CVI - Earnings call transcript Q2 2021

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings and welcome to the CVR Energy Inc.

Second Quarter 2021 Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. to conference like host, to now Mr. would turn over the your I Manager Investor FP&A Energy. Roberts, of Richard Senior and Relations CVR for Thank you.

may You begin.

Richard Roberts

you Chief XXXX earnings Good may very With me for Thank everyone. Dave call. Tracy CVR joining Lamp, Jackson, are quarter that Officer; appreciate our Prior our quarter Melissa. that afternoon defined Officer; to XXXX us call second second management. this as you, other you discussing remind Energy of today this results, Executive afternoon, forward-looking members and much me term We Chief our under Financial laws. let statements, federal contain conference our is securities

to this this that facts, statements are be any not deemed historical forward-looking made For statements. purpose, during call of be statements may

by release. that Commission statements set the are factors be filings earnings affected Exchange Securities in and You latest may forth our important our with in these and cautioned

actual discussed new any the materially whether by operations events publicly required differ update a or forward-looking may forward-looking As except otherwise, or no future to law. extent undertake of result the a We as in result, obligation results results information, statements, the to from statements.

Form the that, the remind such split financial related and unit second on you are earnings filed during over also quarter disclosures various I'll Partners Let me discussed split-adjusted with This SEC this including a we common basis. the measures, The made With X-for-XX comparable November XX-Q non-GAAP to period measures. call call. in included release reconciliation to to reverse for call XXXX Dave. our call includes turn be CVR directly also and on a measures, of will the XX, completed most that references XXXX. GAAP that the financial per units its non-GAAP Any are on

Dave Lamp

a joining reported net loss the of $X you call. second afternoon, and Thank our Thank the million loss $X.XX. EBITDA quarter of for Richard. Adjusted you, consolidated $XX quarter Good for earnings million. per everyone. share Yesterday, we was

quarter, posting EBITDA the the during well segments with ran in and adjusted facilities fertilizer petroleum both Our year-over-year. increased

However, obligation. Directors our results, once RIN $XXX US our non-cash headwinds again, including Board In outstanding mark-to-market interest considerable a a a million our our May, million, Delek were on special estimated dividend in combination of prices rising cash $XX of approved comprised of Holdings. totaling and to RIN

senior January stated earning that cash As the much to The focus needed. for cash a excess position market acquisitions more sheet number The past believe too any of quarters, acquisitions, more additional a spread and balance When on acquisition opportunities renewables. are I -- fund over we elected and few wide. US And we a we absent Since wasn't our time, on remained the time bid-ask material we evaluated at acquisitions of shifting changed XXXX, of that in number had refining and notes the the offering were refinery completed potential raise the a return. significantly. are the to are -- have we evaluating has transaction. closures too Europe strategy refinery we on to now in capacity of

excess the Board of notes, distribute the in to elected provisions with result, a senior the As accordance the proceeds. cash

of made we efficient us and net nearly stock, gain Delek $XX addition cash that million on to In our investment, Delek providing us per of a shareholders structure exit. to with recognize providing share with allowed this while $X an also

cash Board appropriate to to uses refinery Board cash around and uncertainties and continue shareholders. return of around best discussions level RINs to the our has elected We'll small continued our With exemptions, the regular the the our reinstate not the dividend. with the of

XXX,XXX for as ran barrels the segment, per by XXXX, petroleum combined compared impacted XXX,XXX our day was in was to throughput of second approximately total per Coffeyville. well which quarter. the quarter in at beginning year. day, quarter have XXXX the increased the Both we Cushing. For And the second turnaround to planned barrels WCS of during Benchmark a since at resumed the cracks weak the prices refineries Coffeyville of processing due WCS

