DINO - Earnings call 3 2021 | HF Sinclair Corporation

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

Operator

Welcome to HollyFrontier Corporation's Third Quarter 2021 Conference Call and Webcast. Hosting the call today from HollyFrontier is Mike Jennings, President and Chief Executive Officer. He's joined with 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 call is being recorded. pleasure President the of my Craig over now Vice Biery, Investor is to floor turn to It Relations. Craig, you may begin.

Craig Biery

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

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

disclosure with remarks, please statement harbor in proceed safe today's we Before the release. press note

judgments harbor the or statements There it's In SEC federal could statements to from that statements. be management expectations, cause securities factors are made These our differ predictions filings. summary, expectations, are covered regarding forward-looking under provisions laws. to those intended including many in results the are safe of noted

of today's also note measures. longer may press transcript. financial may the earnings to discussion of rereading on for please be measures. webcast at Also, time call the provided see call include release information of Please reconciliations any GAAP the replay no or accurate time-sensitive non-GAAP any The

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

Michael Jennings

everyone. that Good income $XX million diluted Today, or million. These per reported special net income third morning, net attributable of to $X.XX Craig. Thanks, share. reflect results $XXX collectively quarter increased HollyFrontier items shareholders we by

the segment and the produced share period stronger $XXX for loss loss the to last to $XX same serve. This gross was consolidated refining was third we million XXX% to million, of reported the Excluding the million quarter quarter increase these year. same $X.XX per income of EBITDA million of share the was compared for Adjusted million markets XXXX to net for due $XXX adjusted for items, XXXX. of a or compared $XX.XX demand adjusted was the diluted an $XXX quarter a $XXX per primarily diluted third refinery period product margin increase of across barrel, $XX an net XXXX. million period compared The or $X.XX EBITDA versus negative increase in third per

throughput guidance mid-November. of XXX,XXX Tulsa XXX,XXX scheduled on at crude turnaround per was is turnaround we quarter recently began day beginning work in was October, barrels completed our At of Third budget. at approximately and Navajo time the to on We planned completed Refinery, refinery, a to XXX,XXX. above the significant be which our which

Lubricants EBITDA reported in Products of reported million Our quarter and segment last the period versus $XX same for $XXX third year. million Specialty the

adjusted $XX million Excluding on plant, of $XX was sale Mississauga gain an million. at EBITDA the our property

of earnings of to see business portion this due combination global margins base limited supply a to Back continues outstanding a oil and factors. of number Rack demand The driven strong by and

the for remains and quarter, finished the EBITDA by region. of million million supported pipelines record the on quarter both to in strong. base HEP third reported Holly year. Partners of quarter volumes solid third and Salt adjusted Rockies products volumes In in compressed through oil sales demand the this Overall, encouraged the year quarter the Forward solid increases, by in and business to price we're year, Rack the strong optimistic and Specialties rise we're for prices of we'll a portion, as base see Energy $XX Lake the in delivered compared finish earnings City rapid the results oils consolidated $XX that performance and last continued the Lubricants despite margins. the Frontier

During supply the as third-party which crude will the Connect of refinery. primary providers pipeline replace we project, completed our source Tulsa Cushing quarter, for the

an cash $XXX.X this $XXX closed of Earlier update strategic base business I'd of value the million, an closing $X.X cash on our performance. based we Puget acquisition attractive and of price liabilities historical Sound closing announced multiple inventory other refinery's net Xx of price accrued week, consisted on million, represents EBITDA for and with a Now acquisition adjustments previously aggregate to financial X.X the purchase $XXX.X on of like million, of of estimated million. initiatives. Refinery of to inventory which hydrocarbon consideration This

to refining strong the we skilled and refining base. We're has business. and believe Sound's premium facility, sources Refinery operational of HollyFrontier Sound at our family. record to into supplies existing that Pacific I'd asset safe and responsible really highly the region complement to performance a will financial The and operations fuels workforce committed environmentally continued transportation the Northwest of Puget Puget like welcome The the refinery

