Valero Energy Partners LP Announces First Asset Acquisition

SAN ANTONIO, June 17, 2014 /PRNewswire/ -- Valero Energy Partners LP (NYSE: VLP, the Partnership), today announced that it has approved the acquisition from certain subsidiaries of Valero Energy Corporation (NYSE: VLO, Valero) of the McKee Crude System, Three Rivers Crude System, and Wynnewood Products System for total consideration of $154 million.  The drop-down transaction is expected to close on July 1, 2014 and to be funded with the Partnership's cash on hand.

"This acquisition is our first step in executing our growth strategy and is consistent with previously communicated growth plans," said Joe Gorder, Chairman and Chief Executive Officer. 

The assets to be acquired include: 

• The McKee Crude System, located in Sunray, Texas, which has 72,000 barrels per day of throughput capacity and supplies approximately 40 percent of the crude oil processed at Valero's McKee refinery. The system consists of more than 200 miles of pipelines, 20 crude oil truck unloading sites with lease automatic custody transfer units, and approximately 240,000 barrels of storage capacity.
• The Three Rivers Crude System, located in the Eagle Ford shale region in South Texas, consisting of 11 crude oil truck unloading sites with lease automatic custody transfer units and a 1-mile, 12-inch pipeline with a capacity of 110,000 barrels per day that delivers crude oil to tanks at Valero's Three Rivers refinery. The system also receives locally produced crude oil via connections to the Harvest Arrowhead pipeline system and the Plains Gardendale pipeline for processing at the Three Rivers refinery or for shipment through third-party pipelines to Valero's two refineries in Corpus Christi, Texas.
• The Wynnewood Products System, located in Ardmore, Oklahoma, consisting of a 30-mile, 12-inch refined petroleum products pipeline with 90,000 barrels per day of capacity and two tanks with a total of 180,000 barrels of storage capacity. The system connects Valero's Ardmore refinery to the Magellan refined products pipeline system and is the primary distribution outlet for the refinery.

Upon closing, the Partnership plans to enter into 10-year term transportation and terminaling agreements with subsidiaries of Valero.  These agreements are expected to contain minimum throughput volume commitments that account for approximately 90 percent of expected throughput volumes.  The to-be acquired assets are expected to contribute approximately $15.4 million of EBITDA in their first full year of operation. 

The terms of the transaction were approved, subject to the execution of definitive documentation, by the Board of Directors of the general partner of the Partnership, following the approval and recommendation of its conflicts committee, which is composed of independent directors and was advised by Simmons & Company International, its financial advisor, and Akin Gump Straus Hauer & Feld LLP, its legal counsel. For more information about the assets involved in this transaction, visit www.valeroenergypartners.com. 

About Valero Energy Partners LP
Valero Energy Partners LP is a fee-based, growth-oriented, traditional master limited partnership formed by Valero Energy Corporation to own, operate, develop, and acquire crude oil and refined petroleum products pipelines, terminals, and other transportation and logistics assets. With headquarters in San Antonio, the Partnership's assets include crude oil and refined petroleum products pipeline and terminal systems in the Gulf Coast and Mid-Continent regions of the United States that are integral to the operations of several of Valero's refineries.

Contacts
Investors: 
John Locke, Executive Director – Investor Relations, 210-345-3077
Karen Ngo, Manager – Investor Relations, 210-345-4574

Media: 
Bill Day, Vice President – Communications, 210-345-2928

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Safe-Harbor Statement
This release contains forward-looking statements within the meaning of federal securities laws. These statements discuss future expectations, contain projections of results of operations or of financial condition or state other forward-looking information. You can identify forward-looking statements by words such as "anticipate," "believe," "estimate," "expect," "forecast," "project," "could," "may," "should," "would," "will" or other similar expressions that convey the uncertainty of future events or outcomes. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the Partnership's control and are difficult to predict. These statements are often based upon various assumptions, many of which are based, in turn, upon further assumptions, including examination of historical operating trends made by the management of the Partnership. Although the Partnership believes that these assumptions were reasonable when made, because assumptions are inherently subject to significant uncertainties and contingencies, which are difficult or impossible to predict and are beyond its control, the Partnership cannot give assurance that it will achieve or accomplish these expectations, beliefs or intentions. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements contained in the Partnership's filings with the U.S. Securities and Exchange Commission, including the Form S-1 and prospectus relating to the initial public offering of the Partnership's common units and the Partnership's annual report on Form 10-K for the year ended December 31, 2013. These risks could cause the Partnership's actual results to differ materially from those contained in any forward-looking statement.

Use of Non-GAAP Financial Information: We define EBITDA as net income before income tax expense, interest expense, and depreciation expense. EBITDA is a supplemental financial measure that is not defined under U.S. generally accepted accounting principles (GAAP). We believe that the presentation of EBITDA provides useful information to investors in assessing our financial condition and results of operations. The GAAP measure most directly comparable to EBITDA is net income. EBITDA should not be considered an alternative to net income in accordance with GAAP. EBITDA has important limitations as an analytical tool because it excludes some, but not all, items that affect net income. EBITDA should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Additionally, because EBITDA may be defined differently by other companies in our industry, our definition of EBITDA may not be comparable to similarly titled measures of other companies, thereby diminishing its utility.

SOURCE Valero Energy Partners LP