Release Date: February 19, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: With the free cash flow generated in the fourth quarter, what are the plans for its use post-Coffeyville turnaround? Will it be used to pay down debt or consider reinstating a dividend? A: Dane Neumann, CFO, stated that the focus is on deleveraging, particularly working off the term loan. While the term loan doesn't need to be fully paid off before considering a dividend, sustained market strength is necessary. David Lamp, CEO, added that the Board reviews the dividend every quarter, and improvements in crack spreads could increase the likelihood of reinstating it.
Q: What is the timeline and capital expenditure required for projects aimed at increasing jet fuel yield? A: David Lamp, CEO, explained that the main constraint is building a business for jet fuel, as major airlines have three-year contracts. The project involves installing a jumper and rearranging tankage at Coffeyville, with readiness expected by the end of the third quarter.
Q: Are there plans to diversify the company's refining footprint beyond the Mid-Con region? A: David Lamp, CEO, mentioned that while they look at all market opportunities, the bid/ask spread has been too wide. The focus is on diversifying away from the Group 3 market in the Mid-Con region, with a preference for moving inland and west rather than south or east.
Q: What are the constraints on renewable diesel capacity, and how do they impact production? A: David Lamp, CEO, noted that the renewable diesel unit was initially expected to handle 7,500 barrels per day, but catalyst limitations have reduced capacity. Adding another catalyst bed could restore capacity, but concerns about government subsidies make further investment risky.
Q: What are the tax implications of the $90 million Midway pipeline sale, and are there plans for further asset sales? A: Dane Neumann, CFO, stated that the tax base for the joint venture was around $15 million, with taxes to be paid in early 2025. David Lamp, CEO, added that while there are some logistics assets available, the potential for further sales is limited compared to previous estimates.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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