Item 7.01 Regulation FD Disclosure.
Capital Expenditure Guidance
For fiscal year 2022, HollyFrontier Corporation ("HollyFrontier") expects
consolidated capital and turnaround cash spending guidance, inclusive of Holly
Energy Partners, L.P. ("HEP") and its subsidiaries as consolidated subsidiaries
of HollyFrontier, as set forth in the table below:
Expected Cash Spending Range
(In Millions)
HollyFrontier Capital Expenditures
Refining and Marketing $ 250.0 $ 270.0
Renewables 225.0 300.0
Lubricants & Specialties Products 45.0 60.0
Turnarounds & catalyst 70.0 100.0
Total HollyFrontier $ 590.0 $ 730.0
HEP Capital Expenditures
Maintenance $ 15.0 $ 20.0
Expansion and joint venture investment 5.0 10.0
Refining unit turnarounds 35.0 50.0
Total HEP $ 55.0 $ 80.0
Total $ 645.0 $ 810.0Corporate Segment and Renewables Segment Updates
Beginning in the fourth quarter of 2020, activities associated with the
conversion of HollyFrontier's Cheyenne, Wyoming refinery to renewable diesel
production, along with the construction of renewable diesel and pre-treatment
units in Artesia, New Mexico were reported in HollyFrontier's Corporate and
Other segment.
The Cheyenne renewable diesel unit is mechanically complete and we expect to
make our first sales of renewable diesel in the first quarter of 2022. The
pre-treatment unit, located at the Artesia, New Mexico facility is expected to
be completed in the first quarter of 2022, and the Artesia renewable diesel unit
is now expected to be completed in the second quarter of 2022. As previously
disclosed, we expect to spend a total of $800-900 million for all three
projects. Beginning in the first quarter of 2022, renewable diesel operations
will cease to be reported in HollyFrontier's Corporate and Other segment and
will be reported under a new Renewables reporting segment.
Refining Geographic Operating Data
As previously disclosed, on November 1, 2021, a wholly owned subsidiary of
HollyFrontier, HollyFrontier Puget Sound Refining LLC, completed the acquisition
of the Puget Sound refinery, the on-site cogeneration facility and related
logistics assets located in Anacortes, Washington (the "Puget Sound Refinery")
from Equilon Enterprises LLC d/b/a Shell Oil Products US.
Beginning in the fourth quarter of 2021, Puget Sound Refinery operating data
will be included in the West region within the Refining segment. The
Mid-Continent region will continue to be comprised of the
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Corporation's El Dorado and Tulsa refineries, and the West region will be
comprised of the Corporation's Navajo, Woods Cross and Puget Sound refineries.
The information contained in, or incorporated into, this Item 7.01 is being
furnished and shall not be deemed "filed" for the purposes of Section 18 of the
Securities Exchange Act of 1934, as amended, or otherwise subject to the
liabilities of that section, nor shall it be deemed incorporated by reference
into any registration statement or other filing under the Securities Act of
1933, as amended, except as shall be expressly set forth by specific reference
in such filing.
Cautionary Note Regarding Forward Looking Statements
This Current Report on Form 8-K report contains certain "forward-looking
statements" within the meaning of the federal securities laws. All statements,
other than statements of historical fact included in this Form 8-K, including
those under "Corporate Expenditure Guidance" and "Corporate Segment Guidance",
are forward-looking statements. Forward-looking statements use words such as
"anticipate," "project," "expect," "plan," "goal," "forecast," "strategy,"
"intend," "should," "would," "could," "believe," "may," and similar expressions
and statements regarding our plans and objectives for future operations.
Examples of forward-looking statements include, among others, the statements we
make regarding future capital expenditures, future Corporate segment operating
expenses, expected Renewables project capital expenditures, and the expected
timing for completion of, or sales of renewable diesel from, the Renewables
projects.
These statements are based on our beliefs and assumptions using currently
available information and expectations as of the date hereof, are not guarantees
of future performance and involve certain risks and uncertainties, including
those contained in our filings with the Securities and Exchange Commission.
