Tesoro (NYSE:TSO) Raising $200 Million in IPO

In a move following other energy companies which have separated pipeline assets into a limited partnership via an IPO, Tesoro (NYSE:TSO) is engaging in the same, with expectations of raising $200 million in an IPO.

How it will work is Tesoro will form a limited partnership where they'll sell a minority stake in to investors.

The new entity will hold crude oil assets in the Williston Basin area and Bakken Shale. Also included will be a crude-oil and products-storage facility, along with eight refined-products terminals.

Saying in a webcast with analysts that separating the refining business from storage, pipelines and terminals will generate "a platform for growth," the new company will increase profits primarily by focusing on a variety of cost-cutting measures, including cutting overhead and operating costs, while producing higher-margin fuel.

Tesoro closed at $17.12, down $0.30, or 1.72 percent.