In I'm progressing day be later project. run we is X,XXX ahead per pleased and first conversion the Giant our renewable to the we of expect batch diesel of on barrel diesel that unit end complete feed segment, our week, are year. to The expected to renewable by this Renewables of schedule announce the mechanically

PTU a of Given XXXX, the refined unit to soybean other New ahead between mix of run current we pretreatment in oil -- allowing favorable at Artesia to schedule, completion and in economics quarter first facility, the the full the the more prioritized feedstocks. feedstocks, of us located and we expect of complete quarter now a Mexico

now Artesia of in to unit is completed renewable expected be XXXX. The diesel quarter the second

mid-XXXX, announced the and are of Sinclair, and spend we of X regulatory acquisition expect waiver a of total or We to budget all closing satisfaction all for expect to $XXX In clearance to projects. $XXX million subject conditions. close regard to our other still assets on million in still to previously from

our We logistics diesel, base and look with branded renewable refining forward to businesses. further marketing, Sinclair's asset diversifying

will August. executing to strategic remain forward, announced shareholders we plans on the our us allow these reward Looking believe we initiatives, through in return which previously capital focused we

call the With that, let Rich. turn over to me

Richard Voliva

Mike. you, Thank

the unusual million costs, offset As acquisition which $XX earnings property million Mississauga and press flow our driven to few renewable refinery release. Cash reflected million the of the production, on which earnings start at conversion previously operations an $XX $XX gain by and in in by of severance included by was facility spending turnaround -- increase charges million charges turnarounds me, $XXX totaling of impacted found sale diesel included, excuse related quarter, Cheyenne a our A were mentioned, our of million the of planned partially of $X Navajo at positively pre-closed Tulsa table these be third and working refineries. million to a items. Pretax $XXX,XXX. third $X items from approximately the quarter integration can capital, in

HollyFrontier's expenditures stand-alone capital the totaled for $XXX million quarter.

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

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

million tax XXXX from between the -- in Act the million recovering HEP HollyFrontier of close. $XX LP HEP partner of by $XX anticipate XX% billion in last during of carryback HollyFrontier HEP's during under and owns of limited year. million. loss totaled me, XX at third XX.X units, representing received night's excuse $X.X a as We cash fourth CARES distributions market quarter units $XX the the million benefit this quarter approximately value

With $XXX $XXX We of guidance due to are and decreasing at respect in million in full execution between and now based we segment reduction time $XXX capital guidance, to million Renewables spending to and lines project XXXX on some our in strong in for year Navajo spend million. of scope XXXX, renewables the million updated the expect catalyst to bucket, to our overall the turnaround. versus turnarounds specifically the $XXX previous

catalysts, now our expect remain $XXX versus the to products. XXXX. spend projects still guidance budget, We total, million the be million million capital incurred anticipate of HollyFrontier lubricants $XXX million million expect at $XXX $XX to between HollyFrontier on We $XXX million to $XX million to $XXX specialty between renewables and and $XXX Refining and to turnarounds for $XXX $XXX remaining In to million in we to million. in million to at from spend previous

investments we Cushing to $XX and venture, $X joint in to reprocessing capital, capital, spend million which to million unit refining expansion million HEP, maintenance includes expect At now the $XX completed recently $X and in for for turnarounds. million Connect $XX million $XX million between our

speed and product compression Forward base XXXX, have finished segment. short-term in record of the their to increase Rack reflect margin more oil importantly, and in side Specialties Lubricants the we the guidance updated of our our Given prices

now of to operations $XXX $XX We $XX between and million in to million million to expect million earn $XXX EBITDA. income from

at We in the levels based to remain favorable Back these expect on supply-demand the elevated fourth quarter dynamics. earnings Rack

segment the day per fourth barrels Refining quarter crude refinery which XXX,XXX in of we and XXX,XXX our between of expected Within for run volumes XXXX, December. November includes expect Puget oil, Sound to and the from

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

Operator

Suisse. Manav first question comes Instructions] Our from Gupta [Operator Credit from

