DINO - Earnings call 4 2020 | HF Sinclair Corporation

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Operator

Welcome to HollyFrontier Corporation's Fourth Quarter 2020 Conference Call and Webcast. Hosting the call today from HollyFrontier is Mike Jennings, President and Chief Executive Officer. He is joined by Rich Voliva, Executive Vice President and Chief Financial Officer; Tim Go, Executive Vice President and Chief Operating Officer; Tom Creery, President, Refining and Marketing; and Bruce Lerner, President Hollyfrontier Lubricants and Specialties.

[Operator Instructions] Please note that this conference is being recorded. It is now my pleasure to turn the floor over to Craig Biery, Vice President, Investor Relations. begin. may you Craig,

Craig Biery

December Good XXXX and we Earnings announcing quarter press James. Corporation's issued to Fourth release ending the for Quarter Call. results XXXX. morning, you, welcome everyone, HollyFrontier a XX, Thank This morning,

this If may release, at find copy website you our press you on a would hollyfrontier.com. like of one

statements measures. with management those SEC information note release in press any These our the proceed press many summary, no webcast the replay including intended financial expectations, also results for In transcript. the forward-looking cause filings. reconciliations release. expectations, or rereading accurate to are may the today's of statements harbor are Also, disclosure to on we There that factors noted longer covered time-sensitive safe see Before regarding be of any safe remarks, Please please be made judgments please predictions differ could federal note are at of GAAP today's the under statement call from may provisions non-GAAP call harbor to in measures. provided securities The include statements. the or discussion laws. time of

turn that, the to with over I'll And Jennings. Mike call

Michael Jennings

focusing ended strengthen on our capital of the for and morning, half our assets to was the global efforts to liquidity controlled fundamentals everyone. sheet, balance despite to position healthy of Thanks, renewable industry We earnings challenges short Great. HollyFrontier we long that the Good Craig. year on competitive and capture pandemic. both further in advantages. could, efficiency. business, our We high-quality business to business evolves, and continuing new We the an HollyFrontier. unprecedented opportunities strong disciplined face in initiatives maintaining by term. the and allocation COVID-XX year our a will approach that enable a our safety the with us to the what XXXX took strong pandemic, realized the reliability, steps and and important lubricants as in year the In made second created capitalize extraordinary key of enhance HollyFrontier persevered investments

and continue rebound, beyond, into well-positioned as expansion is HollyFrontier renewables. success we businesses and our 'XX I believe to our core for ahead Looking that long-term

fourth Turning items a shareholders the $X.XX of to the increased quarter reflect by results. to loss that results per attributable collectively special reported $X million net share. We $XXX These net HollyFrontier diluted million. loss or

fuels, coupled margins at inventory compared fourth the diluted decrease million million in Excluding these adjusted diluted share period transportation crude margin $X.XX Fourth year-end share items, per to of XXX,XXX EBITDA $XX to XXX,XXX XXX,XXX. And loss $X.XX per approximately income period of basis. the continued of was per crude with the throughput XX% decrease a This $XXX quarter consolidated for guidance of same LIFO the fourth or by was impacted of compressed million, for compared also per on million was barrel to or segment for XXXX. $X.XX charge due same a million for $XX EBITDA $XXX the fourth adjusted adjusted per a last compared or was year. net consolidated impact million Adjusted period versus barrels $X.XX Fourth produced negative day The weak demand the our earnings loss top of refinery gross of approximately quarter of end the of to quarter $XXX net Refining to decrease XXXX. million $XXX was were $XX quarter XXXX. of the primarily barrel for reported differentials. quarter

performance in XXXX, within strong achieved Despite and we availability safety the segment. tremendous operational our faced obstacles we Refining

decrease in business Specialty and the to driven was to a million million by related $XX $XX charge million XXXX. $XX Sonneborn. of This of negative Products compared impairment goodwill of EBITDA reported Lubricants fourth Our quarter

a Forward our markets. Sales million. in our industrial $XX in due the solid Lubricants Rack only quarter the was Specialty EBITDA fourth adjusted transportation essentially prior continued to quarter, adjusted representing adjusted seasonality impairment, the the demand compared quarter were reported and reported of volumes third Forward segment versus improvement end and Excluding $XX X% EBITDA margin. were typical flat XX% down million, EBITDA to Rack and year. Despite an

