Hf Sinclair Corporation · NYSE:DINO
Hf Sinclair — Holly — Corporate Update (January 2005)
24 slides from Hf Sinclair's corporate update, Jan 27, 2005
Slide 1: Holly Corporation: Webcast Presentation
Holly Corporation: Webcast Presentation Refining & Marketing Initiatives 2004/2005 Major Capital Projects for 2005 Estimation of 'Mid-cycle' EBITDA January 27, 2005
Slide 2: Agenda
Agenda 2005 refining initiatives 2005 major capital projects Estimated mid-cycle EBITDA Questions & Answers
Slide 3: Disclosure Statement
Disclosure Statement Statements made during the course of this presentation that are not historical facts are "forward- looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are inherently uncertain and necessarily involve ris
Slide 4: Agenda
Agenda 2005 refining initiatives 2005 major capital projects Estimated mid-cycle EBITDA Questions & Answers
Slide 5: Previous guidance for mid-cycle EBITDA
Holly Corp's previous guidance for Mid-Cycle* EBITDA for 2004 Company operations *Mid-cycle EBITDA for the refinery operations was calculated by subtracting 2004 operating expenses excluding depreciation from mid-cycle refinery gross margin. Mid-cycle refinery gross margin was calculated by applying
Slide 6: 2005 Refining Initiatives
2005 Refining Initiatives: Increase capacity of sour grades of crude Improve refining yields Increase refinery runs
Slide 7: Increase capacity of sour grades of crude
INCREASE CAPACITY OF SOUR GRADES OF CRUDE Move from approx. 92% sour crude runs to 100% sour crude runs at Navajo Refinery. (Navajo primarily runs a West Texas Sour (WTS) 'type' of sour crude.) Increase low priced Canadian heavy sour crude at Woods Cross refinery to 8% of runs in 2005. Increase sour
Slide 8: Improve refining yields
IMPROVE REFINING YIELDS High Value Product Yield Improvement: Increase Clean Burning Gasoline (CBG) production at Navajo refining. Upgrade 5,200 bpd from 'conventional' gasoline to higher value CBG gasoline Increase Premium gasoline production Upgrade 1,000 bpd of regular gasoline to premium Increas
Slide 9: Increase refinery runs
INCREASE REFINERY RUNS Higher crude rates at all refineries. 2005 plan 1,800 bpd from all refineries Higher FCCU rates at Navajo refinery Increase gasoline & diesel production levels by buying additional gas oil from 3rd parties Increased Natural Gasoline Blending 2,100 bpd low cost natural gasoline
Slide 10: Summary of EBITDA from 2005 refinery initiatives
Summary of EBITDA from 2005 Refinery initiatives: R&M Improvement Initiative Projected EBITDA improvement (in millions) Increased capacity of sour crude feedstocks $13 Improved refining yields 8 Increased refinery runs 7 Estimated EBITDA additions $28
Slide 11: Agenda
Agenda 2005 refining initiatives 2005 major capital projects Estimated mid-cycle EBITDA Questions & Answers
Slide 12: 2005 Refinery Capital Spending Program - Major Projects
2005 Refinery Capital Spending Program-Major Projects ROSE Asphalt Unit --Navajo refinery Diesel Hydrotreater Unit --Woods Cross refinery Ultra Low Sulfur Diesel and Expansion Projects --Navajo refinery
Slide 13: ROSE Asphalt Unit - Navajo refinery
2005 Refinery Capital Spending Program-Major Projects ROSE Asphalt Unit --Navajo refinery: Project Summary: Relocate and refurbish an existing purchased ROSE unit (residuum oil supercritical extraction) to the Artesia, NM facility. Unit will have a capacity of 4,500 BPD of asphalt (feedstock) Unit w
