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Subsequent Event
3 Months Ended
Mar. 31, 2012
Subsequentevents [Abstract]  
Subsequent Events

(12) Subsequent Event

 

Investment in HEP. On April 4, 2012, the Partnership made a $47.4 million payment to HEP related to HEP's acquisition of substantially all of Meritage Midstream Services' natural gas gathering assets in south Texas which was funded by the Partnership's credit facility. After this capital contribution, the Partnership has contributed an aggregate of $87.3 million and has an individual ownership interest in HEP of approximately 30.6 percent.

 

Clearfield Acquisition. On May 8, 2012, the Partnership announced its agreement to acquire privately held Clearfield Energy, Inc. (“Clearfield”) for approximately $210 million in cash at closing subject to certain adjustments (the “Clearfield Acquisition”). Clearfield is a well-established crude oil, condensate and water services company with operations in Ohio, Kentucky and West Virginia. Clearfield's business includes crude oil pipelines, a barge loading terminal on the Ohio River, a rail loading terminal on the Ohio Central Railroad network, a trucking fleet, and brine water disposal wells.

 

The Partnership plans to fund the Clearfield Acquisition with a combination of debt and equity. The closing of the Clearfield Acquisition, which is expected in July 2012, is subject to the satisfaction of customary closing conditions, including applicable regulatory approvals, if any.

Riverside Fractionation Facility Expansion. On May 7, 2012, the Partnership announced its plans to increase its capacity to transload crude oil from rail cars to both barges and pipeline at its Riverside fractionation facility in southern Louisiana from approximately 4,500 barrels of crude oil per day to approximately 15,000 barrels of crude per day. The Phase I modification of the Riverside facility, which allowed crude as well as NGLs to be transloaded from rail to barge, was operational in January 2012. The Phase II development at the Riverside facility will include new storage tank facilities, upgraded pipeline connections and improved barge delivery capabilities on the Mississippi River. Construction of the Phase II expansion project at the Riverside facility will begin in late June 2012 and is expected be operational in the first quarter of 2013. The Riverside facility expansion project is expected to cost approximately $16 million. The Partnership has entered into a long-term agreement with, which supports the expansion.