Par Pacific Holdings, Inc. Common Stock · NYSE:PARR
Par Pacific Holdings, Inc. Common Stock — Investor Presentation (November 2018)
36 slides from Par Pacific Holdings, Inc. Common Stock's investor presentation, Nov 7, 2018
Slide 1: Investor Presentation November 2018
Investor Presentation November 2018
Slide 2: Forward-Looking Statements / Disclaimers
Forward-Looking Statements / Disclaimers The information contained in this presentation has been prepared to assist you in making your own evaluation of the company and does not purport to contain all of the information you may consider important. Any estimates or projections with respect to future
Slide 3: Our Business Platforms
Our Business Platforms Refining Hawaii (1) Wyoming . 94,000 bpd refinery . 18,000 bpd refinery . 50% distillate yield configuration . 95% light products yield . Crudes sourced globally . Tailored for Powder River Basin & Bakken crude Logistics Hawaii Wyoming . Storage capacity of 5.4 million barrels
Slide 4: Corporate Strategy
Corporate Strategy Grow Existing Acquire Similar Maintain Diverse Leverage Tax Businesses Businesses Earnings Profile Attributes . Bolt-on acquisitions . Energy and . Decrease commodity infrastructure price volatility . Selective capital business in niche projects markets . Enhance credit profile .
Slide 5: Financial Summary
Financial Summary Free Cash Flow ($MM) (1) LTM Adjusted Net Income ($MM) (2) Enterprise Value ($MM) (3) Net Debt to Total Capitalization (4) Closing Share Price $17.85 Shares Outstanding 45.9 Market Capitalization $819 Principal Amount of Debt $415 Cash $88 Net Debt $327 Total Enterprise Value $1,14
Slide 6: Business Segment Profile
Business Segment Profile Retail and Logistics contributed 45% of LTM Q3 2018 Adjusted EBITDA (1) ($ in millions) Adjusted EBITDA LTM Q3 2018 Refining $ 94 Logistics 40 Retail 37 Corporate & Other (47) Total Adjusted EBITDA $ 123 E&P diversification with 46% ownership of Laramie Energy (2) . Laramie
Slide 7: Refining Segment
rn ont ®m Par Pacific Refining Segment
Slide 8: Hawaii Refinery Asset Highlights
Hawaii Refinery Asset Highlights . Largest and most complex in-state refinery . Distillate yield configured for Hawaii demand . Asset location and configuration favorably positioned to benefit from commercial flexibility . Anticipated ability to meet environmental and regulatory requirements without
Slide 9: Acquisition of IES Crude and Vacuum Units
Acquisition of IES Crude and Vacuum Units Transaction Highlights Pro Forma Operating Metrics (Mbpd) . IES announced planned closure of refining operations in Hawaii . Par Pacific purchasing crude and vacuum process units for $45 mm in cash and stock . Par Pacific to sell products to IES, permitting
Slide 10: Hawaii Expansion Projects
Hawaii Expansion Projects $27 mm Diesel Hydrotreater (DHT) Project; expected to come online in Q3 2019 • Increases distillate production by 5-7 Mbpd with favorable economics to increase crude rates by 8-10 Mbpd • Reduces jet imports • Enables Hawaii production cost to reach the lower end of the $3.0
Slide 11: Hawaii Business Strategy
Hawaii Business Strategy At Acquisition: September 2013 60,000 BPD throughput Creative working 45,000 BPD on-island sales capital solution 35% fuel oil yield Middle East crude slate Mid Pac acquisition $5.00/bbl production cost increased on-island sales Aggressive in-state commercial strategy Improv
Slide 12: Wyoming Refinery Asset Highlights
Wyoming Refinery Asset Highlights . 18,000 bpd refinery in Newcastle, Wyoming . Complex refinery with a Nelson Complexity Index of 10.7 . Flexible product yield . Attractive light products yield over 95% during YTD 2018 YTD 2018 Crude Sourcing YTD 2018 Yield Profile (1) Asset Detail Refining Unit Ca
