EXHIBIT 99.1
GIANT INDUSTRIES, INC.
GI LISTED NYSE
NEWS RELEASE
Contact: Mark B. Cox
Vice President, Treasurer, & Financial Officer
Giant Industries, Inc.
(480) 585-8888
Sarah Howell, BP, NY Press Office
(212) 451-8021
FOR IMMEDIATE RELEASE
February 12, 2002
GIANT INDUSTRIES, INC. ANNOUNCES ACQUISITION
OF YORKTOWN, VIRGINIA REFINERY FROM BP
Scottsdale, Arizona (February 12, 2002) - Giant Industries, Inc. [NYSE: GI]
and BP p.l.c. [NYSE: BP] announced today that they have reached an agreement
for Giant to acquire BP's Yorktown, Virginia refinery for $127.5 million
plus the value of inventory at closing, currently estimated to be $42
million. Additionally, the agreement includes potential payments not to
exceed $25 million if certain refining margin levels are met beginning in
the year 2003 and concluding at the end of 2005.
All regulatory approvals and contingencies are expected to be resolved
including a right of first refusal held by adjacent property owner. The
transaction is projected to close in the second quarter. The refinery
acquisition will be financed with a combination of bank debt and cash on
hand.
The refinery is located in Yorktown, Virginia, on the York River and has a
crude oil processing capacity of 62,000 barrels per day. The product
slate, approximately 50% gasoline, also includes a wide range of products
such as diesel fuel, heating oil and coke. The refinery is the only
refinery in Virginia and is able to serve the local area, as well as the New
York Harbor.
Jim Acridge, Giant's Chairman and Chief Executive Officer stated, "I believe
we have found a refining operation with as much flexibility as any in the
United States. A portion of the market served by the refinery enjoys local
distribution benefits similar to those of our current refinery operations.
This purchase more than doubles our refining capacity, bringing this total
to approaching 100,000 barrels per day. This refinery has the ability to
select from a wide range of world crude oils and raw material supplies to
produce very high percentages of high value light products at prices that
can produce strong netbacks. This refinery is well positioned to do several
things: deliver product to many nearby market terminals on short notice to
supplement unexpected shortages; to market to a number of markets selected
to respond to stronger product margins; and to exchange products to and from
the Gulf Coast and New York Harbor."
Acridge continued, "Furthermore, over recent years, the area has enjoyed
solid population growth and product demand both in Virginia and the
surrounding areas. The refinery personnel and their long-term experience in
operating the Yorktown refinery are an ingredient that we are fortunate to
inherit and we expect to maintain the workforce currently employed by BP at
Yorktown."
"We are delighted that Giant has recognized this refinery is a top
performer, and that they plan to offer employment to all of the current
workforce. This is an important reassurance to our employees, the markets
and the communities served," said Ross Pillari, President of BP America.
The Bank of America served as financial advisor to Giant and Rothschild,
Inc. has served as advisor to BP.
Giant Industries, Inc., headquartered in Scottsdale, Arizona, is a refiner
and marketer of petroleum products. Giant owns and operates two New Mexico
crude oil refineries, a 260 mile crude oil gathering pipeline system based
in Farmington, NM, which services the refineries, finished products
distribution terminals in Albuquerque, NM and Flagstaff, AZ., a fleet of 150
crude oil and finished product truck transports, a Travel Center on I-40
east of Gallup, and a chain of 164 retail service station/convenience stores
in New Mexico, Colorado, Utah, and Arizona. Giant is also the parent company
of Phoenix Fuel Co., Inc., Arizona's largest independent petroleum products
distributor. Visit Giant's website at www.Giant.com.
BP is one of the world's largest petroleum and petrochemicals companies.
Its main activities are exploration and production of crude oil and natural
gas; oil refining, marketing and transportation; gas marketing and power
generation; and the production and marketing of petrochemicals. The company
also manufactures and sells photo-voltaic panels for solar power generation.
Visit BP's website at www.BP.com.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act
of 1995: This press release and the attached Fact Sheet contains forward-
looking statements that involve known and unknown risks and uncertainties.
Forward-looking statements are identified by words or phrases such as
"believes," "expects," "anticipates," "estimates," "should," "could,"
"plans," "intends," variations of such words and phrases, and other similar
expressions. While these forward-looking statements are made in good faith,
and reflect the Company's current judgment regarding such matters, actual
results could vary materially from the forward-looking statements. Important
factors that could cause actual results to differ from forward-looking
statements include, but are not limited to: the ability to satisfy
regulatory contingencies and approval requirements; the availability and
costs of crude oil, other refinery feedstocks and refined products; changes
in the cost or availability of third-party vessals, pipelines and other
means of transporting feedstocks and products; and other risks detailed from
time to time in the Company's filings with the Securities and Exchange
Commission. All subsequent written and oral forward-looking statements
attributable to the Company, or persons acting on behalf of the Company, are
expressly qualified in their entirety by the foregoing. Forward-looking
statements made by the Company represent its judgement on the dates such
statements are made. The Company assumes no obligation to update any
forward-looking statements to reflect new or changed events or
circumstances.
FACT SHEET
REFINERY AT A GLANCE
Location: Yorktown, Virginia
Capacity: 61,900 barrels per stream day (bpsd) of crude oil
Major Processing Units: Vacuum Unit 41,000 bpsd
Fluid Catalytic Cracking Unit 28,130 bpsd
Delayed Coking Unit 19,500 bpsd
Catalytic Reforming 11,900 bpsd
NAPTHA Desulfurization Unit 12,500 bpsd
Distillate Desulfurizer Unit 19,000 bpsd
Feedstocks: Coastal location provides access to worldwide crude
oil and feedstocks
Products: Gasoline (52%)
Distillates (33%)
Other Products (15%)
Complexity Rating: 11.0 (based upon Solomon report)
Primary Markets: Virginia (Yorktown, Norfolk)
Maryland (Salisbury)
North Carolina
New York Harbor
Employees: Approximately 194 proprietary employees and 60
contracted employees
PRO FORMA FORECASTED FINANCIAL INFORMATION (Yorktown Refinery Only)
(Nearest $ millions, except per share data)
Unaudited Pro Forma Forecasts
--------------- ----------------------------------------------
YTD 5 Year
2000 09/30/01 Average 2002e 2003e 2004e 2005e 2006e
EBITDA $72.0 $53.0 $47.6 $32.5 $38.7 $45.1 $62.8 $58.7
Net Earnings N/A N/A $16.5 $7.8 $11.5 $15.3 $26.0 $22.1
Incremental EPS N/A N/A $1.93 $0.91 $1.35 $1.80 $3.04 $2.59
Notes to Pro Forma Forecasted Financial Information:
1. The pro forma forecasted financial information presented above represents
the estimated effects of the Yorktown Refinery only and excludes Giant's
existing operations.
2. Although EBITDA is not defined by GAAP, the Company believes that it is
an important industry measurement. EBITDA is defined as earnings before
interest expense, income tax, depreciation and amortization. The forecasted
pro forma EBITDA is based upon estimates of forecasted refinery margins
prepared by an independent third party consultant and the Company's
estimates of operating and other costs over the forecast period. The EBITDA
for the calendar year 2000 and the nine months ended September 30, 2001 are
unaudited and are back-cast.
3. Estimated net earnings are after depreciation, interest expense and a 40%
provision for income taxes. Interest expense was calculated using the
anticipated initial financing structure.
4. The incremental earnings per share (EPS) estimate assumes a weighted average
number of Giant's shares of 8.554 million outstanding over the forecast
period.