second And Light XXX,XXX production, at year, product XXXX. the the RINs same on day product per increase, increase $X.XX were $X.XX prices was elevated $X.XX However, consume capture barrel XXXX. On compared XXXX In $XX.XX pandemic. much gasoline in per XX% LPG of RVO recovery to the barrel the continued disrupted prices RIN of the quarter three to in to cracks. compared maximum second in averaged of in as the $XX.XX of period light quarter same the XX,XXX quarter last during per year The barrel $X.XX We second barrels oil of production premium the quarter compared over X-X-X $X.XX as second basis, maximizing crude WCS to averaged per The the XXX% averaged in generation. period year. optimized Cushing to quarter RIN COVID onset the low XXXX of crude the differential total that crude approximately for when The day yield oil $X.XX the prices a and from barrels runs second the Group by period. in last was crack ensure WTI over in yield, per as quarter the crude processed. was compared we a second in a the quarter via prior to WTI of $X.XX to quarter quarter compared WTI differential gathered approximately second barrel XXXX. to in levels Brent-TI Midland differential in

earlier the Winter although, year through summer. planting one estimates inventory strong fertilizer years. nitrogen prices ran year. across activity utilization yields and and system additional and well a during into corn And limited spring this rally the The and and are deferred carryouts this quarter the driven XXXX, for We remained prices increase for Domestic due low planting USDA of as well our crop in prices some fertilizers In Uri firm consolidated rigs shutdown in with low segment have now in the imply has inputs, pricing. demand demand following second quarter. season during for XX%. XX fertilizer lowest fertilizer Fertilizer place. turnaround is to crop to both ammonia the inventories inventories seen setup taking Storm activity have from continues positive Oklahoma drilling declines significant for added of plants were the both With in continued last the as in the production remains from Kansas

discuss the turn financial over highlights. Tracy, to some Now additional to call me let

Tracy Jackson

good and Dave you, Thank afternoon everyone.

include get I results that EBITDA, revised not second may quarter would obscure during I of our into Before we results, like significant we reporting highlight to trends. XXXX our our non-cash items underlying attributable excludes which ongoing and adjusted believe to operations to the that

XXXX, of consolidated quarter was $X second and million share the was diluted For $XXX our loss million. loss per $X.XX net EBITDA was

and $XX our results negative obligation $XX estimated investment million gain inventory on in of quarter outstanding $XX million, favorable million impacts our a second unrealized impact of rent mark-to-market valuation related of mark-to-market Our include to gains of a $XX Delek. derivative million,

the adjusted by cracks second driven quarter barrel. by losses. quarter the in increased year-over-year was the quarter Petroleum for EBITDA adjusted and realized RINs elevated segment's million offset second of throughput prices In higher volumes was XXXX product reported refining per and quarter margin derivative our in EBITDA items, $X.XX to XXXX. increase was $XX $XX negative $X XXXX second of The Petroleum of the was for these compared adjusted Excluding million. EBITDA The segment's million

capture mark-to-market favorable of barrel. quarter Derivative impact reduced Excluding XX% barrel, RIN $X.XX for rate derivative inventory $X.XX have quarter impacts the for obligation in our and second of the estimated of In outstanding the associated we XX% per quarter second margin spread million, of gains $XX would than of second of had million, for XXXX this $X.XX million. basis which per of mark-to-market the primarily was which our barrel gains gains of less XXXX, second or $X.XX to excluding XXX%. XXXX. barrel On by $X.XX per capture approximately $XX $XX approximately XX%. total of our in second the impact was per total barrel, per RINs of XXXX losses throughput to the unrealized been total quarter the of rate per quarter gains totaled million same expense unrealized refining compared $X quarter or unrealized of XXXX million barrel over last crack an derivatives. period includes expense RINs $XXX $X.XX of million with In compared increase $X.X second included of derivative year,

was $X.XX end. average RINs million Our by on which RIN quarter expense was impact inflated estimated of obligation, second our mark-to-market the from at $XX mark-to-market an at RFS price quarter

to as RFS approximates quarter second half Our obligation XXXX believe estimated should of the XXXX exempt for the regulation. be at continue through Wynnewood's of the under first end the obligation obligations RFS Wynnewood's we

for for applications and EPA small outstanding for XXXX the have XXXX we'll XXXX. submit soon We for and exemptions refinery with Wynnewood

