Flying J announced last week that it is taking another step toward exiting the Chapter 11 reorganization the company filed on Dec. 22, 2008. Flying J and its subsidiary, Big West of California, LLC, announced that they have entered into an Asset Purchase Agreement with Paramount Petroleum Corp., a subsidiary of Alon Energy USA, Inc., to sell their interest in the Bakersfield Refinery to Paramount.
Completion of the acquisition is subject to a bankruptcy court-approved auction process, bankruptcy court approval, and other customary regulatory approvals. Paramount will be the “stalking horse” bidder in the bankruptcy auction process for the Refinery.
The purchase price for the Refinery is $40 million plus the fair market value of inventory. Non-permitted Clean Fuels Project Equipment and a buffer parcel of property (approximately 250 acres) were excluded from the transaction. The agreement also includes an assumption of environmental
clean-up obligations.
The Bakersfield Refinery comprises a 70,000 BPD refinery (9.2 Nelson complexity factor) and supporting operations network situated on a 942-acre site in Bakersfield, CA. Associated with the Refinery are logistics assets including a product loading facility, crude truck terminal and 2.6
million barrels of “tankage.”
According to Flying J, Big West acquired the Bakersfield Refinery from Shell in March 2005. The Refinery produces a full slate of petroleum products, including low-sulfur CARB OB gasoline, CARB diesel and gas oil. In addition, the refinery has received all significant permits to construct a Hydrocracker unit designed to further enhance its profitability by converting the refinery’s lower-value gas oils to lighter, higher margin diesel and gasoline products.