highest million lower demand Holly $XX million fourth Within in Partners XXXX. for reported HEP healthy Energy supported Back commitment earnings, by year. Despite EBITDA the strengthened of margins base quarter contracts. fourth their portion, minimum for year-over-year, the fourth compared oils volume volumes last to Rack the remained strong $XX quarter levels as to of since long-term quarter delivered

to expect to run XXXX, between Refining market Within for HollyFrontier's evolution better that continued success. facilitate day per oil. optimistic we quarter conditions crude will and segment first Looking for growth, we're XXX,XXX of the our XXXX, of barrels XXX,XXX,

to distributed as recent fuels economy availability recovers Southwest. strengthen weakness demand vaccines West Woods COVID-XX for in the the COVID-XX charge the 'XX the and by demand Tulsa from reduced as the continued believe pandemic, first and of the crude in We adversely quarter of also the refineries weather been and will as well throughout Mid-Continent transportation from maintenance are has In pandemic. addition natural our resulting at the Cross impacted extreme cold to that gas due scheduled global

demand adjust Lubricants we a oil normal and to quarter finished products production our Specialty base strong, rebound levels underlying segment, expect and seasonal and commensurate XXXX. with in first market expect remain refinery for Within Products both the We of demand.

and distributions for this on distributable with strategy segment, issue cash all expect commensurate $X.XX with production distribution XXXX X.Xx we to adjust or quarterly In HEP the flow of basis. levels of at committed have not $X.XX demand greater, EBITDA. enough with leverage expects to we X.Xx grow per coverage market reducing ATP, expenditures to unit flow an time. focused hold demand X.Xx and At to expect transportation crude funding and annualized XXXX, constant distribution to to demand. or cash the goal Similar free see fuels However, Refining our remain We we to maintaining for capital to terminaling our services at on oil. transportation guidance do within and visibility underlying

In Artesia, segment, to our sheet gallons with projects the million units while foundation. time diesel range at New Mexico advancing and our to strong a We our end and cyclicality of in our ability ended HollyFrontier high Renewables maintaining complete withstand to in track renewable diesel in Wyoming. the and diesel financial on pretreatment of first our and unit renewable XXXX. of the balance we're budgeted Cheyenne, We're priorities. produce a maintain strategic with beginning over on the a XXX operational strategically performance XXXX We quarter renewable solid positioning conservative

remains prudently performance environmental generating enhancing to while our and on Our our to and operating high advance and our further safely continuing best improving our efficiently, refinery reliability, sustainability focus deploy returns into renewables, transition shareholders' progressing capital interest.

So with Rich. to that, the let over turn call me

Richard Voliva

Thank you, Mike.

million, These the million, diesel conversion costs $XXX costs approximately $XX of LIFO to and renewable million totaling refinery charges totaled inventory in included few addition related be million mentioned, inventory of positively these by As severance Cash goodwill $XX draw impairment $XXX the items. or previously a capital release. items Cheyenne to by to include We quarter a of of liquidation in partially were the earnings costs was which working capital. quarter lower were $X million production. and XXXX. spending fourth fourth in impacted the Pretax table for $XX working full A and unusual manage million, decommissioning from offset better costs asset can the included down totaling million cost charges million capital successfully expenditures $XX long-lived market of able adjustment stand-alone $XXX,XXX. $XXX gains. the press quarter the million of to operations for fourth of year found HollyFrontier's of turnaround our in flow quarter, $XX and to

XX, our billion December of liquidity our $X.XX credit total billion. stood Along XXXX, at billion, a of with balance over undrawn comprised unsecured approximately cash $X.X $X.X of stand-alone facility. As

net XX, XX% stand-alone ratio and a December ratio of billion of had As of with we X%. outstanding debt of $X.XX debt-to-cap debt-to-cap

During $XX owns fourth paid of during XX% representing distributions $XXX million. of LP million the $XX with declared HollyFrontier close. we HFC limited HEP's HEP $XX.X fourth and as million units, HEP last totaled the of by dividend a of market share, a totaling units partner $X.XX over quarter million. per night's quarter, received value