Slide 13: Wyoming Business Strategy
Wyoming Business Strategy Acquisition: July 2016 15,200 BPD throughput Upgrade diesel 41% distillate yield hydrotreater to increase distillate production Establish out of market commercial strategy Refined products transported by rail Added Economic and Planning group 2019 Goals: Expanded commercial
Slide 14: Logistics Segment
rn ont ®m Par Pacific Logistics Segment
Slide 15: Hawaii Logistics Asset Highlights
Hawaii Logistics Asset Highlights Hawaii Assets Map North America . Integrated system enhances flexibility and profitability . Difficult to replicate asset base . Multiple advantages from single point mooring Latin America . Increased safety and flexibility South America . Enhanced distribution capa
Slide 16: Wyoming Logistics
Wyoming Logistics Logistics Assets . 140-mile crude oil pipeline gathering system providing direct access to Powder River Basin crude . 40-mile products pipeline feeds into Magellan Products Line en route to Rapid City, South Dakota . Jet fuel terminal in Rapid City and pipeline connecting to the El
Slide 17: Retail Segment
rn ont ®m Par Pacific Retail Segment
Slide 18: Hawaii Retail Highlights
Hawaii Retail Highlights . Extensive footprint across four islands in Hawaii . Strong financial performance throughout 2017 and YTD 2018 . New location expected to open in 2019 Retail Network High real estate costs, scarcity of land, and logistics complexity strengthen competitive position 18
Slide 19: Northwest Retail
Northwest Retail Significant Presence in Niche Market • 33 Cenex® Zip Trip branded convenience stores • 21 fee-owned sites • 30 sites recently remodeled / upgraded • Strategic multi-year fuel supply and Cenex® branded agreements Asset Highlights • Second largest branded retail position in Spokane re
Slide 20: Laramie Energy
rn ont ®m Par Pacific Laramie Energy
Slide 21: Laramie Energy Asset Highlights
Laramie Energy Asset Highlights Production Profile (3) . Par Pacific owns 46% of Laramie Energy, LLC (1) . 67% of existing gas production hedged through December 2018 (2) . Southern acreage – targeting EURs of approximately 1.6 Bcfe with drilling and completion costs of approximately $0.85 MM per we
Slide 22: Appendix
rn ont ®m Par Pacific Appendix
Slide 23: Hawaii Market Fundamentals
Hawaii Market Fundamentals Refined Product Demand (1) Electricity Production by Source and Petroleum Use (2) MBbl/d Total Production Total Demand 80 70 72 61 64 60 56 51 48 40 32 24 16 8 0 Other Products Distillate Shortage of distillate capacity in Hawaii Fuel oil utilized for ~61% of electricity g
Slide 24: Clean Distillate and Fuel Oil Production in Anticipation of IMO 2020
Clean Distillate and Fuel Oil Production in Anticipation of IMO 2020 Hawaii Refinery Hawaii Refinery Wyoming Refinery Pre-IES and DHT Post-IES and DHT 5% 2% 13% 60% 72% 47% Jet Fuel, ULSD, LSFO and <0.5% HSD as % of production HSFO, HSVGO, Slurry and asphalt as % of production Based on internal esti
Slide 25: Mid Pacific Crack Spread and Crude Differential
Mid Pacific Crack Spread and Crude Differential 5YR Combined Average (1) = $8.38 ($/bbl) Mid Pacific 4.1.2.1 $6.50 $4.48 $3.96 $4.45 $7.00 $7.69 $8.35 $9.94 $7.81 $7.38 $7.71 $8.93 Mid Pacific Crude Blend -$1.75 -$2.10 -$2.04 -$2.42 -$1.48 -$1.21 -$0.61 -$0.33 -$0.02 -$0.02 -$0.42 $0.34 Combined Dif
Slide 26: Wyoming Crack Spread
Wyoming Crack Spread 4YR Average (1) = $20.68 ($/bbl) Wyoming 3.2.1 $19.03 $13.44 $18.16 $19.12 $13.69 $16.51 $21.47 $25.29 $23.79 $15.65 $24.99 $26.25 WTI $42.18 $33.45 $45.59 $44.91 $49.34 $51.93 $48.30 $48.21 $55.40 $62.89 $67.90 $69.50 ____________________ (1) Company calculation based on a roll
