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20-10-2014

Tesoro Corporation creates full-service logistics company

Tesoro Corporation today announced that its affiliate, Tesoro Logistics LP has executed a definitive agreement to acquire QEP Resources, Inc.'s wholly owned natural gas gathering and processing business, QEP Field Services, LLC, including its 58% partnership interests in QEP Midstream Partners, LP. In conjunction with the transaction, Tesoro has committed to investing $350 million in TLLP common units as well as maintaining its 2% general partner interest. The investment is expected to generate significant value through Tesoro's ownership interests in TLLP.
 
"This is another transformational acquisition for Tesoro and TLLP, which enables our logistics company to offer a full-suite of services to third-party customers and enhances the growth of our midstream operations," said Greg Goff, President and CEO of Tesoro. "This acquisition advances our distinctive strategy to build a customer-focused logistics business, broadening our capabilities across the value chain to deliver enhanced shareholder value."

The acquisition, valued at approximately $2.5 billion, including approximately $230 million to refinance QEPM's debt, provides TLLP access to strategically located, high-quality assets that provide product and service diversification within our geographic footprint. The transaction is anticipated to close in the fourth quarter of 2014, and is subject to regulatory approval. It is expected to be accretive to TLLP unitholder distributions in the first year, which will continue to drive Tesoro shareholder value through its interests in the Partnership.

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