HollyFrontier Corporation announced a series of strategic actions including a $1 billion share buyback program.
The actions target growth, risk management and shareholder returns and include a new renewable diesel unit project for the company that operates refineries in Tulsa, Oklahoma and other sites across the U.S.
The renewable diesel unit project at the compan’s Artesia refinery carries an estimated cost of $350 million and will allow HollyFrontier to process soybean oil and other renewable feedstocks into renewable diesel. It will also allow the company to meet the demand for low-carbon fuels while covering the cost of the firm’s annual RIN purchase obligations under market conditions. The project includes rail infrastructure and storage tanks.
HollyFrontier’s Board of Directors authorized a new $1 billion share repurchase program. This authorization replaces all existing share repurchase authorizations, of which there was approximately $281 million remaining. Over the past 15 months, HollyFrontier has returned over $719 million to shareholders under its previous share repurchase program and reduced the outstanding share count by 8%.
Commenting on the announcements, Franklin Myers, Chairman of the Board of HollyFrontier, stated, “We expect our new renewable diesel plant will generate attractive returns and help us meet our requirements under the Renewable Fuel Standard. At the same time, we are increasing cash returns to shareholders through an increase in our regular dividend with a path for future dividend growth and a new HollyFrontier share repurchase authorization.”
On November 13, 2019, HollyFrontier announced that its Board of Directors declared a regular quarterly dividend of $0.35 per share, an increase of 6% from $0.33 per share the prior quarter, payable on December 11, 2019 to holders of record of common stock on November 27, 2019. Over the next three years, HollyFrontier plans to review the dividend annually and target an expected dividend growth rate of approximately 5% per year.
Source: HollyFrontier announcement