OILTANKING PARTNERS, L.P. (OILT) SPO
|Company Name||OILTANKING PARTNERS, L.P.|
|Company Address||1100 LOUISIANA STREET, 10TH FLOOR
HOUSTON, TX 77002
|Employees (as of 3/7/2013)||0|
|State of Inc||DE|
|Fiscal Year End||12/31|
|Exchange||New York Stock Exchange|
|Shares Over Alloted||0|
|Shareholder Shares Offered||--|
|Lockup Period (days)||180|
|Quiet Period Expiration||12/30/2013|
We expect to receive net proceeds of approximately $ million from the sale of 2,600,000 common units offered by us pursuant to this prospectus supplement, including our general partner’s proportionate capital contribution to maintain its 2% general partner interest in us, after deducting underwriting discounts and commissions and estimated offering expenses payable by us. If the underwriters exercise in full their option to purchase additional common units from us, we will receive additional net proceeds of approximately $ million. We intend to use the net proceeds from this offering, including any net proceeds from the underwriters’ exercise of their option to purchase additional common units from us, to reduce indebtedness outstanding under our revolving credit facility with OT Finance, fund ongoing expansion projects and for general partnership purposes. At September 30, 2013, we had $42.0 million of outstanding borrowings under our revolving credit facility with OT Finance at a weighted average interest rate of 2.18% per annum. We used borrowings from our revolving credit facility with OT Finance to fund ongoing expansion projects and other capital expenditures and for general partnership purposes. Our revolving credit facility with OT Finance matures on November 30, 2017.
Many major energy and chemical companies own extensive terminal storage facilities. Although such terminals often have the same capabilities as terminals owned by independent operators, they generally do not provide terminaling services to third parties. In many instances, major energy and chemical companies that own storage and terminaling facilities are also significant customers of independent terminal operators. Such companies typically have strong demand for terminals owned by independent operators when independent terminals have more cost-effective locations near key transportation links, such as deep-water ports. Major energy and chemical companies also need independent terminal storage when their own storage facilities are inadequate, either because of size constraints, the nature of the stored material or specialized handling requirements. Independent terminal owners generally compete on the basis of the location and versatility of terminals, service and price. A favorably located terminal will have access to various cost-effective transportation modes, both to and from the terminal. Transportation modes typically include waterways, railroads, roadways and pipelines. Terminals located near deep-water port facilities are referred to as “deep-water terminals” and terminals without such facilities are referred to as “inland terminals,” although some inland facilities located on navigable waterways are serviced by barges. Terminal versatility is a function of the operator’s ability to offer complex handling requirements for diverse products. The services typically provided by the terminal include, among other things, the safe storage of the product at specified temperature, moisture and other conditions, as well as receipt at and delivery from the terminal, all of which must be in compliance with applicable environmental regulations. A terminal operator’s ability to obtain attractive pricing is often dependent on the quality, versatility and reputation of the facilities owned by the operator. Although many products require modest terminal modification, operators with versatile storage capabilities typically require less modification prior to usage, ultimately making the storage cost to the customer more attractive. We face significant competition from a variety of international, national and regional energy companies, including large, diversified midstream partnerships, global terminal operators and large multi-national energy companies of varying sizes, financial resources and experience. We believe that we are favorably positioned to compete in the industry due to the strategic location of our terminals in the Gulf Coast, their integration with area refineries, our reputation, our efficiency in docking incoming vessels on our waterfront, the prices we charge for our services and the connectivity, quality and versatility of our services. The competitiveness of our service offerings could be significantly impacted by the entry of new competitors into the markets in which our Houston and Beaumont terminals operate and serve. We believe, however, that significant barriers to entry exist in the crude oil and refined products terminaling and storage business, particularly for marine terminals and distribution assets. These barriers include significant costs and execution risk, a lengthy permitting and development cycle, financing challenges, shortage of personnel with the requisite expertise and the finite number of sites suitable for development.
We are a growth-oriented Delaware limited partnership formed in March 2011 to engage in the terminaling, storage and transportation of crude oil, refined petroleum products and liquefied petroleum gas, or LPG. We are focused on growing our business through the acquisition, ownership and operation
of terminaling, storage, pipeline and other midstream assets that generate stable cash flows. Within the energy industry, storage and terminaling services are the critical logistical midstream link between the exploration and production sector and the refining sector. The owner of our general partner is Oiltanking Holding Americas, Inc., a wholly owned subsidiary of Oiltanking GmbH, one of the world’s leading independent storage providers for crude oil, refined products, liquid chemicals and gases. Through our wholly owned subsidiaries, Oiltanking Houston, L.P. and Oiltanking Beaumont Partners, L.P., we own and operate crude oil and refined petroleum products storage and terminaling assets located along the Texas Gulf Coast on the Houston Ship Channel and in Beaumont, Texas. Our Houston terminal serves as a regional hub for crude oil and other feedstocks for refineries and petrochemical facilities located in the Gulf Coast region and also serves as an important import and export facility for LPGs and other refined petroleum products. Our Houston facility had an aggregate active storage capacity of approximately 14.4 million barrels at September 30, 2013 and provides integrated terminaling services to a variety of customers, including major integrated oil companies, distributors, marketers and chemical and petrochemical companies. Our Beaumont terminal serves as a regional hub for refined petroleum products for refineries located in the Gulf Coast region. Our Beaumont facility had an aggregate active storage capacity of approximately 5.6 million barrels at September 30, 2013 and provides integrated terminaling services to a variety of customers, including major integrated oil companies, distributors, marketers and chemical and petrochemical companies. --- Our principal executive offices are located at Three Allen Center, 333 Clay Street, Suite 2400, Houston, Texas 77002, and our telephone number is (281) 457-7900. We maintain a website at www.oiltankingpartners.com.
|Auditor||BDO USA, LLP|
|Company Counsel||Vinson & Elkins L.L.P|
|Company Counsel||Vinson & Elkins L.L.P.|
|Lead Underwriter||Barclays Capital Inc|
|Lead Underwriter||Citigroup Global Markets Inc|
|Transfer Agent||American Stock Transfer & Trust Company, LLC|
|Underwriter||Deutsche Bank Securities Inc|
|Underwriter||Deutsche Bank Securities Inc.|
|Underwriter||Goldman, Sachs & Co|
|Underwriter||Goldman, Sachs & Co.|
|Underwriter||J.P. Morgan Securities LLC|
|Underwriter||RBC Capital Markets, LLC|
|Underwriter||USCA Securities LLC|
|Underwriter||Wells Fargo Securities, LLC|
|Underwriter Counsel||Latham & Watkins LLP|
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