This year we approximately RINs diesel could and RINs. the but of we million internal XX renewable This of later the includes from production were volumes on impact $X.XX year, XXX For does was quarter not expected RINs driven second approximately this XXXX, XXXX waivers. RVO decline an obligation include in expenses forecast our full based the generate and the continued blending levels barrel per XXXX generated million from direct higher to primarily The throughput operating $X.XX direct petroleum controlling barrel as expenses on per period. compared year operating segment's the costs. by of in in focus prior

common adjusted $X.XX XXXX, adjusted loss of million. of EBITDA million, and XXXX EBITDA in higher for per unit of For $XX of EBITDA compared fertilizer per to operating distribution losses quarter the second XXXX. per is income by a operating of partnership of second the million, was of $X.XX income The net net common second and a $XX declared increase ammonia primarily $XX quarter of million segment unit unit adjusted driven sales year-over-year reported prices. $XX $XX and $X This quarter The UAN or million. million common or $X.XX the of

owns petroleum for maintenance approximately $XX fertilizer distribution million and the the $X XX% second spending $XXX capital million consolidated the million segment, to of the $XX the environmental spending we which in which fertilizer common diesel $X approximately was of capital capital. XXXX proportionate from to segment capital million, $XX Partners' CVR segment. included million. on including estimate be and million segment million maintenance expected As petroleum of and a approximately CVR $X $XX receive and XXXX million, renewable Environmental million total to units, to from be quarter We in unit. $XX for $XXX million million spending $X million, approximately comprised Energy is the consolidated $X cash Total will of

for source preparation decrease of $XX in the our a cash turnaround of capital approximately turnaround in obligation, in end, primarily flow million related be consolidated excludes Coffeyville million inventory due spending, $X to spending received quarter to the $XXX Act. products and derivative and provided NOL at Working will $XX of liabilities for Subsequent capital crude plan in the Wynnewood we quarter provisions million estimated planned carryback an CARES oil partially estimate and Cash $XXX to in million income second refined an RINs XXXX Our increase was increased valuation. XXXX. by we quarter refund million. in the by the offset of for free approximately and XXXX a operations was planned the which was year tax

million of XXth, $XXX the ended with cash. At sheet. we June to balance the Turning approximately quarter

the of As paid quarter portion a reminder June the on $XXX special cash million. was second XX dividend

cash in the million fertilizer balance segment. includes $XX consolidated Our

ABL As which we $XXX million of $XXX million base approximately of had June the $XXX million. less was comprised included availability approximately $XXX cash liquidity, the of of in CVR and under approximately Partners, XXth, of borrowing of excluding cash million

barrels ahead XXXX XXX,XXX quarter petroleum XXX,XXX to to day. our total Looking we approximately for estimate per be throughput third the of segment, to

We between direct $XX range million. capital to spending $XX total expenses and to operating and $XX total million expect million between $XX be million and

million, $XX be and our million expenses XXXX to greater I'll to $XX approximately be XX%, inventory utilization million total be million. third turn the quarter ammonia you. segment, $X For direct rate Dave between we fertilizer operating excluding $XX than to impacts capital With the call spending that, and to to estimate back

Dave Lamp

Tracy. you Thank

benchmark have margin trends to the amount, barrel per fuel. the While Demand quarter, increased unchanged. underlying diesel same mostly RIN nearly by for gasoline increased and positive the during second cracks nearly available jet been leaving $X refineries prices

an driven has inventories However, increasing product refinery well. the as utilization increase in

We of capacity US further continue of both the in be required tidy to and spreads. Europe refining and believe further crack to will sustained rationalization rebound inventory drive

the since adjusted and Court favorable RIN Supreme the spring. RINs, fundamentals generally second been have market have since Looking current ruling. at cracks for prices flat declined peaked quarter the in

jet points too a The high. the levels should uptick to remained key in come risk. weigh few the to prices travel present vaccinations diesel and Delta with fuel remains within restrictions along a loosening although distillate which travel is demand well continued are on pre-pandemic and in on the RIN percentage jet increasing continues variant Gasoline and from below, demand recent may way COVID this near-term cases growth However, crack. although international return of

