Holly Corporation Announces Definitive Agreement to Acquire Sinclair Oil Corporation's Tulsa Refinery

Holly Corporation Announces Definitive Agreement to Acquire Sinclair Oil
Corporation's Tulsa Refinery
Transaction to Create Highest Complexity Refinery in Midcontinent

DALLAS, Oct. 20 /PRNewswire-FirstCall/ -- Holly Corporation (NYSE: HOC)
("Holly") announced today that it has entered into a definitive agreement with
a subsidiary of Sinclair Oil Corporation ("Sinclair") to purchase Sinclair's
Tulsa refinery.

Under the terms of the agreement, Holly will purchase Sinclair's 75,000 barrel
per day (BPD) refinery located in Tulsa, Oklahoma, including its approximately
2.3 million barrels of storage, for $128.5 million comprised of $54.5 million
in cash and $74 million in Holly common stock. Holly will also purchase the
refinery's inventory of approximately 500,000 barrels at the time of closing
at market value. Holly plans to integrate this facility with its existing
85,000 BPD Tulsa refinery.

The transaction is subject to customary closing conditions as well as certain
regulatory conditions. The transaction has already completed the required
Federal Trade Commission review process.

At closing Sinclair and Holly will enter into a long-term agreement under
which Holly will provide up to 50,000 BPD of gasoline and diesel fuel to
Sinclair to supply Sinclair's extensive branded and unbranded marketing
network throughout the Midwest.

Holly anticipates funding the cash portion of the transaction and the related
inventory purchase with cash on hand, utilization of Holly's existing credit
facility, and/or proceeds from a possible private sale of debt securities.

Also today, Holly Energy Partners, L.P.(NYSE: HEP) ("HEP"), a Holly affiliated
mid-stream master limited partnership, announced that pursuant to the same
definitive agreement, it has agreed to purchase approximately 1.4 million
barrels of additional storage at Sinclair's Tulsa facility, as well as light
products, asphalt and propane loading racks and a product delivery pipeline.
In conjunction with the HEP transaction, it is anticipated that subsidiaries
of Holly and HEP will enter into a long-term contract for HEP to provide Holly
with certain storage, loading and delivery services associated with the HEP
acquired assets for certain agreed upon fees.

During the last five years Sinclair has invested over $300 million in upgrades
and other projects at its Tulsa refinery to meet current EPA low sulfur
gasoline standards and to produce 100 percent Ultra Low Sulfur Diesel
("ULSD"). In addition, Sinclair is currently in the process of completing
certain required emission reduction projects at the facility. Holly estimates
that it will be required to make an additional investment of approximately $16
million for these projects.

Holly intends to utilize existing third party pipelines and, if needed, build
new pipelines to link the Sinclair refinery and Holly's Tulsa refinery, which
are approximately two miles apart, to form a single, large, highly-complex
integrated facility. The integration will allow Holly to upgrade the gas oil
produced at Holly's existing Tulsa refinery into higher-margin gasoline and
diesel by processing the gas oil through the Sinclair refinery's Fluid
Catalytic Cracking unit. Holly will also desulfurize a portion of the diesel
produced at its Tulsa refinery by processing it through the existing diesel
desulfurizer at the Sinclair facility to produce ULSD. Initially, Holly
anticipates that approximately one-half of the diesel produced at the combined
facility will be converted to ULSD with the remainder continuing to be sold as
high sulfur diesel for railway use. Holly also plans to expend approximately
$10 million over the next two years to expand the Sinclair refinery's diesel
desulfurization capacity so that all diesel produced at the integrated complex
can be converted into ULSD. In addition, Holly expects to spend
approximately $30 million on a related project to add sulfur recovery capacity
and to add to the flare gas recovery system at its existing Tulsa refinery.

Matt Clifton, Chairman and CEO of Holly Corporation, said, "This acquisition
represents a unique synergistic opportunity to form the highest complexity
factor refining facility in the Midcontinent while substantially reducing
previously planned capital expenditures at our existing Tulsa refinery. By
operating the fully integrated complex at a combined crude oil capacity of
approximately 125,000 BPD, rather than its combined name-plated crude capacity
of 160,000 BPD, we will save approximately $110 million of previously required
regulatory capital costs versus our initial $150 million estimate. We also
expect the integrated facility will reduce expected capital expenditures for
forthcoming reduced benzene in gasoline requirements from approximately $30
million for the Holly facility alone to approximately $15 million for the
integrated complex."

