SOURCE: Continental Refining Company

Continental Refining Company

December 14, 2011 07:30 ET

Continental Refining Company Purchases Somerset Oil Refinery; Proven Management Is Expanding Operations and Hiring in Southern Kentucky

SOMERSET, KY--(Marketwire - Dec 14, 2011) - Continental Refining Company is proud to announce the purchase of Somerset Oil Refinery. The purchase includes the acquisition of U.S. Refinery #5113 located on 93 acres in Somerset, KY along with 15 modern tanker trailers for regional transportation. A proven turnaround management team will work to remedy past mismanagement while maximizing the significant discount to market value that helped to make this purchase compelling.

New management looks forward to working with producers and the community. All current positions will remain in place and 40 jobs will be added with an estimated 200 indirect jobs created by this expansion. The facility will be operational by early summer 2012, increasing productivity from the current "warm idle" status to 61% of capacity by the end of 2012 and 100% by mid 2013. The replacement cost of the facility is $60 million.

According to Continental Refinery CEO Demetrios Haseotos, "This successful sale is the culmination of months of due diligence and energy market analysis that clearly shows why it makes sense to increase refining operations in southern Kentucky -- for the refinery, regional producers and the community. We provide a dramatic decrease in transportation costs along with favorable crude rates and faster payments to producers. At the same time we are keeping and adding 40 jobs in Somerset plus spending $10 million in upgrades over the next three years."

According to the U.S. Energy Information Administration data (EIA) in addition to the 7,200 barrels per day (bpd) of crude oil produced within a 100-mile radius of Continental Refining, the company will have access to the 45,000 bpd in neighboring oil producing states. This transportation advantage to Kentucky oil producers is strengthened by the fact that the other closest two refineries are at least 170 miles away over mountainous terrain. To ensure ample supply, Continental Refinery will be receiving crude oil by truck, rail, pipeline and barge.

The terms of the transaction are private. For additional information please visit www.continentalrefiningco.com.