
differ materially from expectations include, but are not limited to,
operational difficulties, varying market conditions, potential changes in
gasoline, crude oil, distillate, and other commodity prices, government
regulations, and other factors contained from time to time in the reports
filed with the Securities and Exchange Commission by the company and its
subsidiary, The Premcor Refining Group Inc., including quarterly reports on
Form 10-Q, current reports on Form 8-K, and annual reports on Form 10-K.
SOURCE Premcor Inc.
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Related links:
http://www.premcor.com
CONTACT:
Media-Investors, Karyn Ovelmen,
+1-203-698-5669, or Investors, Michelle Kilic, +1-203-698-5921,
both of Premcor Inc.
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