Slide 14: Diesel Hydrotreater Unit - Woods Cross refinery
2005 Refinery Capital Spending Program-Major Projects Diesel Hydrotreater Unit --Woods Cross refinery : Project Summary: Compliance with ULSD requirements* Create infrastructure for potential 'sour up' project in future Projected cost: $33 million Estimated completion: 2nd quarter 2006 Target EBITDA
Slide 15: Ultra Low Sulfur Diesel and Expansion Projects - Navajo
2005 Refinery Capital Spending Program-Major Projects Ultra Low Sulfur Diesel and Expansion Projects --Navajo refinery: Project Summary: Compliance with ULSD requirements* 10,000 bpd expansion Projected cost: $52 million Estimated completion: 2nd quarter 2006 Target EBITDA: $12.5 million Assumption:
Slide 16: Anticipated 2005 Refinery Capital Spending
Anticipated 2005 Refinery Capital Spending Major Capital Projects Estimated Total Cost * Estimated EBITDA Addition ROSE Unit $16 $6.0 Diesel hydrotreater at Woods Cross 33 2.5 ULSD & Expansion (project approval to Board in Feb.-submittal of total) 52 12.5 Total $101 $21.0 (in millions) *Approx. half
Slide 17: Anticipated tax benefits from capital spending program
Anticipated tax benefits from capital spending program American Jobs Creation Act of 2004: Created tax incentives for small refiners to produce ULSD Provides immediate deduction of 75% of certain capital costs Provides a tax credit based on ULSD production up to 25% of these costs Expected benefits
Slide 18: Agenda
Agenda 2005 refining initiatives 2005 major capital projects Estimated mid-cycle EBITDA Questions & Answers
Slide 19: Estimate of mid-cycle EBITDA
Estimate of mid-cycle EBITDA Previous Guidance 2005 2006 2007 Refining $105 $105 $105 $105 R&M Initiatives 28 28 28 Effect of capital projects 15 21 New Refining Guidance 133 148 154 Logistics assets (HEP)* 35 35 35 35 Minority interest* <17> <17> <17> <17> Total Consolidated* $123 $151 $166 $172 *T
Slide 20: NRC Refining Margins
NRC Refining Margins Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec East 3.07 4.72 7.33 6.46 4.92 5.11 5.79 5.73 5.1 6.64 6.2 2 West 1.37 1.2 2.59 0.81 1.39 0.84 0.25 2.38 4.51 2.53 1.19 2.09 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 2.29 4.55 1.88 7.19 9.57 5.84 3.67 2.03 0.53 0.77 0.3 3.71
Slide 21: MRC Refining Margins
MRC Refining Margins Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec East 0.06 2.96 3.92 6.86 5.59 4.95 8.73 4.11 5.15 5.15 7.67 2.94 West 5.52 2.15 6.23 1.98 2.07 2.31 0.61 4.73 5.48 2.82 1.39 1.07 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 1.3 4.32 3.64 3.88 8.49 8.27 1 3.21 2.89 2.54 1.32 4.
Slide 22: Woods Cross Refining Margins
Woods Cross Refining Margins Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec East 1.64 1.21 5.56 4.32 5.75 2.73 2.87 3.93 -0.67 -0.95 4.97 0.57 West 0.2 2.16 2.85 2.97 1.23 1.94 4.56 3.68 9.59 8.01 2.3 2.43 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 2.85 0.26 2.31 3.6 4.88 3.99 0.17 2.14 1.34 3
Slide 23: Key sensitivities to EBITDA changes
Key sensitivities to EBITDA changes Sensitivity EBITDA Impact ($MM/year) Gulf Coast 3-2-1 Crack Spread, $/bbl +-1 +-38 WTI/WTS Spread, $/bbl +-1 +-27 Phoenix CBG / El Paso UNL Spread, cts/gal +-5 +-18 Navajo Asphalt / WTS Spread, $/bbl +-5 +-9 Natural Gas (Henry Hub), $/mmbtu* +-1 +-9 *negative corr
Slide 24: Agenda
Agenda 2005 refining initiatives 2005 major capital projects Estimated mid-cycle EBITDA Questions & Answers