The proposed transaction follows recent consolidation
moves by both independent refiners, including Tesoro’s acquisition of Dakota Prairie Refining LLC, the former MDU
Resources-Calumet Specialty Products Partners LP joint venture that operated a 20,000-b/d diesel refinery near Dickinson, ND, and Western’s takeover of Northern Tier Energy LP’s
high-conversion refinery at St. Paul Park, Minn. (OGJ Online,
June 28, 2016; June 24, 2016).
Assala Energy to buy Shell’s Gabon
onshore interests for $587 million
Assala Energy Holdings Ltd., a portfolio firm of global alternative asset manager Carlyle Group, has agreed to acquire
all of Royal Dutch Shell PLC’s onshore oil and gas operations
and related infrastructure in Gabon for $587 million.
The deal, expected to close midyear, comprises the operated Rabi, Toucan-Robin, Gamba-Ivinga, Koula-Damier, and
Bende-M’Bassou-Totou fields; interest in nonoperated Atora,
Avocette-M’Boukou, Coucal, and Tsiengui West fields; and
associated systems of the onshore pipeline system from Rabi
to Gamba and the Gamba Southern export terminal.
Shell onshore in Gabon produced 41,000 boe/d in 2016.
Shell Trading will continue to have lifting rights from the assets for the coming 5 years. Assala Energy will also assume
$285 million in debt as part of the deal. The firm will make
additional payments of as much as $150 million depending
on production performance and commodity prices. The deal
will result in an impairment charge of $53 million post tax,
which will be taken in the first quarter.
Assala Energy Holdings will acquire the assets with equity from Carlyle International Energy Partners and Carlyle
Sub-Sahara Africa Partners.
Shell also agreed to divest nearly all of its Canadian oil
sands interests for $7.25 billion. In January, it agreed to sell
oil and gas assets in the UK North Sea and Thailand for nearly $5 billion.
Last year’s gulf divestment comprised 100% of the record
title interest in Green Canyon Blocks 114, 158, 202, and 248,
including Shell’s Brutus and Gilder assets, for $425 million
in cash. The firm, however, maintains an active presence in
the US gulf.
Last month, Shell led all firms in central gulf Lease Sale
247, making 20 bids totalling $55.9 million, including the
single-highest apparent bid of $24.1 million on Atwater Valley Block 64 as well as $5.1 million on Mississippi Canyon
Block 845 (OGJ Online, Mar. 22, 2017).
approve proposed merger
Downstream Technology Editor
Shareholders of US independent refiners Western Refining
Inc. and Tesoro Corp. have approved Tesoro’s previously announced plan to acquire Western in a deal valued at more
than $6 billion (OGJ Online, Nov. 17, 2016).
The proposed merger, which was approved by both companies at special stockholders’ meetings on Mar. 24, remains
on schedule to close during this year’s first half, pending satisfaction or waiver of customary closing conditions, Tesoro and
Shareholder approvals follow a late-2016 agreement between the companies under which Tesoro agreed to purchase
Western at an implied current price of $37.30/share in a stock
transaction that, based on Tesoro’s Nov. 16 closing stock price
of $85.74/share, represents an equity value of $4.1 billion and
an enterprise value of $6.4 billion, including Tesoro’s assumption of Western’s $1.7 billion net debt and the $605-million
market value of its noncontrolling interest in Western Refining Logistics LP.
Should the merger be completed, Tesoro will acquire the
following assets from Western:
• A total of 254,000 b/sd (241,300 b/d) in refining com-
bined refining capacity from Western’s three refineries, which
include the 131,000-b/sd (124,450-b/cd) El Paso, Tex., refin-
ery; the 25,000 b/sd ( 23,750 b/cd) refinery near Gallup, NM;
and the 98,000-b/sd (93,100-b/cd) St. Paul Park refinery.
• Access to price-advantaged crude feedstock in the Permian, San Juan, and Bakken basins as well as the Western Canadian Sedimentary Basin.
• Access to a fully integrated crude pipeline system that
serves western refineries and third parties, including a 17%
interest in the 465,000-b/d Minnesota pipeline, the primary
supply route for western Canadian and North Dakota crude to
the St. Paul Park refinery.
• Refined product storage and distribution pipelines to retail and wholesale customers.
• About 545 retail outlets in Arizona, Colorado, New
Mexico, Texas, Minnesota, and Wisconsin.
• Interest in Western Refining Logistics.
Following the merger, Tesoro would own ten refineries
with a combined refining capacity of more than 1. 1 million b/
sd ( 1.05 million b/cd), as well as combined retail operations
of more than 3,000 branded retail outlets operating under a
variety of brands that, in addition to Tesoro-branded stations,
will include ARCO, Shell, Exxon, Mobil, SuperAmerica, and