However, cautiously optimistic to and Crude draws oil. that light all fundamentals crude Starting crude narrow. we inventory remain strong Brent-TI of spread market see. exports we caused on production have weak the oil domestic with

shale of quality in US Brent-TI spread. quality have We imports US the spreads are and believe crude Canada. have more playing European of heavy and Sour advantage from but the to for especially the oil weak further the WCS refiners come are improved, -- appreciate pressuring still

closures in Looking and start new the necessary oversupplied all due US in refiners. US, is distort and to and are remain jet prices in weak come for too XXXX. spread more all chemical Despite XXXX and refining to online. preparing increased RIN face runs refinery high in global these refineries as the has products, integrated continue capacity refined actually in crack to closures markets the of demand. high up XXXX More Europe are at capacity

most costs on the cracks sustaining planned. in With as the the renewable turnaround the flow cycle at not generating into these SG&A, cost at Europe considering costs, RIN account season. US has on are best the Taking refineries and RINs, diesel over and unit levels. free cash of weak Construction are capital interest debt, been progressing Wynnewood

we of a ready final to bring are conversion reached down steps where process. the have the complete We to point hydrocracker the

considerably, level time. not and particularly prices the increased a the soybean refined complete oil conversion at this sense time where bleached to deodorized complete economics in be the conversion should renewable take the However, to ready diesel for to have feedstock to do make for us down unit September We frame. the

However, favorable on we the must available proceed. be feedstocks economics based before

to diesel continually our ability As peers traditional the is one versus our benefits we run of our petroleum renewable project or hydrocracker have key of service service. the stated, either

plan is current additional for to petroleum the Our keep unit service now.

and continue capabilities pretreatment to of Phase As our renewable we strategy, near lower-CI involves Phase of X, feedstocks. diesel the which X completion develop adding we for low-cost

the started will which design approximately complete. engineering take process months PTU, have to on the three We

similar We recent for diesel Phase oil, likely The of two are also to US. new conversion renewable completing the Coffeyville. particularly process feedstock in diesel design be start-up the attributed diesel can at potential renewable of the in renewable X of plants spike prices, developing a project recent soybean

be economics. fuel expirations to to some forced of are constructed margin increasing freight plants according expect RD will the more and react RD and We begin believe to enjoy. currently demand up up feedstock in feedstock US, market low the pricing to carbon As contracts we coming they with credit the producers values standard give

the to of installation have type and are the we of any pre-treating we unit, variety of that to we access flexibility a a feedstock are can backyard. in With that our run feedstock suppliers talking should

has the $X.XX third averaged ton, Midland prices the to differential Brent-TI barrel Looking with $XXX WTI; WTL prices at under averaged are have quarter-to-date averaging at ammonia $XX.XX at at differential around a X Cushing are the per follows. quarter WTI, over the and under while Cushing $X.XX differential RINs $XX.XX $X.XX, per WCS RVO of metrics UAN WTI ton. and a $XXX under $X.XX spread increased The X-X-X XXXX barrel basis; a the have cracks on with as XXXX, Group

Group was yesterday, barrel was X Brent-TI $XX.XX $X.XX the of cracks $XX.XX under X-X-X and WTI. were differential per WCS As

the RVO On ruling basis the exemptions to approximately Supreme Court related overturn XXXX Tenth refinery ruled In RINs barrel. continuity. Circuit the June, were $X.XX on court per small to

entitled impact go time. of bankrupt output, from As we high lack any Congress like location, Antenna refinery and with to of diesel meaningful should relief and have and retail Wynnewood previously not not ours refinery infrastructure compliance remote wholesale XXXX stated, that that RFS should The and at exemption small small are the no the refineries exemptions originally legal granted XXXX. do granted was not its we see should not should why be – reinstated and be for granted refinery be for reason and exemptions XXXX, it it why XXXX any small why and XXXX, XXXX was should

much pending to the deadline. The volume small industry's around D.C. blending yet more decisions refinery EPA EXX prices. the months has failing addition important In issue RIN on past to meet the the that timely the by to on have than rule EPA's mandates being pressure ethanol for recent ruling obligation puts RVO and that XXXX, renewable makes the to DX their Circuit – more despite inability given nine exemption,

short-term best small refineries or DX now Other qualifying on for outcome DX issue are and RIN is the substantially for RVO, emphasis nationwide the CVI for course, a cap without reduce waiver Of alternatives EPA to to prices issue to reallocation. refinery RINs. place waivers

