Subsequent Events

3 Months Ended

Mar. 31, 2020

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

Dividend Declaration

On May 4, 2020, our Board of Directors voted to declare a quarterly cash dividend of $0.31 per share of our common stock, payable on June 3, 2020 to shareholders of record on May 20, 2020.

2020 Amendments to Supply and Offtake Agreements

In April 2020, we amended our three Supply and Offtake Agreements with J. Aron to extend the respective terms to December 30, 2022, with J. Aron having the sole discretion to further extend the agreements to May 30, 2025. As part of this amendment, there were changes to the underlying market index, annual fee and the crude purchase fee. See Note 7 for further discussion.

COVID-19 Pandemic and OPEC Production Disputes Subsequent Events

Subsequent to quarter end, steps taken to address the COVID-19 Pandemic and developments in the OPEC Production Disputes significantly impacted supply and demand in global oil and gas markets, causing oil prices to decline sharply, as well as other changes to the economic outlook in the near term. Such subsequent developments included but are not limited to government-imposed temporary business closures and voluntary shelter-at-home directives as well as developments in production discussions between global oil producers, and the effect thereof. Oil prices as well as demand are expected to continue to be volatile as a result of the near-term over-supply and the ongoing COVID-19 Pandemic as changes in oil inventories, industry demand and global and national economic performance are reported, and we cannot predict when prices and demand will improve and stabilize. We are currently unable to estimate the impact these events will have on our future financial position and results of operations. Accordingly, we can give no assurances that the events will not have a material adverse effect on our financial position or results of operations, and the information presented in this Quarterly Report on Form 10-Q should be considered in light of these events.

Sale of Bakersfield Non-Operating Refinery

On May 7, 2020, we sold our equity interests in Alon Bakersfield Property, Inc., an indirect wholly-owned subsidiary that owns our non-operating refinery located in Bakersfield, California, to a subsidiary of Global Clean Energy Holdings, Inc. (“GCE”), a southern California-based renewable energy company, for total cash consideration of $40 million. GCE intends to repurpose the refinery to produce renewable diesel and possibly renewable jet fuel. As part of the transaction, GCE granted a call option to Delek to acquire up to a 33 1/3% interest in the acquiring subsidiary, GCE Acquisitions, exercisable by Delek through the 90th day after GCE demonstrates commercial operations, as contractually defined.