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Delek US Holdings, Inc. (NYSE: DK) is a diversified downstream energy company that operates through three main business segments: petroleum refining, marketing & supply, and retail. Headquartered in Brentwood, Tennessee, Delek US Holdings' refining segment operates a 60,000 barrel-per-day refinery in Tyler, Texas, known for its high conversion and moderate complexity refining capabilities. This refinery plays a crucial role in producing various petroleum products for transportation and industrial markets in the United States.
The marketing & supply segment of Delek US Holdings is involved in the transportation and wholesale distribution of refined products throughout West Texas, utilizing both company-owned and third-party operated terminals. This segment ensures the efficient delivery of products such as gasoline, diesel, and other refined goods to various markets.
Delek US Holdings also boasts an extensive retail network, operating more than 450 company-owned fuel and convenience stores across eight states. The retail segment markets gasoline and diesel through various regional brands including Mapco Express®, Mapco Mart® East Coast®, Discount Food Mart™, Fast Food and Fuel™, and Favorite Markets®.
Additionally, Delek US Holdings has a logistics segment that focuses on gathering, transporting, and storing crude oil and intermediate products. This segment is crucial for the company's operations as it supports the refining and marketing activities by ensuring a seamless supply chain for crude oil and refined products.
Recent developments highlight Delek US Holdings' dynamic growth strategy. The company, through its subsidiary Delek Logistics Partners, LP (NYSE: DKL), has been active in the financial markets, recently pricing an upsized offering of $650 million in senior notes and commencing a $120 million public offering of common units. The proceeds from these offerings are earmarked for repurchases, repayments, and general corporate purposes.
Delek US Holdings demonstrates a robust financial and operational framework, bolstered by strategic partnerships and a diversified product portfolio. The company's focus on refining, logistics, and retail ensures a comprehensive energy supply chain, catering to both wholesale and retail markets. As an integrated energy business, Delek US Holdings continues to strengthen its market position through strategic investments and a commitment to operational excellence.
Delek Logistics Partners, LP (NYSE: DKL) has closed the acquisition of H2O Midstream, a portfolio company of EIV Capital, , for a total consideration of $230 million. The deal includes $160 million in cash and $70 million of convertible preferred redeemable equity. H2O Midstream provides water-related services in the Midland Basin, Texas, including gathering, transportation, recycling, storage, and disposal.
This acquisition aligns with Delek Logistics' strategy to offer comprehensive midstream solutions in the Permian Basin. The company expects to leverage synergies through cost optimization and cross-product sales, as H2O Midstream's operations significantly overlap with Delek's existing Midland, Texas operations.
Delek US Holdings (NYSE: DK) has announced a significant increase in its share repurchase authorization. The company's Board of Directors approved a $400 million increase, bringing the total available for repurchases to approximately $562 million. This move underscores Delek's commitment to generating value for shareholders and delivering increased cash returns.
Avigal Soreq, President and CEO of Delek US, emphasized the company's view that there is substantial value in its equity. Subject to market conditions, Delek plans to continue using share buybacks as a means to return incremental value to shareholders. This enhanced authorization reflects the company's confidence in its financial position and future prospects.
Delek Logistics Partners, LP (NYSE: DKL) has priced an upsized offering of $200 million in additional 8.625% senior notes due 2029. The offering, initially announced at $100 million, was increased and priced at 103.250% of face value. These Additional Notes will be part of the same series as the $850 million in Existing Notes issued earlier in 2024. The offering is expected to close on August 16, 2024, subject to customary conditions.
Delek Logistics plans to use the net proceeds to repay a portion of its revolving credit facility. The Additional Notes are being offered only to qualified institutional buyers and non-U.S. persons, and have not been registered under the Securities Act, limiting their sale and transfer.
Delek Logistics Partners, LP (NYSE: DKL) has announced a proposed offering of $100 million in additional 8.625% senior notes due 2029. These Additional Notes will be issued under the same indenture as the existing $850 million in aggregate principal amount of 8.625% senior notes due 2029. The offering is subject to market conditions and will be made to eligible purchasers in a private placement.
The company intends to use the net proceeds from this offering to repay a portion of the outstanding borrowings under its revolving credit facility. The Additional Notes will only be offered to qualified institutional buyers and non-U.S. persons outside the United States, in compliance with Rule 144A and Regulation S under the Securities Act, respectively.
Delek US Holdings (NYSE: DK) reported a net loss of $37.2 million or $(0.58) per share for Q2 2024, with an adjusted net loss of $59.3 million or $(0.92) per share. The company's adjusted EBITDA was $107.5 million. Key developments include:
1. Agreement to sell retail assets for $385 million
2. 10-year fuel supply agreement with FEMSA
3. Amended and extended intercompany contracts with Delek Logistics (DKL)
4. Dropped down Wink to Webster pipeline interest to DKL
5. DKL acquired H2O Midstream and announced a new gas processing plant
The company's refining segment saw a decrease in Adjusted EBITDA, while the logistics segment improved. Delek US increased its quarterly dividend to $0.255 per share.
FEMSA and Delek US Holdings have signed a definitive agreement for FEMSA to acquire 100% of Delek's retail business for $385 million. The transaction includes 249 corporate stores operating under the DK brand, primarily in Texas and New Mexico. This marks FEMSA's entry into the US convenience and mobility industry, expanding its global retail operations. For Delek, this sale aligns with their strategy to unlock value for stakeholders and gain a competitive partner for ongoing retail fuel sales. The deal is expected to close in late Q3 or Q4 2024.
FEMSA, a Mexican conglomerate, operates over 22,800 OXXO stores across 5 countries. Delek US Holdings is a diversified downstream energy company with assets in refining, logistics, pipelines, renewable fuels, and convenience store retailing.
Delek US Holdings, Inc. (DK) has announced a $0.005 increase in its regular quarterly dividend to $0.255 per share. The dividend will be paid on August 19, 2024, to shareholders of record on August 12, 2024. Delek US is a diversified downstream energy company with assets in petroleum refining, logistics, pipelines, renewable fuels, and convenience store retailing. The company operates refineries in Texas, Arkansas, and Louisiana with a combined nameplate crude throughput capacity of 302,000 barrels per day. Delek US also has an ownership interest in the 650-mile Wink to Webster long-haul crude oil pipeline and operates approximately 250 convenience stores in West Texas and New Mexico. Additionally, Delek US owns about 72.6% of Delek Logistics Partners, LP (NYSE: DKL) as of June 30, 2024.
Delek Logistics Partners, LP (NYSE: DKL) has announced its quarterly cash distribution for the second quarter of 2024. The company will distribute $1.09 per common partner unit, which equates to $4.36 per unit on an annualized basis. This distribution is set to be paid on August 16, 2024, to unitholders of record as of August 9, 2024. This announcement represents an increase in the company's quarterly cash distribution, demonstrating Delek Logistics' commitment to delivering value to its unitholders.
Delek US Holdings (NYSE: DK) has scheduled a conference call to discuss its second quarter 2024 results on August 6, 2024. The press release summarizing the results will be issued before the U.S. stock market opens. Scheduled to start at 11:00 a.m. CT (12:00 p.m. ET), the conference call will be accessible live online through the company's investor relations section on their website. An online replay will also be available for 90 days.
Delek Logistics Partners (NYSE: DKL) will release its second quarter 2024 financial results before the U.S. stock market opens on August 6, 2024. The company will host a conference call to discuss these results on the same day at 12:30 p.m. CT (1:30 p.m. ET). Interested parties can access the live broadcast and subsequent 90-day replay online at the company's website, www.DelekLogistics.com, under the webcasts section.
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