Delta Deal for Conoco Refinery Getting Closer (DAL, COP, JPM)
A couple of weeks ago there were press reports that Delta Air Lines Inc. (NYSE: DAL) was contemplating the acquisition of one of three idled Eastern US refineries, with the most likely being the 185,000 barrel/day Trainer, Pennsylvania, refinery owned…
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Delta has reportedly offered $150 million for the plant and the airlines would purchase the refinery but the supplies would be financed by JPMorgan Chase & Co. (NYSE: JPM). Morgan would sell Delta jet fuel at a wholesale rate and sell other refined markets into the market.
That sort of arrangement is probably the only thing that would make sense for Delta, which has struggled to control its fuel costs for the past couple of years. In addition to its sales, Morgan gains some traction in the New York harbor market hub and can use the refined products as hedges on the production of jet fuel and diesel fuel.
Paul Ausick
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Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.
He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.
