Hf Sinclair Corporation · NYSE:DINO
Hf Sinclair — Holly — Investor Presentation (April 2006)
30 slides from Hf Sinclair's investor presentation, Apr 20, 2006
Slide 1: Holly Corporation: Webcast Conference Presentation 2006
Holly Corporation: Webcast Conference Presentation 2006 Update on: Current / Planned Capital Projects Pro Forma EBITDA estimates April 20, 2006
Slide 2: 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 3: Agenda
Agenda Current / Planned Capital Projects Pro Forma EBITDA Estimates Benefits from Energy Legislation / Sulfur credits Questions & Answers
Slide 4: Agenda
Agenda Current / Planned Capital Projects Pro Forma EBITDA Estimates Benefits from Energy Legislation / Sulfur credits Questions & Answers
Slide 5: Update on Current Capital Projects
Update on Current Capital Projects ROSE Asphalt Unit --Navajo Refinery Diesel Hydrotreater Unit --Woods Cross Refinery Ultra Low Sulfur Diesel & Other Projects --Navajo Refinery
Slide 6: Status Update: ROSE Asphalt Unit -- Navajo Refinery
Status Update: ROSE Asphalt Unit --Navajo Refinery: Project Summary: Relocated and refurbished an existing purchased ROSE unit (residuum oil supercritical extraction) to the Artesia, NM facility. Unit has a capacity of 4,500 bpd Unit upgrades low-priced asphalt to higher valued gasoline and diesel.
Slide 7: Status Update: Diesel Hydrotreater Unit -- Woods Cross Refinery
Status Update: Diesel Hydrotreater Unit --Woods Cross Refinery : Project Summary: Install 10,000 bpd hydrotreater Compliance with June 2006 ULSD requirements* Capable of producing all ULSD Create infrastructure for processing heavier Canadian crude oil in the future Significant benefit from tax cred
Slide 8: Status Update: ULSD & Other Projects -- Navajo Refinery
Status Update: ULSD & Other Projects --Navajo Refinery: Projects Summary: ULSD Project - Expand catalytic reformer to 24,000 bpd, convert jet fuel hydrotreater to naphtha service and expand to 10,000 bpd, convert gas oil hydrotreater to ULSD service, install new 15,000 bpd gas oil hydrotreater, and
Slide 9: Current Capital Projects Impact on Pro Forma Annual EBITDA
Current Capital Projects Impact on Pro Forma Annual EBITDA (full year) Major Capital Projects Total Cost '03-'05 Prices 2005 Prices ROSE Unit at NRC $17 $37 $52 Diesel hydrotreater at Woods Cross 34 4 1 ULSD & other projects at NRC 72 40 51 Total $123 $81 $104 Estimates: (in millions) Pro Forma EBIT
Slide 10: New / Planned Capital Projects
New / Planned Capital Projects Sulfur Recovery Project-Navajo Refinery Feedstock Flexibility & Expansion - Navajo Refinery1 Feedstock Flexibility & Expansion --Utah Refinery 1 "Open Season" Evaluation: Salt Lake to Las Vegas Refined Products Pipeline2 1 Subject to final Holly Board approval 2 Potent
Slide 11: Sulfur Recovery Project - Navajo Refinery
Sulfur Recovery Project - Navajo Refinery : Project Summary: Install new 100 ton per day sulfur recovery unit Project will allow processing of 85,000 bpd sour crude Significant benefit from tax credits from energy legislation (see slide 20) Projected cost: $26 million Estimated completion: 1st quart
Slide 12: Feedstock Flexibility & Expansion -- Navajo Refinery
Feedstock Flexibility & Expansion -- Navajo Refinery : Project Summary: Install new crude unit, new gas oil hydrocracker, new solvent de-asphalter, and new hydrogen plant Expand crude capacity to approximately 100,000 bpd Increase ability to capture light/heavy crude differentials - 20,000 bpd Signi
Slide 13: Feedstock Flexibility & Expansion - Woods Cross Refinery
Feedstock Flexibility & Expansion - Woods Cross Refinery : Project Summary: Expand crude unit and revamp for heavier crudes, add a 10,000 bpd gas oil hydrotreater which is expandable to 15,000 bpd and can be converted in the future to a hydrocracker, expand and revamp the solvent de-asphalter to 12,
Slide 14: Project Evaluation: Salt Lake to Las Vegas Refined Products Pipeline
Project Evaluation: Salt Lake to Las Vegas Refined Products Pipeline Project Summary: Increase refined product outlet to fast growing, consistent annual demand market Reduces impact of seasonal demand reduction in wintertime months in local market Possible competitive outlet for crude-cost-advantage
Slide 15: Future Capital Projects Impact on Pro Forma Annual EBITDA
