On May 31, 2024, Par Hawaii Refining, LLC (“PHR“), our wholly owned subsidiary, entered into an inventory intermediation agreement with Citigroup Energy Inc. (“Citi”) (the “Inventory Intermediation Agreement”) to support our Hawaii refining operations. Pursuant to the Inventory Intermediation Agreement, Citi will finance and hold title to crude oil in storage tanks and certain crude oil in transit to be consumed by PHR’s refinery located in Kapolei, Hawaii (the “Hawaii Refinery”). In connection with the Inventory Intermediation Agreement, Citi will enter into certain hedging transactions, in each case, on terms and subject to conditions set forth in the Inventory Intermediation Agreement. The net cash proceeds of $203.1 million, presented as Proceeds from inventory financing agreements in our consolidated statement of cash flows, were used to settle a portion of PHR’s outstanding obligations under the prior J. Aron intermediation agreement.

Upon entry into the Inventory Intermediation Agreement, Citi purchased from PHR all the crude oil held in its Hawaii storage tanks. Though title resides with Citi, the Inventory Intermediation Agreement is accounted for similar to a product financing arrangement and the crude oil inventories will continue to be included in our consolidated balance sheets until processed and sold to a third party. Monthly, we record a liability in an amount equal to the amount we expect to pay to repurchase the inventory held by Citi as, following expiration or termination of the Inventory Intermediation Agreement, we are obligated to purchase the crude oil then-owned by Citi at then-current market prices.

The Inventory Intermediation Agreement has a term of three years with a one-year extension option upon mutual agreement. Par Petroleum, LLC, a wholly owned subsidiary, guarantees PHR’s obligations under the Inventory Intermediation Agreement and certain other related agreements pursuant to an unsecured guaranty. In connection with the Inventory Intermediation Agreement, on May 31, 2024, PHR entered into a pledge and security agreement with Citi, which grants Citi a security interest on certain collateral to secure the obligations of PHR under the Inventory Intermediation Agreement.

The Inventory Intermediation Agreement also requires PHR to comply with certain covenants that restrict PHR’s ability to take certain actions, including certain limitations on PHR’s ability to incur debt and grant liens.

Prior to May 31, 2024, we were a party to the Supply and Offtake Agreement with J. Aron to support our Hawaii refining operations. Under the Supply and Offtake Agreement, we paid or received certain fees from J. Aron based on changes in crude oil market prices over time. Though title to the crude oil and certain refined product inventories resided with J. Aron, the Supply and Offtake Agreement was accounted for similar to a product financing arrangement; therefore, the crude oil and refined products inventories continued to be included in our consolidated balance sheets until processed and sold to a third party. Each reporting period, we recorded a liability in an amount equal to the amount we expected to pay to repurchase the inventory held by J. Aron based on then-current market prices.

Prior to May 31, 2024, a discretionary draw facility (the “Discretionary Draw Facility”) was available to PHR up to but excluding the expiration date. Under the Discretionary Draw Facility, J. Aron agreed to make advances to PHR from time to time at the request of PHR, subject to the satisfaction of certain conditions precedent, in an aggregate principal amount at any one time outstanding not to exceed the lesser of $165 million or the sum of the borrowing base, which was calculated as (x) 85% of the eligible accounts receivables, plus (y) the lesser of $82.5 million and 85% of eligible hydrocarbon inventory, minus (z) such reserves as established by J. Aron in respect of eligible receivables and eligible hydrocarbon inventory. The Discretionary Draw Facility bore interest at a rate equal to LIBOR (or LIBOR equivalent) plus an applicable spread between 3.50% and 4.00% to be determined annually based on certain financial ratios. We also paid a discretionary draw availability fee equal to 0.75% of the unused capacity under the Discretionary Draw Facility.

On May 31, 2024, the Supply and Offtake Agreement expired, the J. Aron Discretionary Draw Facility was terminated, and we entered into the Inventory Intermediation Agreement. We paid $382.1 million and $60.9 million to settle our J. Aron obligation and Discretionary Draw Facility remaining obligations, respectively. These payments are presented within Payments for termination of inventory financing agreements and Net borrowings (repayments) of deferred payment arrangements and receivable advances in our consolidated statement of cash flows. In connection with the termination of the Supply and Offtake Agreement, we recognized termination costs of $0.2 million, which are recorded in Debt extinguishment and commitment costs on our consolidated statements of operations for the year ended December 31, 2024. As of December 31, 2024, there were no outstanding obligations under the Supply and Offtake Agreement.

Prior to May 31, 2024, under the Supply and Offtake Agreement, we paid or received certain fees from J. Aron based on then-changes in market prices over time. In 2022, we entered into multiple contracts to fix certain market fees for the month of March 2022 for $4.5 million. For the years ended December 31, 2024, and 2023, we did not enter into any contracts to fix market fees related to our Supply and Offtake Agreement. The amount due to or from J. Aron was recorded as an adjustment to our Obligations under inventory financing agreements as allowed under the Supply and Offtake Agreement. We recognized fixed market fees of $8.8 million for the years ended December 31, 2022, which were included in Cost of revenues (excluding depreciation) on our consolidated statements of operations. We did not recognize any fixed market fees due for the years ended December 31, 2024, and 2023.