These carbon emissions all I engines for all DXs engines and renewable decouple engines. from the new viability ensure liquid the the implement the internal also reduction ready for mandate. would future. questions. for DXs. And vehicles EPA for or to not ICE, increase we're standard but the combustion should actions solution a It of that, XX now only act harden ICE With now, think long-term in advance higher. to internal octane combustion biodiesel fuels mandate would should EXX of should ethanol all also the is diesel and stakeholders best RINs reduce

Operator

question. Credit with Thank Suisse. of the question Instructions] first proceed Our Gupta Please [Operator from your with you. line Manav comes

Manav Gupta

that to significantly. just moving understand Hey, good comments be would side. costs RBD a diesel up the like guys. I'm have appreciate renewable trying on what been understand the I I breakeven. pretty

the prices the be bring could let's breakeven question help you turn us to discount economical more still so did have say trading be And understand, versus to kind you on is use pre-treat to in that need a CDSO enough would red? where or be green could CDSO of $X.XX, or on soya today you side? If that you hypothetical you for to is, you machine, would oil bean feedstock what $X.XX and magnitude the

Dave Lamp

-- is get pound oils. is delivered. bean to a biggest $X.XX another to that roughly right the frankly all deodorized able refined bean you're oil now problem The get The there bleached problem. paying be basis Sure. and to and oil, of other right And the really the it

Of you of you had buy is bean if by to that problem course, all can could producers offering a beans. pretreater, really -- that. vantage there because with lot the a oil bean recognize that more $X.XX untreated the marketplace make they not they're that untreated and refining that The money

I feedstock feedstocks these say through things really that these ultimately. all what's going going are think is differentiates all in value. somehow the trade And that's when all that in low the the the to you're I oil price. bean the on to And raw CI. producers happening I CI carbon up They're go of fuel that CI. believe them is And approaching standard their share seeing are that to basically want the thing

Manav Gupta

discount had the there's such very informative. why I that's wondering big no CDSO two. I always and forcing people between idea was to buy a they're holding RBD. Wow

follow-up not Clearly, is CDSO here solutions you right you your don't Like the ruling in that number confident Is the where your Wynnewood obviously probability of outcome likely now? My most it is matter. reallocation? RFS without you Dave, screen with favor. it then in highlighted mind if SREs get possible is Is SREs? Supreme the So how will fixes, a quick What's that Court waiver? to are. available and the prices you are highest

You should get it.

would you're I and out? what's you're at best like realistic case So which looking like be sitting, understand where you probability-weighted outlook help But rid of RVO the would the thing most get stuff.

David Lamp

And Well, here. I streets I EPA. could think some take EPA that it's know there's easy that don't frankly,

politicians problem how this the I And point. easily and this at have with think by the regulation. administered it's It's administrations as manipulated evident last really is by politics it. the this three

we're decided hear they're been waiting is take again. delayed to So going we be for action. And think course -- politics I EPA what before a it's the staffers that of are and to

XX -- your over months an is for March for Here RVO we the due and XX, the still really And RINs. EPA or render more having between XXXX. have the XXXX. almost normal in date we they August than half have declare cashing The XXXX process officially in or half actual are July is And is or now. over. RVO to to don't

we're here. track So way off

as cover bank. small XXXX. way Supreme it RFA not The that I is the ruling a of think too near with year gave spend the we RVO generating was even them they've Court and as other side, to XXXX use the I'll carryover some the fact high. call to frankly here corn got industry the an refinery RINs -- RVO was lobbies matter a enough rebuild groups the supply the from to the way a

have to to ethanol, reallocation. just which they four to the of just in with not somehow all refiners, ways there's which law. the think can And DXs they Two the outlined that. something small it. it And one is do states mandate One somehow. politics does It's deal to general it. of as without over really to is someway. the I've to do it waiver And around So issue work. XX% I do bank a three know staffers DXs on from do decouple The is to rebuild