We original under Looking the an to from million that ahead CARES to and our and Specialties; to recover tax million half loss expect $XX at $XX to now million $X renewables the for million million and million our to during recovering to the $XXX a $XXX into respect renewables to estimated between we guidance maintenance of expansion million $XXX of unit first Cushing for in still $XX investment between $XXX for for million XXXX, our versus spend invoices we We refinery to payments of $XXX $XX and XXXX. At Act And million our capital, cash spend capital, $XX million XXXX million in processing million made which $XXX operating Connect tax includes Lubes were slightly specifically net to to million we Refining, expect in spending, and in segment, of have to guidance to million for spend at XXXX. increased to from HollyFrontier $XX million. additional carryback $XXX capital joint account and capital anticipate the million $XX catalyst. HollyFrontier benefit timing $XX $X million With to venture. $XXX turnarounds HEP, expect in $XX million in XXXX, turnarounds. for million

to pretreatment activities reported Beginning Mexico, HollyFrontier's the in Artesia, construction HollyFrontier's of diesel renewable Refinery Corporate in other conversion the and segment. production, of with diesel the quarter, are along renewable New and in with associated fourth units Cheyenne

to range $XXX Refinery For million, decommissioning the of conversion and Cheyenne we related costs in million $XXX operating the to million. which to be fiscal expect year expenses to in $XX severance million range includes segment XXXX, the $XX Corporate of

ready questions. And with James, that, to take we're

Operator

from line with Our question first Instructions] comes Suisse. [Operator Manav Gupta the of Crédit

Manav Gupta

envisioned that X think Back Rack goals Rack should EBITDA then PCLI generate business, positive EBITDA. the was the and I So of key Forward break the on when even you should

think of you have in Rack Back, your quarter, was this neutral. terms in Back I goal achieved Rack So

XQ better. XQ trying understand forward good, the Just to but on side, Rack was was

are or about XXXX, of a we when be perspective, specifically a rate the for on thinking run as a a Rack better the XQ from to rate Forward would be half first XQ better Rack relates guidance, so run could Forward? it And guidance

Richard Voliva

Manav, Rich. it's So

quarter. a happened in of that of So always the a in a lag little mind couple bit Keep here. fourth things there's

the Rack Forward quarter. the absorb on prices fourth oil rose So And base side. that obviously throughout to had we

the that So some annual also impact did quarter, there around is always year-end the and seasonality period.

things we is -- the fourth this X the your because the very said, But to drove strong, Think can point point, lot volatility So obviously demand are guidance cannot at Mike to right, really we that market. we a still in seeing quarter. we're time in issue of as

the million to in we're that run, to long-run long our expectation $XXX like our business, in million take going $XXX So is this you and that do belief. EBITDA I'd to back of

Manav Gupta

Rich, prospects think the with Okay. our here And you is, business, that up diesel had a when I returns range expected. quick you given of had out renewable of kind follow-up a of expanding you first come

prices. but feedstock the X few on up the moved global in return significantly the recovered there different I'm have have HollyFrontier rate any trying prices moved change been up, has things sulfur to happened, RIN Now their a has have of just moved the since understand economy has diesel so ultra-low prices crude the calculation, up have directions? the internal as on parameters moved of have perspective return, as considering from then,

Thomas Creery

that price seen all boats, as seen our was. see what's Maybe marketplace, crude plan to as seen this along rising to at up earnings we our variation up is really have Yes. and with tide Manav, fats, a price. profitability now what on look on seen put have soybean Yes, in price. in RINs sum that in models but We've what basis. well. we oils. oils oil taking lifts we and and could the is going RINs And Tom see regard we've would go up and Everything be a happening Creery. to into in I it don't the go-forward a as much go it original that up We've

So...