On July 26, 2023, PHR, as borrower, the lenders and letter of credit issuing banks party thereto (collectively, the “LC Facility Lenders”), MUFG Bank, Ltd., as administrative agent (the “LC Facility Agent”), sub-collateral agent, joint lead arranger and sole bookrunner, Macquarie Bank Limited, as joint lead arranger, and U.S. Bank Trust Company, National Association, as collateral agent (the “Collateral Agent”), entered into an Uncommitted Credit Agreement (the “LC Facility Agreement”) whereby the LC Facility Lenders agreed, on an uncommitted and absolutely discretionary basis, to consider making revolving credit loans and issuing and participating in letters of credit in the maximum available amount of $120.0 million in the aggregate (the “LC Facility”) with the right to request an increase up to $350.0 million in the aggregate, subject to certain conditions. Letters of credit issued under the LC Facility were intended to finance and provide credit support for certain of PHR’s purchases of crude oil.

The LC Facility was early terminated on May 31, 2024, in connection with the termination of the Supply and Offtake Agreement and entry into the Inventory Intermediation Agreement. In connection with the termination of the LC Facility, we recognized debt extinguishment costs of $0.6 million, which are included in Debt extinguishment and commitment costs on our consolidated statements of operations for the year ended December 31, 2024. We did not have any outstanding borrowings under the LC Facility as of the termination date.

The revolving credit loans under the LC Facility bore interest at a (1) SOFR rate plus the applicable margin of 2.5%, (2) cost of funds rate plus applicable margin of 2.5% or (3) alternate base rate plus 1.5%, as more particularly described in the LC Facility Agreement.

PHR had agreed to pay certain fees and commissions with respect to letters of credit under the LC Facility, including, but not limited to, a letter of credit commission, in an amount equal to the greater of $750 (in dollars) and (1) 2.00% per annum of the face amount of any trade letter of credit, or (2) 2.25% per annum of the face amount of any performance letter of credit, each payable monthly in arrears. In addition, PHR paid a fronting fee equal to 0.25% of the face amount of each letter of credit issued by a letter of credit issuing bank, payable monthly in arrears.

Prior to December 31, 2023, we were a party to the Washington Refinery Intermediation Agreement with MLC, which provided a structured financing arrangement based on U.S. Oil’s crude oil and refined products inventories and associated accounts receivable. Under this arrangement, U.S. Oil purchased crude oil supplied from third-party suppliers and MLC provided credit support for such crude oil purchases. MLC’s credit support consisted of either providing a payment guaranty, causing the issuance of a letter of credit from a third-party issuing bank, or purchasing crude oil directly from third parties on our behalf. U.S. Oil held title to all crude oil and refined products inventories at all times and pledged such inventories, together with all receivables arising from the sales of the same, exclusively to MLC.

On October 4, 2023, U.S. Oil entered into a wind-down and termination agreement (the “Wind-Down Agreement”) with MLC, which provided for the wind down of the respective obligations of MLC and U.S. Oil. Under the Wind-Down Agreement, in exchange for cash collateral provided by U.S. Oil to MLC, the payment of certain fees by U.S. Oil to MLC, and the satisfaction of other conditions precedent specified in the Wind-Down Agreement, MLC released all of its liens and security

interests in all collateral, and MLC and U.S. Oil terminated the First Lien ISDA Agreement, Collateral Agreement, and all other guarantee and collateral documents, other than certain surviving obligations and certain other obligations which specifically continue under the terms of the Wind-Down Agreement. In connection with the Wind-Down Agreement, we recognized termination fees of $1.5 million, which were recorded in Debt extinguishment and commitment costs on our consolidated statement of operations for the year ended December 31, 2023. The cash paid to settle the obligation is included in Payments for termination of inventory financing agreements in our consolidated statements of cash flows for the year ended December 31, 2023. As of December 31, 2024, and 2023, there were no outstanding obligations under the Washington Refinery Intermediation Agreement.


	December 31,
	2024		2023
Discretionary Draw Facility
Outstanding borrowings (1)	$	—	$	165,459
Borrowing capacity	—		175,891



LC Facility due 2024
Outstanding borrowings	—		—
Borrowing capacity	—		120,000



LC Facility issued letters of credit	—		13,000

(1)Borrowings outstanding under the Discretionary Draw Facility were included in Obligations under inventory financing agreements on our consolidated balance sheets. Changes in the borrowings outstanding under these arrangements were included within Cash flows from financing activities on our consolidated statements of cash flows.

The following table summarizes the inventory intermediation fees, which are included in Cost of revenues (excluding depreciation) on our consolidated statements of operations, and Interest expense and financing costs, net related to the intermediation agreements (in thousands):


	Year Ended December 31,
	2024		2023		2022
Net fees and expenses:
Inventory Intermediation Agreement
Inventory intermediation fees (1)	$	17,480	$	—	$	—
Interest expense and financing costs, net	775		—		—
Supply and Offtake Agreement
Inventory intermediation fees (1)	30,918		56,164		100,610
Interest expense and financing costs, net	2,872		7,149		6,150
Washington Refinery Intermediation Agreement
Inventory intermediation fees	—		2,250		3,000
Interest expense and financing costs, net	—		9,280		10,111
LC Facility due 2024

Interest expense and financing costs, net	1,142		1,667		—

(1)Inventory intermediation fees under the Inventory Intermediation Agreement include market structure fees of $11.8 million for the year ended December 31, 2024. Inventory intermediation fees under the Supply and Offtake Agreement include market structure fees of $13.5 million, $13.5 million, and $63.3 million for the years ended December 31, 2024, 2023, and 2022, respectively.

Prior to termination, the Supply and Offtake Agreement and the Washington Refinery Intermediation Agreement also provided us with the ability to economically hedge price risk on our inventories and crude oil purchases. Please read Note 15—Derivatives for further information.