Manav Gupta

results being and And is, number given. from change? we disappointing. $XXX about sentiment trying why they're first start asking have reason anything at my you there time, high Mike, a And you million gave to and past, buying when sour pretty for question this heard majors the on question guidance a like $XXX that I'm has is acquisition. Coast in assets if the major. the million. a coming asset that's guidance And moved Puget from I'm months X And Sound us to actually was guidance in, Rich this the is to that being just understand to acquired West ago, And the

Puget changed Sound anything trying the guidance for So understand, on acquisition. to just your has

Michael Jennings

levels. probably Yes. below can numbers, Manav, the out trajectory sticking demand probably But pricing. probably is you is with in RINs The we're see recovering, still is our biggest upward. as variable market the XX% guidance. there The XXXX regional X%,

we better, more, asset like guidance. to and we're it the our know to gotten we've As sticking

Manav Gupta

of the question, some very Reuters, which supportive of supportive we And since out of a second were put there release from DX. which RVO RINs, not numbers, was kind you had so out actually but DX, mentioned

difference a once but to if still you little understand, start, I DX, be R&D be spread as there's DX, short Now a DX But net price DX. short long your facilities DX. you'd maybe between would

you could goes your maths one us So premium obligations. Can still up, through more walk you just all time? meet that DX

Richard Voliva

Rich. it's Yes,

right. you're yes, So

prospective renewable online. We will of RINs long DX diesel coming facilities be the

DX brings price more Sinclair us. a number DX DX beneficial. basis. price be Mike to to, long balanced an our on obligation And the alluded a is absolute higher To basically transaction once Puget short closed, little As versus your perspective, is will DXs, we from then and point, Sound

Operator

Your next comes Ryan question from from Simmons Todd

Gap] [Audio

Ryan Todd

you So any the and both what And since If including thinking acquisition how timing? in refining thoughts environment you feel your flow PSR to announced $XXX lubes about quarter. earlier million relatively the the performance are dividend? expectations dividend on and year, this to refining the continued business, see in the do you restarting of forward? has going of this need cash comfortable holds, to that constructive And exceed

Michael Jennings

Yes, for question. Ryan, the thanks

and quite building well. The as environments lubricants well, are for is both performance both our operationally right. constructive refining in us You're doing and

after dividend laid capital in and we the forward, August, guidance the looking suggested the return laid that is repurchase hiatus we plan guidance. So of XX-month out out, we're in as to capital that return which sticking the that on

how the develops much there, that it we're we're lean we constructive. how we And see. sticking go more anything, out. So from plan as we've with if laid very forward, aggressively we'll But it into

Ryan Todd

Great. think -- that's XXXX of about And as we -- terms I got diesel on pieces about clearly CapEx idea just or a as maintenance the coming a I think rule matter helpful. good on -- of your well? CapEx, a of as in kind of a what any like CapEx, I which good is in look moving number of in a we thoughts capital? kind -- And of timing? down, of might XXXX as couple CapEx, the is What's then comments gave guess You've some XXXX maybe wedge capital renewable updated what's that maintenance portfolio. growth just for mean thumb high-level the you we guidance and for guess, that lot

Richard Voliva

No.

on yes, range. overall to $XXX your So within million point to still renewables, are $XXX an projects the million

will balance versus level, 'XX we'd a capital 'XX. XXXX. spending and decline So turnaround expect flow that At into to spending in high

expect to in guidance formal December. issue We

have for in a some we'll So few numbers you weeks.

Operator

Phil next from Your comes question from JPMorgan. Gresh

Phil M. Gresh

update I feedstock at latest on in looking mix things. the point the thoughts question, at, on are First the you're time? renewable appreciate of What this your kind diesel of side

Thomas Creery

sticking still one. We're our Yes, on Phil, that this Tom. guns to is

good Cheyenne, make to clear, in just this at looking For time and have we shape. and a stocks of tallow we're we're at a soy for combination start-up, secured it few and

the degummed We feedstocks, buying best doing buying And on haven't analysis the basis this trouble material. have at to an both because we're just PTU CI price ongoing at any the time. feedstock point low we find look it's us, up, as feedstocks. not in than had about value for additional And anything will else and more comes value that