Michael Jennings

now not there's for the probably other Yes, the longer persists is piece that just that of blender's credit original expectation baked And our outlook. than XXXX. that an into tax was

of So overall, that. higher, at least because

Thomas Creery

of only to and thereafter. we 'XX the blender's our modeling, took end Yes. initial When tax we credit then did forecasted X

Manav Gupta

on is will of if EBITDA tax Biden considering the of administration which stance you, to $XXX likely the And million that's extended, right? straight blender's credit renewables, most be

Thomas Creery

That correct, yes. is

Operator

Our Ryan of next question line Energy. comes from with Todd the Simmons

Ryan Todd

was side? on diesel the can follow-up year? closer of the you CI completion for talk feedstock to plants, pretreatment ability revision low to Are access guess, bit you business. And conversations I will And establish your to a move some RD your that aggregators supply renewable the CapEx upward Maybe of for ongoing on of then particularly feeds of about as can with efficiently feedstock a in about to your quickly, confidence allow? your driver chains the feedstocks? a range this what little talk you in efforts you the

Richard Voliva

it to questions. to Ryan, let do to I'll other the -- hand number. I'll your speak Tom me capital

of flows these timing versus 'XX. 'XX of just in late it's some the really, capital, being and on cash invoices So

here, So million XXXX to spending million our up in some $XXX about ended instead to guided give $XXX color of we $XXX you million.

$XX of in about out just that But by the we're about million door timing. really number. 'XX. short cash up hence, has guidance 'XX So for gone our And

Thomas Creery

several at. about could as is as up. question contracts feedstocks in the soybean oil. as both are your in agreements feedstock have providers that entered and including corn And at terms soybean to been we've talking entered you the oil. degum opinion looking feedstocks, feedstock as have to well to local agreement, disposition imagine, soybean side, agreement of we've California, forward. pricing already in favorable on we offtake We've what guys we well other one for we of that's got oil, degummed that Yes, other on go then regard in tallow place Ryan, as oil refined inked and into our the And well into very as

good in shape. So we're pretty

And been co-ops. problem also when to months enter to still the feedstock supply -- that We available the on is We've anybody, about talking of part rendering some feedstock to that for talking difficult we're agreements anybody issues. into has away. we've plants, been just these that seeing XX we're of it's

mechanical that And things both faster to closer to will we completion, some happen and lot get see and there as these do of we're operational, a business. they

Ryan Todd

although obviously cut into Great. that what appreciate margins to can about side. mean, the you're distillate of is significantly year-to-date. out color. RIN outlook going the switching next pricing I that. what terms Maybe refining up your quarters I gears probably are and refining I is to And mean, couple market for seeing dynamics? you and there in talk of of gasoline some

Thomas Creery

Sure.

was gasoline products, demand In III. total. on and gasoline that say the worst, XXXX, would been to has off PADD X compare been and pleased polar in X% the recovery was into before of where situation, vortex demand it bad, Group probably terms hasn't in or diesel, In was we were When X% this probably we pretty our went and other going. I that with we best gasoline, refined

the So higher was XXXX. of levels. with XXXX hand, compared on much a than at very we Distillate, other distillate. It or that's all pleased were not to decrease

So distillate was in good demand.

whether to crack, what -- season truck by start will else, or vaccinations, be of hard relaxation on by go-forward And be expect we crops it as both people airplane. prices, improve anything and season crop we're the and in summer. well think around terms to of will With get with the and I we COVID that a moving into to farmers seeing In hopefully, be soybean, basis. this car, they more ag the corn again. the But busy would as plant driving it's as as cracks forecast

we crack of as terms forward. move in help should that So

Operator

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

Paul Cheng

renewable just is of we're that think My end -- be at going I'm budget when at to now, that looking curious the plan the high diesel you range. the

the the when budget. turn expansion risk than your the the say, racks costs upgrade end higher of budget? Woods in years see much higher number out capital what's original much to back Cross, they and you recall, than So ago, when factor be did up that, the of We a and major

risk and big the what's risk? here So is Secondly... that factor how

Michael Jennings

memory. you have a Paul, long

So contingency. At call But we start is risk issuing factor, number, present, these a our of as our for the the completed construction we're are to circuits a field on provide for I'll more ready the ISOs. engineering IFC most field. basically out to piping basically, single we a factor Look, completed, at for end engineering taking narrow as the risk and principal address that. And range basically that range leaving as high projects. range tends them to to which provide we we've start capital what construction of

far and So the initial quite phases engineering along in terms we're construction. of of

at ago, getting simply the If same to prior projects the we project we're as wasn't was time, our to at the And grew. finer contrast engineering it the want confident. more a engineering So the to point the end. but narrowing a estimate. making higher range, And evolve, done years issue from

are We're the the We've So compressors, really vessels, et you following heavy ordering. will, equipment, ordered these projects from fairly process. we're And the major distinct cetera. equipment, near to all that. stage-gate if

and is in all COVID. So The we The complete. the around workforce. to some And that's during reflect on numbers risk different what's front practices COVID have a maintain is of field field fixed we've construction engineering added prices There's construction. that. us safe good, estimates to are largely and down,

