Refinery operator Holly Energy Partners, L.P. declared a 35-cent a unit cash distribution for the quarter, nearly half of what it was in the previous quarter.
Owner of a refinery in Tulsa as well as El Dorado, Kansas and others the company said the first quarter 2020 distribution will be paid May 14 to unitholders of record on May 4, 2020.
The Board of Directors also indicated its changed distributed strategy includes funding all capital expenditures within free cash flow and reduce leverage.
HEP expects to maintain the quarterly distribution constant at $0.35 per unit, or $1.40 on an annualized basis for the balance of 2020.
“This announcement reflects a significant shift in HEP’s distribution strategy based on both the current environment and our expectations for the future,” commented Mike Jennings, Chief Executive Officer. “We believe a strategy of funding growth and distributions with cash flow, while deleveraging the balance sheet and enhancing liquidity best positions HEP to create long-term value for its unitholders.
As of March 31, 2020, HEP had approximately $400 million in liquidity, including cash and availability under its $1.4 billion credit facility which matures in July 2022. HEP’s projected capital expenditures for 2020 remain unchanged at $58 – $69 million.
Source: Business Wire