Phil M. Gresh

guidance When given. proxy the of just for filing, we Okay. the bit Got it. had lower the the was question. presentation read than you one through then slide company your pro And forma EBITDA a

So was think thinking how I kind versus about of forma should would suggest be your was just Like, mid-cycle anything we there? conservatism stated. pro that we guess, about or you what

Richard Voliva

Yes, Rich. Phil, it's

time. important the best a time at in was it's come that July, frankly, forward views market we in we affect performed based our with emphasize view snapshot and the has So and that had Clearly, that, could and pointed. our was up where the best it than But were July, it markets point mid-cycle. to not does from on market better of curves largely

Phil M. Gresh

Okay.

stick of the in provided kind So mid-cycle with you'd slide the we presentation... suggest

Richard Voliva

segments earnings prove third to our point And Absolutely. above in several quarter that already. further, obviously, were mid-cycle

Operator

Cheng from Howard Weil. comes Scotia next Our Paul question from

Paul Cheng

down an need should as the the midstream, we're make rolling would selling or point, for standpoint, control at sell and questions, at your don't looking does in. and if Mike Two the there's trying deconsolidate? MLP. to up. That's maybe the When from roll stay granddaddy, corporate people and and you And just either number really that HEP, you first And the the this really it be or to just a more to that you in Rich, that simplify happened it and it is consolidating it question. some independent corporation structure transactions please. sense advantageous of

RIN as throughput strong question in is lead anything is a say, that second there if to to a The overall is good well third see And price base strong. as for related the quarter going to the use forward? now is so capture quarter need such Mid-Con margin to is want region other strong than, is down really I the this a Mid-Con you the the result.

Michael Jennings

Okay, in to just will to their our and egg our supply their business going on. that I assets Rich Paul. start and ownership question We're integral it among and with around and deconsolidation. to use connect of us. will going ham strategy those address the sources to We're HEP we how markets. are I as assets take refining terms

for to very I'll the own deconsolidation or of assets. us and with ownership. of The strategic around speak operate So ask structure to retention those Rich MLP.

Richard Voliva

Thanks, Mike. Yes.

discussion here value thing So look, up, the a amount the a transaction whether we're look, an finance the make Paul, for market shareholders. is, for the of This the I to HEP the and accretive monitor corporate to probably and think financial we vehicle HEP whatever. think in that situation we financial respond shareholders. to look, going our essentially like we'll by any demonstrated our transaction. is for require as would incredible Sinclair right best of But consolidated vehicle of do rolled to cash, shareholder do thing But is continue better which the spoken a has

Michael Jennings

sort The second are around... of lingering question, Paul, any was, good there unique guys

Paul Cheng

some first? more ask I just Can questions

Michael Jennings

Oh, absolutely, Paul.

Paul Cheng

up, mean, the my why of Rich, issuing PSXP, roll it share when the they that exchange just by you if of in HEP. -- lot that -- take to say want X a did you PSXP cash, for you I

that's yield So have obviously, they you cash. If even any RINs dividend after have anything higher more then that on have you than dividend the mainly didn't guys, yield. they a it a still probably seems is higher dividend

you're will standpoint actually going-forward And improve your basis, cash that so on from rolling flow? it up a

Richard Voliva

the math We math. done live. we've So Paul, keep the

change To would Like per would could does it for dividend Obviously, colors it. share dilute this point, cash HEP That does, between you're us, change kind we've That continue got it The a yield and we here. down not it and HEP. will wide but path this look, For basis. HollyFrontier transaction, lower trades for headed your currently difference our valuation a our over improve example. very time right discussion. work flow, monitor much than easily a from math not the perspective PSXP discussion. at of to that on

Michael Jennings

Yes.

