Delek Us Holdings, Inc. · NYSE:DK
Delek Us — Merger or Acquisition (March 2011)
28 slides from Delek Us's merger presentation, Mar 21, 2011
Slide 1: Delek US Holdings Agrees To Acquire A Majority Equity Interest In Lion Oil Company
Delek US Holdings Agrees To Acquire A Majority Equity Interest In Lion Oil Company March 21, 2011
Slide 2: Safe Harbor Provision
Safe Harbor Provision 2 Delek US Holdings is traded on the New York Stock Exchange in the United States under the symbol "DK" and, as such, is governed by the rules and regulations of the United States Securities and Exchange Commission. This presentation may contain forward-looking statements that
Slide 3: Transaction Overview
Transaction Overview SECTION ONE
Slide 4: Transaction Summary
Transaction Summary Asset Overview Purchase Summary 80,000 BPD refinery in El Dorado, Arkansas 80-mile Magnolia-El Dorado crude oil system (Shreveport, LA to Magnolia terminal) 28-mile El Dorado crude oil system (Magnolia terminal to El Dorado refinery) Crude oil gathering system with more than 800
Slide 5: Lion Oil Ownership History
Lion Oil Ownership History Timeline Inception of Lion Oil Ergon, Inc. and other investors assume ownership Delek US acquires 28.4% interest from a single shareholder Delek US acquires an additional 6.2% interest Delek US agrees to acquire an additional 53.7% controlling interest; ownership expected
Slide 6: El Dorado, Arkansas Refinery
El Dorado, Arkansas Refinery 6 Turnaround Inland, PADD III Refinery With Broad Distribution Footprint Throughout the Mid-Continent Medium Sour Crude Oil Refinery Typical crude gravity - 30.5°API Typical crude sulfur - 1.75% Key Sources of Crude Local Arkansas crude gathering system (21% of crude sla
Slide 7: Combined Asset Overview
Combined Asset Overview Delek US (Dec. 31, 2010) Lion Oil Assets Delek US (Post-Transaction) Refining Segment Marketing Segment Other 1 refinery, Tyler, TX PADD III 60,000 BPD 9.4 complexity High conversion 3 company-owned terminals 7 product pipelines Crude pipelines 412 retail company operated ret
Slide 8: Combined Asset Map
Combined Asset Map 8 West Texas Crude Louisiana Offshore Crude Foreign Crude Tyler Refinery El Dorado Refinery Delek US Terminals Lion Oil Terminals Crude Pipelines Product Pipelines
Slide 9: Key Strategic Opportunities
Key Strategic Opportunities 9 Optimize Crude Slate Increased access to wide range of domestic, offshore & foreign crude oils Adding capability to process medium sour crudes Access to crudes priced on both a WTI and Brent-basis Enhance Production Capabilities More than doubles production capacity abo
Slide 10: Crude Supply and Processing
Crude Supply and Processing SECTION TWO
Slide 11: El Dorado Crude Slate
El Dorado Crude Slate 11 Access to Domestic, Local Offshore and Foreign Crudes Local Arkansas Crudes(1) ~21% of crude slate (2010) - WTI-Linked Crudes Arkansas crude purchased at avg. discount to WTI of $8.12/bbl (2010) Delivered into 4 gathering stations and the refinery Local crude gathering syste
Slide 12: Transaction Expected To Diversify Delek US' Crude Slate
Transaction Expected To Diversify Delek US' Crude Slate 12 Balanced Exposure - Less Dependence on Light, Sweet Crude Pricing Essentially 50/50 (Sour-intermediate vs. Light) Crude Slate Becomes More Balanced Crude Slate Transition - Pre/Post Transaction Tyler Refinery El Dorado Refinery Pro-Forma (Co
Slide 13: Production
Production SECTION THREE
Slide 14: El Dorado Unit Capacities
El Dorado Unit Capacities 14 Unit Description Present Capacity (BPD)
Slide 15: Measuring Refinery Complexity
Measuring Refinery Complexity 15 Tyler and El Dorado Are Both Moderate Complexity Assets(1) (1) Stancil & Company, Oil & Gas Journal, Company Reports (CHART)
Slide 16: El Dorado Capacity Utilization Above 90% In 2010
El Dorado Capacity Utilization Above 90% In 2010 16 (1) 2010 assumes nameplate capacity of 80,000 BPD following major turnaround and expansions projects in 2009; nameplate capacity 2006-2009 is estimated at 71,500 BPD El Dorado Production Capabilities Improved After Turnaround in 2009(1) Turnaround
Slide 17: Anticipated Combined Product Slate
Anticipated Combined Product Slate(1) 17 Tyler Refinery El Dorado Refinery Pro-Forma (Combined) (1) "Other" includes LPG, Black Oil and other residual products (CHART) (CHART) (CHART)
Slide 18: Light Product Distribution
Light Product Distribution SECTION FOUR
Slide 19: Light Product Marketing Throughout the Mid-Continent
Light Product Marketing Throughout the Mid-Continent 19 Access To The Enterprise Products Pipeline(1) Integration Opportunity -- Refining Will Supply Retail Expands marketing opportunity into the Mid-Continent El Dorado will supply MAPCO store locations In Tennessee and Arkansas Tyler and El Dorado
Slide 20: Distribution "Quick Hit" Opportunities
Distribution "Quick Hit" Opportunities 20 New Operating Approach May Yield Near-Term Benefit Move Exchange Barrels From the Magellan System to Enterprise Products System Previously marketed products on Magellan system at lower netbacks than on the Enterprise system Gasoline and diesel could be sold
Slide 21: Transaction Synergies
Transaction Synergies SECTION FIVE
Slide 22: Summary of Potential Transaction Synergies
Summary of Potential Transaction Synergies 22 Crude Supply Improves crude procurement expertise Optimize crude slate between Tyler and El Dorado Distribution Realize supply synergies between refining and retail Expand wholesale marketing through Enterprise system Develop long-term product supply con
Slide 23: Capital Spending
Capital Spending SECTION SIX
Slide 24: Major Capital Projects Have Been Completed
Major Capital Projects Have Been Completed 24 *Includes refining segment only; 2009 capital spending includes cost to rebuild saturated gas plant Historical/Projected Capital Spending at Tyler and El Dorado ($MM) (CHART)
Slide 25: Transaction Financing
Transaction Financing SECTION SEVEN
Slide 26: Transaction Financing Overview
Transaction Financing Overview 26 Determined by the average closing price of Delek US' common stock as reported on the NYSE for the ten consecutive trading days immediately preceding the closing date Lion Oil will enter into five-year term loan agreements with Israeli banks in the amount of up to $1
Slide 27: Working Capital, Financing and Other
Working Capital, Financing and Other 27 Crude Supply and Inventory Financing(1) Lion will enter into a multi-year supply and off-take agreement with a major financial institution Effective financial support for crude procurement and inventory ownership Accounts Receivable Financing Lion will utilize
Slide 28: Transaction Sources and Uses
Transaction Sources and Uses 28 $45 million in restricted shares of Delek US common stock(1) $145 million for equipment and shares Transaction Sources Transaction Uses $50 million term note payable by Lion to Ergon (guaranteed by Delek US)(2) $100 million in loans from Israeli banks to Lion(3) $40 m
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