DXs in requirement the to dig that DX to and DXs drives meet have up. You

decouple from Make very big and just all bang reduce the of on and should somehow. emphasis really DXs And ultimate this then carbon be I on it you them the frankly we'll will those on reducing low DXs problem. the fuels. that And best for cap DXs them solve DXs, buck to the which mandate EPA DXs. gives really do and is So or think -- for the to for solution

really know everybody what one that fuels it's don't helps renewable corn lobby And and last -- I so associations. the how including the hard. So

Manav Gupta

you information, much for so Thank you fair. much. so That’s Dave. Thank

Operator

Thank you.

from of next the with your question. Paul Please line proceed question comes Cheng Scotiabank. with Our

Paul Cheng

guys. obviously, possibility to market. and you're about talking the expand Good maybe is that H, afternoon. market, the wholesale looking Dave, one into Wynne brand

deal the peer that that part your they doesn't advantage into into And of a guys get option price that announced is will Have don't of them think just expensive. that into allow that the or business. you? to to One you seems you looked be that that that fit

Dave Lamp

to acquisition we've is key get -- to been We ever -- never a of Paul, deal three at as -- years. wide an our it trying done. a get do it's scale can standpoint that any too we And was we bid-ask acquisition in it we really looking part strategies. difficult. for But were from

X% off So biodiesel point. kind base just is in in for us are rack would about diesel their all blending to all a of that. system we help than all internal allow Magellan do talk And backed we their maximizing actually revamping we generation that's this we We're the our at sales we've There Other of -- maximize that which tremendously. can. can can.

Paul Cheng

seems are be at trying a seems of expensive. the things. buying and expensive. that it brand that And bunch deal this Wholesale doesn't that's collectively Dave extremely I or course that marketing mean, or based now But retail station marketing network to morning that I be to job the understand I into they the to get doesn't on mean of the just Right. retail curious, you're least I'm expensive.

but want also that M&A think going of refining, you actively combination So the if looking job you're just are because at okay, looking And something you're no that -- you associated deal one But job you're -- longer consider network You guys at point that's network get then for with refining. that not is you I you to an an a going into you refining? will not refining. a just into is really with a say, or do? to want

Dave Lamp

very And And haven't at we're volume several looked some with to happen. make sort we term extent wholesale the two a interesting customers generally. of we've able a again, to just our one brand at typical. which a which looked some in we deal does We've competing present But a to very stations we $X.XX been have have sell large issues. to on. the not easy Paul, the means small we model. the can't wholesale people sell but some of. deals. looking, to zone a But But We'll current that you don't got if market we've gotten if I good in sounds as up against number close you've unable analysis competing have final were have Well, a to it's on just keep close it retail looked -- as is And sized margins customers you our we ability at -- are we've to large to pretty go there our that to of we we're into what these try $X.XX brand.

Paul Cheng

Understand.

You're saying as in cost to process you that you fuel. the start processing plan of third WCS How much some do quarter?

Dave Lamp

much that. to we on in not run. our how We don't you guide We'll typically slate. say going But we're it's tell

Paul Cheng

Okay. you saying economics renewable diesel you're today, And the -- plan even turn though to that I are you doesn't entice mean the can ready. on

sake just a come separate that your seems So how plan let's they to -- bring into segment. once your for argument's that Valero, to stream that profitability as on report actually peers such comparing I'm and trying understand that

what be And your through unit of So, facility you quarter, we -- a actually have second entire that running. little EBITDA would of if economic at can what and operation? bit your any Is one So you And unit. have understand is number the a like up pretreatment look your that share? that -- any can better is the all. insight that plan

