This past week, Par Pacific announced the acquisition of Wyoming Refining, it operates a small refinery (18,000 bpd) and related logistics assets in Newcastle, WY which supplies the Rapid City, SD market and nearby Ellsworth Air Force Base. The refinery is in the attractive Rocky Mountain region (PADD IV) where oil supply outstrips local refining capacity and where demand is growing due to the increased industrial activity (although much of it is oil and gas related) in the region, this creates wider average crack spreads.
Par Pacific is paying $271MM for Wyoming Refining from a private equity owner and its expected to generate $50MM in EBITDA, or a 5.4x multiple, which unfortunately doesn't appear like a particularly distressed asset. The previous owners have invested significant capital recently to increase the capacity of the refinery which should minimize near term capex needs, but I was hoping the next deal would be a fire sale asset from a distressed E&P company, but onto the deal details and resulting change to the valuation.
Using the same basic frame work from a couple months back and updating for the recent Q1 results and Wyoming Refining acquisition:
Disclosure: I own shares of PARR