Future Capital Projects Impact on Pro Forma Annual EBITDA (full year) Major Capital Projects Total Cost '03-'05 Prices 2005 Prices Sulfur recovery unit at NRC $26 $12 $16 NRC feedstock flexibility & expansion1 240 80 101 WX feedstock flexibility & expansion1 60 48 55 Total $326 $140 $172 Estimates:
Slide 16: Capital Expenditures by Year
Capital Expenditures by Year: Major Capital Projects: 2006 2007 2008 Diesel Hydrotreater at WX $13 ULSD & other projects at NRC 36 Sulfur recovery unit at NRC 7 10 9 NRC feedstock flexibility & expansion 10 100 130 WX feedstock flexibility & expansion 10 30 20 Sustaining capital & turnaround 35 55 4
Slide 17: Agenda
Agenda Current / Planned Capital Projects Pro Forma EBITDA Estimates Benefits from Energy Legislation / Sulfur credits Questions & Answers
Slide 18: Base EBITDA / Methodology
Base EBITDA / Methodology 2006 Base EBITDA Used '03-'05 margins applied to initial '06 production levels Subtracted MRC's 3-year contribution: Approx. $8mm Result: Base level of Pro Forma EBITDA for 2006: Approx. $151mm
Slide 19: Estimated Pro Forma Refining EBITDA
Estimated Pro Forma Refining EBITDA 2006 2007 2008 2009 2006 Base Refining $151 $151 $151 $151 Current capital projects 53 69 81 81 New capital projects 73 140 Total 204 220 305 372 Pro Forma EBITDA Estimates (in millions)
Slide 20: Agenda
Agenda Current / Planned Capital Projects Pro Forma EBITDA Estimates Benefits from Energy Legislation / Sulfur credits Questions & Answers
Slide 21: Anticipated 2006 / 2007 Tax Benefits
Anticipated 2006 / 2007 Tax Benefits 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 Energy Policy Act of 2005: Provides
Slide 22: Sulfur Credits Benefit
Sulfur Credits Benefit Expected benefits to Holly: Can use as needed in future years. Can monetize if not used internally. Credit Generation: Compliance with Low Sulfur gasoline for small refiners, including Holly, not required until the end 2010. Holly installed a hydrotreater at the Navajo refiner
Slide 23: Cash Flow at Various EBITDA Levels -- 2006
Cash Flow at Various EBITDA Levels -- 2006 EBITDA $200 $300 $400 $500 Estimated Cash Income Tax <45> <82> <119> <156> CAPEX <111> <111> <111> <111> Free Cash Flow $44 $107 $170 $233 (in millions) Other Key Cash Information: Cash balance at 12/31/05: $255 million After-tax cash proceeds from MRC sale
Slide 24: Cash Flow at Various EBITDA Levels -- 2007
Cash Flow at Various EBITDA Levels -- 2007 EBITDA $200 $300 $400 $500 Estimated Cash Income Tax <54> <90> <125> <161> CAPEX <195> <195> <195> <195> Free Cash Flow <$49> $15 $80 $144 (in millions)
Slide 25: Cash Flow at Various EBITDA Levels -- 2008
Cash Flow at Various EBITDA Levels -- 2008 EBITDA $200 $300 $400 $500 Estimated Cash Income Tax <4> <40> <76> <112> CAPEX <204> <204> <204> <204> Free Cash Flow <$8> $56 $120 $184 (in millions)
Slide 26: Navajo Refining Margins
Navajo Refining Margins Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec East 3.9 5.21 7.33 6.46 4.92 5.48 5.79 5.73 5.1 6.64 6.2 2 West 1.67 2.31 4.05 7 7.46 5.67 0.25 2.08 3.77 2.04 1.43 2.66 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 1.16 2.95 0.35 3.71 3.5 1.93 4.45 6.81 13.89 14.33 3.07 4.4
Slide 27: Woods Cross Margins
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec East -1.09 1.21 5.56 4.32 6.98 2.33 2.87 3.93 -0.67 -0.95 4.97 -0.97 West 3.01 1.52 0.19 5.58 3.93 1.93 4.28 2.13 10.38 5.44 2.56 3.15 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 2.78 1.43 4.97 5 2.74 4.39 1.05 2.8 14.65 18.48 0.72 2.37 wx gm 0 4.3
Slide 28: Agenda
Agenda Current / Planned Capital Projects Pro Forma EBITDA Estimates Benefits from Energy Legislation / Sulfur credits Questions & Answers
Slide 29: Definitions
Definitions BPD: the number of barrels per day of crude oil or petroleum products. Catalytic reforming: a refinery process which uses a precious metal (such as platinum) based catalyst to convert low octane naphtha fractionated directly from crude oil to high octane gasoline blendstock and hydrogen.
Slide 30: Definitions
Definitions LSG: gasoline that contains less than 30 PPM of total sulfur. MMSCFD: million standard cubic feet per day PPM: parts-per-million. Refining gross margin or refinery gross margin: the difference between average net sales price and average costs of products per barrel of produced refined pr