Dave Lamp

is And margins right now. why bean we're that of think you -- doing I'm conversion an negative. now, overheated I That's telling not right that Well, are the market. the part

through I just even you're of substantially It all through beans, and the just like feedstocks, But to are has cooking occur. the tell double. And rebalance. all white grease, think tallow, used couple are. to grease also oil they almost yellow up that, it I'll all takes you following these that a quarters for way

that, The just feedstocks. is other issue availability advantaged, of the the look at CI

of all you total in United that's They're There I very -- corn If That yellow availability half just going just sellers the oil, what mean they're that, is. to they're includes the them. of that's it's to of many up, are And aren't add carbon tallow, the low I'm the of States, going bean extract grease white of to many in value is grease. them. them standard's saying going into oil what ultimately volume value. that And not them them. this price understand fuel And those. some the

the long I'm Valeros, we're telling backyard. have we runway get after And are going how that of you, And from look going those look we're in going to we're our So they at at to it them. a them. can feedstock. away

Paul Cheng

also you're Coffeyville? or just what you're on it's a plan, to the in pretreatment you based And ahead pause? go the going going still that or Phase another and to three one the still with take unit So described, the expansion billion

Dave Lamp

we feedstocks to already. not project going initial position take -- sort do I we're these built engineering And one we're Coffeyville on in to the sanction at the get yet, Well, until to think the a ourselves going going we're conversion. out. see to how But we've least tackle the

Paul Cheng

How about the pretreatment unit?

Dave Lamp

for do pretreated, however Wynnewood the We'll, unit. a

Paul Cheng

will both Wynnewood you're to So you going and will the sized anyway, But that, for so go it size not be that ahead. it Coffeyville.

to going size for Wynnewood? it just You're

Dave Lamp

That's right.

Paul Cheng

to is need to size just be? Do you to Wynnewood? going that how And much

Dave Lamp

$XX We're million. predicting somewhere $XX and between million

Paul Cheng

you're All right, going pause and not on that. to

ahead, on You're as planned going that one. to move

Dave Lamp

Yeah.

basically buy do lead We And the have also Board long equipment. to approval engineering.

Paul… So

Paul Cheng

then, Got sorry? when you, I'm and --

Dave Lamp

ahead. that's moving And

Paul Cheng

pretreatment that think Okay. you come expect currently And the that when to unit, do -- on you stream? when

Dave Lamp

we best XX dates But complete it XX They full done while we've heard, advertised yet aren't what complicated. to to the scope particularly we've have don't it. the months take months, is Well, months. as will XX

it's months should months be between So XX I and say. XX would it -- somewhere

Paul Cheng

the second of sometime talking half in we're So about XXXX?

Dave Lamp

quarter bet. third Right. Probably safe a in the is

Paul Cheng

Okay. Perfect. Thank you.

Operator

you. Thank

proceed your Our Please question. next JPMorgan. the from with Phil with line of Gresh comes question

Phil Gresh

appreciate Hey, Dave. straight Good a afternoon, been Always you've through.

Dave Lamp

Thank you.

Phil Gresh

time pretreatment a if negative? about will in of is being it profitable? that all on pretreatment economics that special How it be where then everybody unit question gets end unit. when does doing make a startup inherently to my something Is up guess, I there the the this are putting more same is Well,

Dave Lamp

pretreatment it do your a And little less I about said frankly built pound into soybean similar. to in basis oil remember, was a allows I but pretty the $X.XX you pretreater Well, a to oil yourself. right now. maybe degree corn it's

attacking. that's you're So what

treat sure of oil day I I get to make the this available refined and which going And we're an the long $X.XX assuming that point. them – bean oil, producers They'd assumption You're basis cost to probably will of deodorize at it up out $X.XX. if a was it. not untreated because to bleach about is all bean some make is would basis that pick

feedstock and not is States. they're it the we around lot the with – the crush the Coast, now. the most be got a – that Mid-Con oil may to rebalance. to West fortune of on East bean available have production. I And And Gulf but certainly are feedlots markets critical mainly So access not there it true the to right of us. our a biggest because plants are to Coast the the kind here beans Coast And in or making worldwide think United And

plants. We have a lot of rendering

of ethanol far plants We from lot a us. not have

be to going on are feeds that those working our we're in backyard. So

Phil Gresh

guess positive on you the bean that of is I now that that like Right. oil? outside And side would I it's on we're seeing bean what guess something about adjusted oil you're the the [Indiscernible] even feedstock the EBITDA feedstock CI the that if over right – parity parity just and envision, talking

