Richard: <<the "Crude Unit" has a 30,000 barrel-per day capacity... 220,000 barrels crude storage>>
30,000 bpd is tiny for a refinery. If this were a medium complexity refinery (which is doubtful due to its small size), it would probably cost about $300 million to build as a greenfield site. Therefore on an economic basis at roughly $0.10 market value per $1.00 replacement cost for a medium complexity refinery, the refinery is probably worth about $30 million (give or take a few million), or less than $1/share at the very best, for the fixed assets. Unfortunately, we're at the absolute bottom of the market right now for refining asset transactions, so it's not a very good time to be selling. Saloman Inc. (parent of Saloman Brothers) effectively "paid" Valero (VLO) to take their Basis Petroleum subsidiary off of their hands (i.e., they sold the business for a grand total of less than the previous year's capital investment expenditure). Plus there are environmental liabilities to consider, and any buyer is going to resist taking on those liabilities from the seller.
Are there any notes in the financials about the amount of inventory still on site? If the tanks are still full, this could be material: 220,000 bbls of crude is worth about $4 million, and 345,000 bbls of finished product is worth about $7 million. When Ultramar Diamond Shamrock (UDS) recently bought Total Petroleum North America (TPN) for over $800 million, almost half of the total purchase price was for inventories.
Razor |