Paul Cheng

finally Back other and Forward, really Rack the been has And on quarter years then seems the of Okay. Rack after hand, time, Forward down. several to through, time lubricant. from I challenging. Rack we I the it margin Rack the go like that Back think good that the the And this was is and on ownership, second look mean last in run question have breakeven

believe that be we that and optimistic learned this still truly really have we we we about that last business led you? I different generate EBITDA. more original have than in pessimistic may make for the scale the in million to that $XXX mean, or mean, is perhaps the people after more a are profitable a as and So really we you expectation Do either this is -- I that $XXX can to the something to business this hindsight, years several business? organization necessary to million the

Michael Jennings

is Yes. answer The yes. short

business, Paul. team We this have a really talented running

more and be commodity business. versus to business I think appears place favorable. expectations understands is Forward the a and went the recession, time. oils capable you been to cracks reality years group $XX base healthy get the And a And was constructive industry. have that through piece not now. couple oil in Today's more our $XX, margin for be not difference we deep The going Rack the has that's have group is It between will the of intelligently business, That's X where lubricants barrel. X, vacuum the the dynamic the big a really actually specialties last oil team advantage. through base okay? gas when commodity we that business. a of of expectation. That the growing the be of part markets through in to finished business volatile And

variable, to our say guess effectiveness would the be Forward. caveat and grow I continue margin will Rack it I'd So oils in and and will base

Paul Cheng

of time. base add oil in sum I couple quite thought going substantial a years' that of Exxon a is to

Michael Jennings

depend well, on in we've the will Rotterdam it investment being, pretty their Coast, plans. to continues I think on own we're that stable. I But What the for come, Gulf time think seen Paul.

Operator

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

Phil M. Gresh

RINS, you diesel obviously, I kind see ongoing up share some a And sure as year -- is prices rates the I'm go? starts could on getting refining this impact your expense just renewable is start think XQ 'XX? if it's going whether we're over just and we later to RINs we there? impacted feel at question and kind Any rates one then the look about mark-to-market, on view -- of or the capture what of lot, RINs where up the like first RINs dissipate into do The there. XQ, effect the will just of you color capture

Richard Voliva

it's Phil, Rich.

mind methodology the impact. me not weighted that inventory we Let Please honest, be use cost capture do fourth a it keep here. quarter. To was in big that in the average

spot So our cost market. RIN the lag will

the to RIN in $XX our about So market about and expense the hand And is outlook. quarter million Tim it quarter. let third to fourth $XX the versus me Tom in talk million

Timothy Go

Yes.

Let this is -- Tim. Phil,

had Let mentioned a $X.XX that Mid-Con. margin, me in Mid-Con that That mention the translates the just a impacted specifically in the gross about remarks, on was capture costs revaluation to well. $XX.X We as year-end million, opening his barrel. Mike

the And the so valuation, Mid-Con. been without would have that XX% rate inventory for capture

XX So the on general X that X I margin. -- X what's -- total on of think, gross XX

tend margins lower some in as that cracks higher. the And the the cracks so when We further fixed more capture also impacted impact gasoline than are you know, the of when contribution Mid-Con. to are percent had capture costs lower, rate

were affecting that the issues were those the So Mid-Con.

the On Southwest impacted country. COVID side. in the of the was fourth the with West by quarter area Demand in more in that area spots hot the

So than on contribution, probably gasoline normal. margin margins specifically were impacted more

Southwest. also had the costs laden margin We capture the that in crude impacted higher

Thomas Creery

going So -- distinction to get here. trying RINs figure are Phil, where and the of from out dubious I