would comment be other the do levering that to it transaction is think I so. a

HEP HFC on rating. side considerably while respect investment to in X.Xx structure, our lower credit supports maintain our capital target in debt-to-EBITDA, Just the grade of order is

cash have a to and we think impact at us of look transaction and would I it immediate the So for be the both transaction. flow cash levering

better think of is that we to capital our said, Rich buyout HEP. Yes. in shareholders a return As than

was this then question speak And good second good that. to is results I'd quarter. forward? whether ask Or refining around in are So going to in model particular any around rolling for a Tim there guys XQ? this

Timothy Go

performance then, been demand, you've pleased the I Tim associated quarter. with oil base and very is this watching margins, Paul, Mid-Con The Yes, to biggest the we're X of with know stronger which Go. both this factors, going margins. Yes, expect to we gasoline type if Really, stronger stronger this then course, of lower demand impacts Mid-Con demonstrated quarter, you're second and strong the we results RIN and back should volumes asking, forward? on look But also region. performance you margins

So group able barrels as some strong I well. you but the just full we've some not just the markets that some continue an to But think able Seasonally, performance overall And that and demand expect. seeing over trying to do the also weaker and come. the the been last move that been in months. see to we of our of Rockies years direction would we'll we've be of overall, winter in to hope the you're the margins in advantage see in take to X to improved

Operator

Barclays. question Chen next Our from comes from Theresa

Theresa Chen

is period. Or as What the needing guidance oil just is pass for I purely for some Forward the to through ask the persist updated curious, base likely the and is time Rack to lubes the to this of higher foreseeable outlook this your And costs? time -- about business. was there? given result wanted a that portion

Michael Jennings

correct. assumption Your is

and we price ramping price apply faster rate are increases a for than prices in component oil base this business. can that specific pass-through at So

that a have finished of lubricants We fair contracted. proportion are clients

timing. that through, push so the but price It's And there's can't on we the limiters some on timing. not the

between And instantaneous so a the ability impact see oil the versus base markers of to increasing. the lag raise side price you finished of the the

Theresa Chen

Is no on Can And you've to give hoping about renewable understand a feedstocks back us Tom, for the a the sense start of this your it. a Got Are of you feedstocks the for be these diesel are at execution buying was basis? What go point. contracted side, or in your to on bought expectation potentially? had around as bought on basis? that just comments that of and I go-forward you market it kind start-up spot going up? any to trouble units

Thomas Creery

Okay, Theresa, we'll it give shot a here.

spot contracts, We buying not then right would but some now. it's say, a X very I'd And months X maybe of I what long on -- call spot. term buy spot, mostly to are

are However, we opportunities. other investigating

we chain. example, little at For economics get further looking in value back in participating are plant crush the a to

same forward ] we So kind play [ partners regular there's talking Early phases field, whether going of well going-forward that been to move for definitely of us and this those at what's that one still along thing. we've and to it's to markets, become basis. of as as been various at a we on a DCO are We've offtaker. evaluating on the but that in looking role talking we producers time, the could point room also trying learn in we're things and

Operator

question Morgan Connor Stanley. Lynagh comes from next Our from

Connor Lynagh

of together phasing the of piece to trying Just here. diesel renewable the sort projects

you rate should about you kinks targets number? in of time a we et takes operations, that's sort XXXX? run a should mid-cycle as more hit think when realizable sort number the is expect out guys to a some cetera. think through have in out we think there, it So Do How iron earnings we of laid that of the that that

Michael Jennings

us of as realizable we're get the and it. be PTU to we up it's into going second in some to to get That's going half out take the in start Artesia, to the time, line XXXX RDU have and Cheyenne going

second would definitely that XXXX, of half over the expectations. be So our

Connor Lynagh

of, that, Sound. Okay. still just you Maybe of some to that mid-cycle near-term has in market of obviously, a challenge. operating for terms Net-net, asset improved, is do the earnings the are that or the That's together of out just to I'm the Puget RINs contribution near trying you that? think pivoting we helpful. feel about made at you've piece sort put just comments should that? level How

Richard Voliva

yes. short that The Yes. answer to question is

winter overall the that we've with seasonality, the that that understand probably in margin see we've market the opportunity lower. what consistent we You in But given. it in terms particularly versus Throughput geography. yes, there's is guidance structure of and out, put

Connor Lynagh

Okay.

near a So bit XXXX? that but towards the maybe moving little in term, lower in

Richard Voliva

Yes.