Slide 27: Capital Expenditures Summary
Capital Expenditures Summary . Maintenance / Annual base maintenance capital expenditures of $25-30MM Regulatory . 2018 estimates include non-recurring maintenance and regulatory capital related to Wyoming Refinery and Logistics . Distillate hydrotreater project in Hawaii accounts for $15MM of growt
Slide 28: Corporate Structure
Corporate Structure $115 MM 5% Convertible Par Pacific Holdings Inc. Notes due 6/15/2021 NYSE: PARR $85 MM ABL Revolver (1) Due 12/21/2022 Par Petroleum, LLC $300 MM 7.75% Senior Secured Notes due 12/15/2025 Hermes Consolidated, LLC Laramie Energy, LLC (2) Supply and Offtake Par Hawaii Refining, LLC
Slide 29: Laramie Energy Hedging Program
Laramie Energy Hedging Program Bal 2018 2019 Volume Price Volume Price Gas Hedges (MMbtu/day) NYMEX Henry Hub Swaps 95,345 $2.72 54,795 $2.87 NYMEX Collar 7,500 $2.90 - $3.25 - - Northwest Pipeline Swaps 13,261 $2.78 4,932 $2.78 Rockies Basis Swaps 95,345 ($0.27) 35,596 ($0.59) NGL Swaps (gal/day) E
Slide 30: Laramie Energy Reserves
Laramie Energy Reserves Year End 2017 Reserves and PV10 Summary – 100% of Laramie Energy Strip Pricing Summary Note: Par Pacific Holdings owned 42.3% of Laramie Energy, LLC as of 12/31/2017. Par Pacific Holdings currently owns 46%. Reserve information based on year end 2017 reserve report of Netherl
Slide 31: Laramie Key Statistics
Laramie Key Statistics Capital Structure at 9/30/18 (in millions) Laramie Debt Balance (1) $193.5 Laramie Preferred Stock (2) $40.8 Par Pacific Holdings ownership (3) 46.0% Par Pacific Holdings carrying value $131.5 September Exit Production (MMcfe/d) 215.1 2018 Estimated Exit Production (MMcfe/d) (
Slide 32: Laramie Energy Adjusted EBITDAX
Laramie Energy Adjusted EBITDAX (1) Three Months Ended $ in thousands September 30, September 30, 2018 2017 Net (loss) income $ (151) $ (1,838) Commodity derivative gains 3,132 (945) (Gain) loss on settled derivative instruments 115 (1,413) Interest expense and loan fees 2,550 1,812 Non-cash preferr
Slide 33: Non-GAAP PV10 and PV20 Disclosure
Non-GAAP PV10 and PV20 Disclosure Non-GAAP PV10 and PV20 Disclosure PV10 and PV20 are considered non-GAAP financial measures under SEC regulations because they do not include the effects of future income taxes, as is required in computing the standardized measure of discounted future net cash flows.
Slide 34: Non-GAAP Financial Measures: LTM Adjusted EBITDA and Adjusted Net Income
Non-GAAP Financial Measures Last Twelve Months Consolidated Adjusted EBITDA and Adjusted Net Income (Loss) Reconciliation (1) ($ in thousands) Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Net income (loss) $ (45,835) $ 624 $ 20,718 $ 67,303 $ 72,621 $ 60,020 $ 69,192 $ 44,546 Adju
Slide 35: Non-GAAP Financial Measures: Adjusted EBITDA by Segment
Non-GAAP Financial Measures Consolidated Adjusted EBITDA by Segment Reconciliation (1) For the twelve months ended September 30, 2018 ($ in thousands) Corporate and Refining Logistics Retail Other Operating income (loss) $ 77,217 $ 33,209 $ 28,356 $ (54,758) Adjustments to operating income (loss): U
Slide 36: Non-GAAP Financial Measures: Consolidated Free Cash Flow
Non-GAAP Financial Measures Consolidated Free Cash Flow (1) ($ in thousands) By Quarter 2016 (2) 2017 (2) 2018 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Cash provided by (used in) operations $ 17,357 $ 24,994 $ 37,202 $ 43,260 $ 1,027 $ 12,641 $ 18,686 $ 20,573 Less: Capital Expenditures 5,557 7,579 4,198 8,111 11,82
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