-- me we've in let seen the what what So -- seen start saying by so we've but far. market

because why DX was to retire when short is that can than are the is of I closer our less going that all demand, to DX DXs a the the result, say And that time, reaching be gallons and without SRES declining we're think XX RINs start of marketplace RINs it's climbing DXs, are marketplace there going fear people happen -- they're that DX to using a that DX -- I you before. to what as going a to lot are is obligations. getting opinion it and with And in what's gasoline see billion think is we spread that the rising, the required. in

happening with lot prices. a DXs. takes up. soybean has hell soybean the been do is going that with then to And what the the And price So rising that's question,

is seen And an bushel. demand higher South $XX we've What soybean. a gone because American of the supply. outbreak, China. And they they're seeing population pig weather to barrel basically a replenish also $XX.X from from basis, bushel swine We're -- on flu as of impacting bushel having some it's their that's

forward, that a is of lot market. baked going there's the already into So

So -- and driven now. are to factors those the main price is it that's where the RIN

I any think prices own get basis do are from that is event on DXs the DXs in spread help and and the that's moves their a we to going more generated just further demand the to on going of DX gasoline as going then forward. do what temper more as result RINs the there's BOHO increase thing the the supply the it and

that's at in decision a time. to point So than political this of be relationship-driven more a going

So these the increases as lot I then the increases I go to of don't big think are DXS the see and year to seen through into we've think a we DXs date. built marketplace. of the on factors as kind those going already we're

Phil M. Gresh

Got in an XQ it. a to expectation would expense -- taking the with XXXX? what where effect, you have they you be stay clarify I appreciate are, just of the RINs or that. Rich, estimate prices or lag if do shot at

Richard Voliva

No. trend It would higher.

to would trend this blend right, around lot directionally, with that volume rates. spot rolls prices. Assuming a of expect you higher higher But and

Phil M. Gresh

higher helpful. from this you you color seeing throughput at those of for impacts point? refining the Or Okay, okay. side gave would on any And headwinds natural companies Are XQ. you Or OpEx gas. the types there be more about any just guys? have of for muted then Other talked

Timothy Go

Phil, is again. Yes, Tim this

Our Tulsa already and vortex. with Uri polar Mid-Con plants part planned the associated actually maintenance. in Storm temperatures were was in the coldest of

effects we had outages that, that that completely storm plants of than But a occurred. third had will X And so be normal some back the plants the extend just normal, to Other the one back longer. unit individual will the the to are this downtime there later week. and bit little basically other

mentioned day in impacts. prepared the remarks barrels to of both So Mike the well the cold unplanned the and a weather as reflect guidance as planned XXX,XXX XXX,XXX maintenance impact the that

Phil M. Gresh

would you as natural And specific that a gas price well? there effects anticipate would be

Richard Voliva

extreme call we -- right, one Not were very transitory. but that these out, mean spikes, we they I were Phil.

nothing So as offer now we'd guidance.

Operator

the of comes next Barclays. Theresa Our with question Chen from line

Theresa Chen

LSP market Wanted segment. in industrial if Personal what to terms great. details to outlook of is to is demand the turn there here, transportation, further the And in back Care seeing level? just how in would beyond guidance segment volumes and And to related what could you Is end again? you color doing? from something share to it turning normalized to your a terms needs Is of else? Any more of what there for a issue happen matter be you're

Bruce Lerner

markets, care, the of is terms related traditional type also demand those personal In very demand markets and for pharmaceutical food robust.

which high encompass and We actually have asset products, white those oils, petrolatums, utilization in facilities, waxes. both all X making facilities,

and coronavirus way refined really and the heavily impacted in the were. was robust diesel and and so same gasoline remains demand by that very not So forth

terms Rich any follow questions to refer to going guidance to related to expectations of In I'm on.

Richard Voliva

I getting so Theresa. would things as Not much to offer it's there, better. Bruce are right, mentioned, like --

as similar we're kind seeing think what everywhere. of I

economy here. expect better lifted restrictions the get or the Coronavirus to as it on We

Theresa Chen

capture? area increase time advantage the really have take crack? were implications on around, and of for to Got it. during that up your call if the on Lake Salt that And wider from entity. And following Phil's The questions in that don't earlier impact, just questioning, will the throughput terms in be believe weather was does able you on particular, of midstream I impacted, just what

Timothy Go

City the probably slightly stronger running a you're isolated normal, demand probably Yes. more we'll terms Theresa, a so temperature Lake and City impacts than it's in Salt but as and continue impacted storms, the the Gulf storm. to least of Lake see is was from Salt from what the result thinking. maybe of