Although we believe that such expectations reflected in such forward-looking
statements are reasonable, we cannot give assurance that our expectations will
prove to be correct. Therefore, actual outcomes and results could materially
differ from what is expressed, implied or forecast in these statements. Any
differences could be caused by a number of factors including, but not limited
to, the following: (i) HollyFrontier's ability to successfully close the pending
acquisition by HollyFrontier and HEP of Sinclair Oil Corporation and Sinclair
Transportation Company (collectively, "Sinclair", and such transactions, the
"Sinclair Transactions"), or once closed, integrate the operations of Sinclair
with its existing operations and fully realize the expected synergies of the
Sinclair Transactions or on the expected timeline; (ii) the satisfaction or
waivers of the conditions precedent to the proposed Sinclair Transactions,
including without limitation, the receipt of HollyFrontier stockholder approval
for the issuance of HF Sinclair common stock at closing and regulatory approvals
(including clearance by antitrust authorities necessary to complete the Sinclair
Transactions on the terms and timeline desired); (iii) risks relating to the
value of HF Sinclair common stock and the value of HEP's common units to be
issued at the closing of the Sinclair Transactions from sales in anticipation of
closing and from sales by the Sinclair holders following the closing of the
Sinclair Transactions; (iv) the cost and potential for a delay in closing as a
result of litigation challenging the Sinclair Transactions; (v) HollyFrontier's
ability to successfully integrate the operation of the Puget Sound refinery with
our existing operations; (vi) the demand for and supply of crude oil and refined
products, including uncertainty regarding the effects of the continuing COVID-19
pandemic on future demand; (vii) risks and uncertainties with respect to the
actions of actual or potential competitive suppliers and transporters of refined
petroleum products or lubricant and specialty products in HollyFrontier's
markets; (viii) the spread between market prices for refined products and market
prices for crude oil; (ix) the possibility of constraints on the transportation
of refined products or lubricant and specialty products; (x) the possibility of
inefficiencies, curtailments or shutdowns in refinery operations or pipelines,
whether due to infection in the workforce or in response to reductions in
demand; (xi)
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the effects of current and/or future governmental and environmental regulations
and policies, including the effects of current and/or future restrictions on
various commercial and economic activities in response to the COVID-19 pandemic;
(xii) the availability and cost of financing to HollyFrontier; (xiii) the
effectiveness of HollyFrontier's capital investments and marketing strategies;
(xiv) HollyFrontier's efficiency in carrying out and consummating construction
projects, including the ability to complete announced capital projects, such as
the conversion of the Cheyenne Refinery to a renewable diesel facility and the
construction of the Artesia renewable diesel unit and pretreatment unit, on time
and within capital guidance; (xv) the ability to timely obtain or maintain
permits, including those necessary for operations or capital projects; (xvi) the
ability of HollyFrontier to acquire refined or lubricant product operations or
pipeline and terminal operations on acceptable terms and to integrate any
existing or future acquired operations; (xvii) the possibility of terrorist or
cyberattacks and the consequences of any such attacks; (xviii) general economic
conditions, including uncertainty regarding the timing, pace and extent of an
economic recovery in the United States; (xix) a prolonged economic slowdown due
to the COVID-19 pandemic could result in an impairment of goodwill and/or
additional long-lived asset impairments; and (xx) other financial, operational
and legal risks and uncertainties detailed from time to time in HollyFrontier's
Securities and Exchange Commission filings, including the detailed risk factors
and other cautionary statements set forth under the heading "Risk Factors"
included in Item 1A in the HollyFrontier Annual Report on Form 10-K for the year
ended December 31, 2020 and the HollyFrontier Quarterly Report on Form 10-Q for
the quarter ended September 30, 2021. All forward-looking statements included in
this Form 8-K and all subsequent written or oral forward-looking statements
attributable to us or persons acting on our behalf are expressly qualified in
their entirety by these cautionary statements. The forward-looking statements
speak only as of the date made and, other than as required by law, HollyFrontier
undertakes no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
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