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Exhibit 99.1
Holly Energy Partners and Holly Corporation Announce Agreement
in Principle for Acquisition of Pipeline and Tankage
Assets
DALLAS,
TX, November 20, 2007 — Holly Energy Partners, L.P.
(NYSE:HEP) and Holly Corporation (NYSE:HOC) today announced an
agreement in principle for the acquisition by Holly Energy from
Holly of certain pipeline and tankage assets for approximately
$180 million. The approximate purchase price of
$180 million is expected to be paid in cash of approximately
$171 million and Holly Energy common units valued at
approximately $9 million. In connection with the closing of
the proposed transaction, Holly and Holly Energy would enter into a
15-year pipelines and tankage agreement containing minimum annual
revenue commitments from Holly. Holly Energy expects to finance the
cash portion of the acquisition through a combination of issuance
of debt and borrowings under the Partnership’s
$100 million revolving credit facility. The proposed
transaction has been approved by the Boards of Directors for both
Holly Energy and Holly after approvals by the Conflicts Committee
for Holly Energy, which is comprised solely of independent outside
directors for Holly Energy, and the Holly Audit Committee, which is
composed solely of outside directors of Holly. The Boards of
Directors for both companies have obtained fairness opinions from
financial advisory firms in connection with this proposed
transaction. Completion of the transaction is subject to Holly
Energy’s obtaining satisfactory financing and to other
customary closing conditions. The companies expect the proposed
transaction to close during the fourth quarter of 2007 or the first
quarter of 2008.
These
assets being acquired consist of:
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The Navajo Refinery crude oil delivery
system—Approximately 136 miles of crude oil trunk lines
delivering crude to the Navajo refining facility in Southeast New
Mexico. |
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Western Permian Basin crude gathering lines plus lease
connection lines—Approximately 675 miles of gathering and
connection pipelines located in West Texas and New Mexico. These
lines primarily connect to the acquired crude oil refinery delivery
system. |
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Refinery on-site crude tankage located within the Navajo and
Woods Cross refinery complexes, with approximately 600,000 barrels
per day of storage capacity. |
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Artesia to Roswell, New Mexico jet fuel products pipeline and
terminal (terminal leased through September 2011). |
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Woods Cross Refinery pipelines—Approximately 14 miles of
crude oil and product pipelines. |
“This acquisition fits well into Holly Energy’s
strategy of disciplined growth through the addition or expansion of
steady income generating assets. As with all of
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