Richard Voliva

he Theresa, unimpacted, storm. Salt right? or So was work it's bad, really market Tim's no has was there Yes. Lake said from valley entire the when the good at To frankly, point, Rich. impacted dynamic there,

Operator

Holt. Tudor, question Blair Matthew next comes the line of Pickering Our with and from

Matthew Blair

side? diesel Was for how Can guess construction start-up as unit? the impacted terms exactly you winter the Artesia you And what talk it storm? pretreatment the RD I is in thinking of this by as about on renewable are well progressing

Thomas Creery

Tom. it's Matt,

winter in Looking at of degree year the part Cheyenne, middle any Wyoming affected a polar much up country. other of great to the Cheyenne. the the wasn't wasn't and in middle by it than it it vortex that and hit Cheyenne was is different every

going is construction So well.

We in dirt. permits We're go lot rail We've facilities are place. the a for we're putting -- the got in. leveling moving of to

And there, effects from delays So we nothing expect in winter of that forward but again, on the Artesia, any there major. as don't standpoint we was construction. move some storm,

going We are proceeding up. We're Rail lines Tanks are making construction. good progress. in. with going are

We on schedule. are

your as in to time. previously don't deviations we meeting schedule point any And released from question, at this see ultimate the

Matthew Blair

good. then came forward roll that we your a the into OpEx believe $XX Cheyenne. without rate side, good can And at I XXXX? West in, on million Sounds refining Is run that

Michael Jennings

Yes. gas of year-end -- the in fourth saw third typically few year. we probably a natural do price We we hit accruals the the in seen We quarter bit had that saw at had higher little of what quarter. us a we a the than end as

close. basis. what very than normally normal run maybe a But bit we'd higher probably it see rate So was a on little that's

Operator

Our the Doug Leggate line America. Bank of question comes next from with of

Kaleinoheaokealaula Akamine

for Doug. on already but Kalei is got This I've has been here, couple. lot a A hit

farming ever about you And feedstock, you i.e., wonder comps? for guys pricing? market-based if of guys your from guys about diesel own present the as thought renewable sourcing if contracting upstream that, you've your going insulate the strategy, which you are what considered So would thought feedstock I have plant-based

Thomas Creery

But in stretch at of is, plants would Yes. point what stopped and the I be we've at going in upstream. yes, is us there. basically terms A looked we this involved farming in get to point at Tom rendering This answer that soybean, at Creery. into of think quick looked it We've have crush for time. a cattle or

chain at it's that's -- do looked would business. too constraint upstream, plants, said, do in that So want it if our a we do be we I of value would going -- like crush but going forward, to go might we part far invest in have something because we to and the be

we So at that's so what looked far.

Kaleinoheaokealaula Akamine

Perfect. an including Can plants. capital renewable the update sustaining on the you provide diesel also

Richard Voliva

capital. sustaining generally Kalei, So

We it, year across a it's driven obviously, corporation. lot volatility, continue that, of a call to by With schedule. see $XXX $XXX turnaround million, million the --

The So will lot renewable the in costs business add terms capital. probably Turnaround a not is that are of reality relatively X-year the a sustaining diesel be in cycle, average. would there minor.

do You refinery. a anything refinery. fuels But a cycle doesn't catalyst of it like a of have look change out turnaround to similar

Kaleinoheaokealaula Akamine

Yes.

So $XXX include million turnaround, to million right? the $XXX

Richard Voliva

Kalei. up, breaking you're Sorry,

Kaleinoheaokealaula Akamine

the correct? $XXX The to $XXX million million include turnaround,

Richard Voliva

Correct.

Operator

of Instructions] comes question Our the Cowen. with next Gabelman [Operator from line Jason

Jason Gabelman

the another be or advantaged of that maybe benefit an capital working XQ. a the the diesel just there drove you just capital then sell course back on renewable just to the of a Or you question, secure the mentioned One, benefit? could of interest reverse questions. Maybe Is What offset on is 'XX? completion, desire and business. some that And plants? do get kind costs the closer to over to Two renewable and second diesel that in from as angle that feedstock. that durable stake the in to Yes. of to you helping expect going some