"This acquisition effectively increases Holly's overall crude capacity by
40,000 BPD, eliminates a net amount of approximately $125 million of required
near term capital expenditures, and dramatically raises the complexity and
flexibility of our Tulsa operation, while providing us with the opportunity to
increase capacity at the combined Tulsa refinery through relatively modest
capital expenditures if future market conditions and economics warrant. The
transaction will also preserve Holly's high-value specialty products
production capabilities and allow for the upgrade of low value gas oil
currently produced at Holly's Tulsa facility into higher value transportation
fuels without the substantial capital expenditure that would otherwise be
required. We also believe that this transaction provides our affiliate, HEP,
with another outstanding growth opportunity. The integrated facility, like
Holly's other two refineries in the Southwest and Rocky Mountain markets, will
be a tier one competitor in the Midcontinent markets it serves. We are
confident that this is an outstanding transaction for Holly stockholders,"
Clifton concluded.

Holly has scheduled an audio webcast for today, October 20, 2009, at 10:00 AM
Eastern Time to present additional information and management comments
regarding this acquisition. Participants may listen to this webcast by using
the following web link: http://www.videonewswire.com/event.asp?id=63113

This link will be available for two weeks for webcast replay.

Holly will also post a series of presentation slides on its website with
additional detail regarding this transaction. These slides can be accessed
approximately one hour prior to the webcast, and can be accessed at
www.hollycorp.com. The slides will be posted on the Investors page, in the
Conferences & Presentations section, which can be accessed by selecting
"Investors" at the top of the home page.

About Holly Corporation
Holly Corporation, headquartered in Dallas, Texas, is an independent petroleum
refiner and marketer that produces high value light products such as gasoline,
diesel fuel and jet fuel and high value specialty lubricants. Holly operates
through its subsidiaries a 100,000 barrel per stream day ("BPSD") refinery
located in Artesia, New Mexico, an 85,000 BPSD refinery located in Tulsa,
Oklahoma, and a 31,000 BPSD refinery in Woods Cross, Utah. Also, a subsidiary
of Holly owns an approximate 41% interest (which includes a 2% general partner
interest) in Holly Energy Partners, L.P., which through subsidiaries owns or
leases approximately 2,700 miles of petroleum product and crude oil pipelines
in Texas, New Mexico, Utah and Oklahoma and tankage and refined product
terminals in several Southwest and Rocky Mountain states.

The following is a 'safe harbor' statement under the Private Securities
Litigation Reform Act of 1995: The statements in this press release relating
to matters that are not historical facts are 'forward-looking statements'
within the meaning of the federal securities laws, including, but not limited
to, statements identified by the words "anticipate," "believe," "estimate,"
"expect," "plan," "intend," "will" and "forecast," and similar expressions and
statements regarding our business strategy, plans and objectives for future
operations. These statements are based on our beliefs and assumptions using
currently available information and expectations as of the date hereof, are
not guarantees of future events or performance and involve certain risks and
uncertainties. Important factors that could cause our actual results to
differ materially from the expectations reflected in our forward looking
statements include the demand for and supply of crude oil and refined
products; the possibility of inefficiencies, curtailments or shutdowns in
refinery operations or pipelines; effects of governmental regulations and
policies; the effectiveness of our capital investments and marketing
strategies; our efficiencies in carrying out construction projects; our
ability to complete and integrate the acquisition of the Sinclair refinery;
and additional risks contained in our filings made from time to time with the
Securities and Exchange Commission. Although we believe that the expectations
reflected in these forward-looking statements are reasonable, we cannot assure
you that our expectations will prove correct. Therefore, actual outcomes and
results could materially differ from what is expressed, implied or forecast in
these statements. The forward-looking statements speak only as of the date
made and, other than as required by law, we undertake no obligation to
publicly update or revise any forward-looking statements, whether as a result
of new information, future events or otherwise.

SOURCE Holly Corporation

Bruce R. Shaw, Senior Vice President & Chief Financial Officer, or M. Neale
Hickerson, Vice President, Investor Relations, Holly Corporation/Holly Energy
Partners, +1-214-871-3555