A $17.5 million purchase of loading facilities in Tulsa by Dallas-based Holly Energy Partners, L.P. from Holly Corporation became official on Wednesday.
The purchase involved truck and rail loading and unloading facilities at Holly’s refinery in Tulsa. In announcing the acquisition, the company said it anticipates nearly $2.7 million incremental annual revenue.
The company paid cash for the facilities and the purchase as financed through Holly Energy’s revolving credit facility. It also entered into a 15-year equipment and throughput agreement. Holly will pay Holly Energy a per barrel fee for each barrel loaded or unloaded at the facilities.
At the same time, Holly Energy Partners announced second quarter 2018 results showing net income was $40.1 million which figured to 38 cents a share. It was a slight drop from the $41.3 million reported a year ago.
Distributable cash flow was up 7% to reach $65.2 million and the company said it was the 55th consecutive distribution increase. The company blamed the drop in earnings primarily due to higher interest expense partially offset by higher crude pipeline throughputs and revenues.
Revenues for the quarter were $118.8 million, an increase of $9.6 million compared to the second quarter of 2017. The increase is primarily attributable to the company’s acquisition of the remaining interest in the SLC and Frontier pipelines, which led to an increase in overall pipeline volumes of 24%.
Revenues from crude pipelines totaled $27.2 million which was a more than $10 million increase over the second quarter of 2017.
Revenues from terminal, tankage and loading race fees totaled $34.4 million, a $2 million drop compared to one year ago.
Meanwhile higher volumes at the firm’s Woods Cross refinery processing units resulted in a $1.3 million increase in revenues from refinery processing units. The revenues totaled $18.8 million.