Richard Voliva

-- me Rich. let it's Jason,

me to capital. Let speak working

So managed well in really the down. fourth obviously, we barrels ran inventory some quarter, at

permanent continue In realistically, crude flow rising given is right? Cheyenne stay We tail a a reduction, the working of vigilant obviously. price have macroeconomic continue inventories, situation, which our crude very end working benefit. on to to We'll see to the cash capital, to and ergo, see we're going ergo, benefit optimistic you're so about rise -- the capital capital to the environment, prices expect we we would economy working expect would

Michael Jennings

We're the a out, we're conscious capitalists, time, developing that and part investment a it same of high trade on At this Jason, at portfolio multiple. things committed this these company. as our to building we're of and proud renewable the side.

evaluate So time. that we're to going through

I think than running and Corporation. we what to we we that have any Hollyfrontier complete know to demonstrate the value a be value the fact is separately recognize projects, real other before that alternatives of and as part up get them to need

markets, of mode aspects business, looking and not spending commercial any and So building the it. And at the sell we're the and it really for building this we're being, feedstocks this supply of chain point. obviously, securing time time to in

Operator

Goldman of comes Mehta next line Neil the question Sachs. Our from with

Neil Mehta

cash out business midstream midstream fold in HEP about and and want strategy less over to years. is the question you we First not whether here around see next Is this about around couple the just more the just and the pay for well? line, distribution, line here business the as focused basically flow, opportunities run the the free top necessarily to on goal top of

Richard Voliva

industry. Neil, the position interesting midstream business, it's in now Rich. in No, in I an in think we're the right general,

to months to to of then term, running XX We that's X.Xx. our the is next it, then Pipeline us and get to getting Connect leverage here focus the to up have call units last going XX years, position of coming midstream to a the delever go incredibly our grow distributions, that. reality great feels Cushing opportunities target in and and are over for those. We'd or to repurchase think X.X rate So continuing to put either pursue to grow space flexibility business, the the it to and like like is business. there we're out increase The the ahead frothy X was if near

there optimistic we're news increase to we be isn't, see and value, So ahead don't will is opportunity that distributions. creates But an go good we'll there if the grow opportunity. unitholder

Neil Mehta

between on where of also post need then competing back but thoughts U.S. of demand OPEC to freeze-offs? for On here we coming key Tom. number the just comes do crude sustaining your utilization WPS, But follow-up you on. And Brent/WTI, a $X line barrels on Or production do the in $X for outlook on are coming to And back refining kind path your horses perspective see be the this as differentials. there a sight of might pipes level? with

Michael Jennings

$XXX TI, short at Neil, to a move Yes. million not think term in million we're probably On this I that of looking is forward. lot is medium as what to Brent to do the And differential, I expectation range we the only to is on $XXX have is with $XX Brent what WCS in and of move on differential differential probably the we the happens trading quotas WCS guess our is but OPEC forward. the as Ti to $XX. going

the For seen into rise the rail fourth WCS year, of we've movements and what of seen and first in Alberta this on we've of the quarter. remainder out quarter the particularly is

because going on economics put floor real Coast. and differentials Gulf artificial of that's rail the a getting it an floor to So to or

pretty So Coast, delivered part OPEC good we still that's the in we to the and see and Gulf do pretty numbers prices Venezuela good and demand situation.

that So the to to remainder that's Midland what we're looking And $X.X we differentials, for finish as from forward. we of over off that this Cushing $X crude continuing and anywhere for on to trade see year. just move

Operator

at questions Jennings further turn Mike time. like no I'd over the call back comments. final are to there this And for some to

Michael Jennings

Great. a well-equipped and investment-grade is Thank really you all very participating liquidity billion stand-alone this you balance much, ready us with and back its core stage sheet, $X.X fuels then in our of with business. for really summary, thank to In morning. come HFC

Our which I for new our resiliency are we're very allow solid post operating favorable power quarter lubricants think, to business projects earnings a and base us and asset in market a earnings finally, And really our and, the of going board, as the term. environment. oils lucrative participate renewables continues long our progressing to another strengthen further show is base, diversify to and strength in across

today. you Look to talking participating for thanks soon. to forward So

Operator

time, day. your wonderful this And does a Please Thank teleconference. conclude lines at this today's you. have and disconnect

HF Sinclair (DINO) 24 Feb 212020 Q4 Earnings call transcript