Dave Lamp

say. of to Well kind hard it's

on in I'm going all And pretty absolute because feedstocks anything. market carbon feedstock, – of designing obviously of renewable we CI price. think run fuel to on. it's our And I it the do to A the pretty the issues that the little a do prices in there's are advantaged same also have the the we're facing enter the all bit CI, those future. secure more need profitability we're announced in as then doesn't of is California. these to But capacity get lot sure. you decisions And market more existing feel low more expand. any those lower diesel have with the come on I be – risk and a you will the standard to at more more coming lot and bean

Phil Gresh

Right.

All Okay. right. it Thank you. over. I’ll turn

Dave Lamp

Thank you.

Operator

Instructions] next with your comes question proceed Our with [Operator Goldman question. Sachs. from of the line Mehta Neil Please

Carly Davenport

you back Thanks XXXX? your Brent-TI just the ran are in Brent-TI into how then afternoon. the still pretty prepared far for good year tight about averages the looking and you thus is on the In the for things and taking Can This Hi, of talk through XQ there. views evolves remarks, Neil. questions. half on Carly

Dave Lamp

Sure.

investment keep furthermore, the throw E&Ps it $XX business their depends discipline they're on But going there of spread to have hadn't it into I to and more the say think thinking shale price the that more newfound and yet. out that I and becoming oil, to drill. seem out crude Brent-TI the oils increase incorporated the I model. think all of force on to And happened really the coming exports. let's depends at crude

or volatility So in for the And to it's crude is fuel I $X States. -- have range United and had to -- figured very out to that maybe the they're they're how And that and to some range, oil. any effectively shale believe exporting imagine, I going to Europeans to $X run it products stay $X.XX do has it. time. the it's to this But oil it not back make strongly right some $X what the doing

Carly Davenport

guess We can through focused the special there. then or just the can incremental capital allocation? balance you renewable business. now uses? the kind for you're for of path out the you returns around building dividend completed, on know color of I Thanks the But any capital sheet walk side with us Great. framework about And talk

Dave Lamp

Sure.

We're our strategic diesel, renewable think, direction investments flow cash don't may we trying really, the is way. flow, in peaked, it feels which probably generate think to is to that the refining we're except have company. free for I And making model sure shareholders. know. returned hard cash really new of But -- free I is the

I Europe more chemicals, more away. monsters think If too. that's trim to with that refineries in here to Asia the direction is ultimate noncompetitive few fully and ex our with a more in situation these just refineries are need momentum being go their to few drives the you a and frankly uncertainty solution this integrated And in built RINs. And need RINs other --

But is has our we as as returned allocation shareholders, that -- yield So, our as price with business The -- means in special It's large to XX% the whenever very soon price. be possible generation cash possible on is potential thing. capital does the free no stock changed. model from has did. I think by flow much a by right if the I to back there evident just it mentioned don't as our RIN yesterday's dividend EPA the

Carly Davenport

the Great. Thanks time. for

Dave Lamp

You are welcome.

Operator

turn to Thank you. question-and-answer concludes that Ladies management our and gentlemen, for comments. final any the session. I'll floor back

Dave Lamp

Energy. Again, you thank for to I'd interest CVR in like your

to a responsible earnings employees hard to Thank for like operations. work you. next reviewing and commitment quarter our our to the reliable third their and we'd call. great Have environmentally thank day. our look during forward results Additionally, We safe

Operator

today's you. Thank concludes conference. This

for at You may you participation. this your your time. Thank disconnect lines

CVR Energy (CVI) 4 Aug 212021 Q2 Earnings call transcript