Frontier-Holly merger complete
07/08/2011 6:49 AM
07/08/2011 6:49 AM
Frontier Oil Corp., which owns the refinery in El Dorado, has completed its a $2.85 billion all-stock merger with Holly Corp. to form HollyFrontier Corp.
HollyFrontier will be based in Dallas, Holly's current headquarters. Frontier president and CEO Mike Jennings will be president and CEO of HollyFrontier. Holly chairman and CEO Matt Clifton will be executive chairman.
No changes are expected in the El Dorado refinery's operations, staffing or business plans. It has about 430 employees.
"If anything we'll want to grow the refinery," Jennings said Thursday.
The refinery will benefit from being able to work closely with the Holly refinery in Tulsa to produce each other's intermediaries.
"This wasn't built on cutting costs, but to make it more effective in the market," Jennings said.
With a history going back to 1917, the El Dorado Refinery can refine up to 135,000 barrels per day of a wide variety of crude oils into gasoline, diesel and jet fuel. Its largest markets are the eastern half of Colorado, including the Denver area, eastern Wyoming and the Plains States.
The biggest immediate change is that the refinery will be rebranded with the new HollyFrontier logo.
The merger makes HollyFrontier the fourth-largest independent oil refiner in the country in total capacity. It can refine more than 440,000 barrels per day in five refineries serving the Midwest, Rocky Mountain and Southwest. The company's network of pipelines and terminals gives it access to growing regional domestic and Canadian crude oil supplies.
Jennings said the merger made sense because it gives Frontier and Holly greater scale in a difficult operating environment.
"The principal competition is coming from regulation and increased use of biofuels," he said. "This in a relatively slack economy that is making it difficult for smaller players to stay in the game."
With greater size, the new company can more easily make big investments in refineries and weather cyclical ups and downs.