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Refining and Logistics Equity Investments
 6 Months Ended
Jun. 30, 2024
Equity Method Investments and Joint Ventures [Abstract]  
Refining and Logistics Equity Investments Refining and Logistics Equity Investments
Yellowstone Energy Limited Partnership
On June 1, 2023, we completed the Billings Acquisition and acquired a 65% limited partnership ownership interest in YELP. YELP owns a cogeneration facility in Billings, Montana that converts petroleum coke, supplied from our Montana refinery and other nearby third-party refineries, into power production for the local utility grid. We account for our investment in YELP using the equity method as we have the ability to exert significant influence over, but do not control its operating and financial policies. Our proportionate share of YELP’s net income and the depreciation of our basis difference are included in Equity earnings from refining and logistics investments on our condensed consolidated statements of operations and reported as part of our refining segment. Please read Note 19—Segment Information for further information on our reporting segments. Our proportionate share of YELP’s net income (loss) is recorded on a one-month lag.
The change in our equity investment in YELP is as follows (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Beginning balance$58,676 $— $59,824 $— 
Acquisition of investment
— 58,019 — 58,019 
Equity earnings from YELP
2,290 — 6,755 — 
Depreciation of basis difference
(348)— (696)— 
Dividends received— — (5,265)— 
Ending balance$60,618 $58,019 $60,618 $58,019 
Yellowstone Pipeline Company
On June 1, 2023, we completed the Billings Acquisition and acquired a 40% ownership interest in YPLC. YPLC owns a refined products pipeline that begins at our Montana refinery and transports refined product throughout Montana and the Pacific Northwest. We account for our ownership interest in YPLC using the equity method as we have the ability to exert significant influence over, but do not control, its operating and financial policies. Our proportionate share of YPLC’s net income and the accretion of our basis difference is included in Equity earnings from refining and logistics investments on our condensed consolidated statements of operations, and reported as part of our logistics segment. Please read Note 19—Segment Information for further information on our reporting segments.
The change in our equity investment in YPLC is as follows (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Beginning balance$29,639 $— $27,662 $— 
Acquisition of investment
— 28,581 — 28,581 
Equity earnings from YPLC
1,763 425 3,702 425 
Accretion of basis difference38 — 76 — 
Basis difference adjustment— — — — 
Dividends received(3,840)(2,600)(3,840)(2,600)
Capital contribution in YPLC
— — — — 
Ending balance$27,600 $26,406 $27,600 $26,406 
Investment in Laramie Energy
As of June 30, 2024, we owned a 46.0% ownership interest in Laramie Energy, an entity focused on developing and producing natural gas in Garfield, Mesa, and Rio Blanco counties, Colorado. The balance of our investment in Laramie Energy was $16.0 million and $14.3 million as of June 30, 2024 and December 31, 2023, respectively.
On February 21, 2023, Laramie Energy entered into a new term loan agreement which provides a $205 million first lien term loan facility with $160.0 million funded at closing and an optional $45 million delayed draw commitment, subject to certain terms and conditions. Under the terms of the new term loan, Laramie is permitted to make future cash distributions to its owners, including us, subject to certain restrictions. Laramie Energy’s term loan matures on February 21, 2027. As of June 30, 2024 and December 31, 2023, the term loan had an outstanding balance of $160.0 million.
On March 1, 2023, pursuant to its new term loan agreement, Laramie Energy made a one-time cash distribution to its owners, including us, based on ownership percentage. Our share of this distribution was $10.7 million, which was reflected as Return of capital from Laramie Energy, LLC on our condensed consolidated statements of cash flows. We recorded the cash received as Equity earnings (losses) from Laramie Energy, LLC on our condensed consolidated statements of operations because the carrying value of our investment in Laramie Energy was zero at the time of such distribution. On April 29, 2024, Laramie Energy made a one-time cash distribution to its owners, including us, based on ownership percentage. Our share of this distribution was $1.5 million.
Effective February 21, 2023, and concurrent with the new term loan agreement noted above, we resumed the application of equity method accounting with respect to our investment in Laramie Energy. At June 30, 2024, our equity in the underlying net assets of Laramie Energy exceeded the carrying value of our investment by approximately $68.0 million. This difference arose primarily due to other-than-temporary impairments of our equity investment in Laramie Energy.
The change in our equity investment in Laramie Energy is as follows (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Beginning balance$18,842 $— $14,279 $— 
Equity earnings (losses) from Laramie Energy(2,975)— (26)— 
Accretion of basis difference1,615 — 3,229 — 
Dividends received(1,485)— (1,485)— 
Ending balance
$15,997 $— $15,997 $—