Michael Jennings

that to just up. follow Connor,

XXXX. I we for you numbers statement look some the through half think Puget probably are if give up out Sinclair, you put association first of the proxy with help at in Sound will there there. That

Operator

from Roger Fargo. from Read comes question next Our Wells

Roger Read

you like lubes to are Just oil you bit base trying little relative and things XXX%? XX% the hopefully, type Rack we'll normalized catch sourced, more the from your maybe Rack to market, the to call it Back I balance other base transition Just sourced, Forward, in business, product understand to I guess, a don't sell. know, supply 'XX. up XXX% business In in into, this on the of oil understand words, as amount of

Michael Jennings

well engine is own course, our And as base oils for products some externally some our area purchase in former other business the in our covering as the business. do railroad portion our why oil waxes that integrated excess as are are, supplies have and of of a feedstock specialty is into feedstocks we Tulsa, of the the out heavily of we straight formulated that as Sonneborn production oils. base finished like specialty That's sell we base we finish lubricants but oil that business all backward So as in of well. such capable of fully of business

Roger Read

remain bit, oil you're side, the to but the reasonable on most level Forward pricing for part, fairly catches base normalizes the So and performance of market Rack the presume strong? up a now slip little auto the seeing is could

Michael Jennings

Yes.

course, between of that pricing case. a bit in a pocket, of bit right And this pocket the X, of little that's sense. it's the in left think we So little

extent increases So even as up the make Rack oil it recognizes on they Forward declined with we base catch a has up other the side. full the price as if of the clientele bit, the

Roger Read

diesel Rich, -- necessarily don't I renewable this total is say for Okay. but and That's remaining I if guidance or about know But helpful. on remaining, shouldn't projects, to the lower $XXX remaining not. question And of the the CapEx that the remaining surprised then range that projects, end then of thinking affect far of million what's the you, guidance are still wide I'm the quite million, this what the would or $XXX through so it's range? sort of risk factors higher

Richard Voliva

on let take and me to Roger. first I anything, I'll miss this, So Tom a if ask pass at add

there X think now. right I really are issues

We unexpectedly, honest. up universally issues pop be applicable and to now, are supply chain right seeing they

still that's really ability to So and keep by our work And cost. and obviously, site there. extension and out workforce affect COVID on then and can schedule

Thomas Creery

forward going have is here get operations. rain, getting winter ability as Artesia impedes Northern times, They've the we would it impact. other I couple out of thing see into to Cheyenne we're and that in The freezing at that we Roger, our add, and well. expect snow field, had which only our to as to in seen a the workers go in an that's that Hemisphere, Yes. already We've

at unknown point big a that's So in time. this

Operator

comes Neil Sachs. Goldman Your next question Mehta from from

Neil Mehta

Nice here. quarter

Brent market. we've up this seen tight, show seen back and backwardation in And The refining was around first differentials. trade question pretty TI I some crude had we've around specifically

for outlook in environment? navigating Cushing the on crude thoughts your Just the differential

Timothy Go

Tim. that. is Yes, Neil, I'll this take

dips. all you cushion long-term seeing $X We at believe, things we spread are the backwardation, term, line be long-term All TI and Brent we tightness talked if look Brent TI going the still cap the reversal, short structure inventories, But in short the the definitely contributing, the the believe of the range. fundamentals, least you in term. low of in at those to about, that

spread means kind of what look our assets, Brent at of really If helps each though, understand this you to impact the one each it's TI of to look at to it -- our them.

and WCS WCS at Dorado's have of associated in Dorado. it because crude some over and their El spread case, you widened, offset So with I cushion, has they provided guess, the slate El see, as is XX% some

If talked significantly see helping Permian bit ] already. our you look and [ justify market a and the high Artesia WTS here the course, spread. the on at Brent of as the Navajo That's and you little the has we'll refinery. weakened WTS strong our spread Refinery, oil The are target sour the discounting, margins still, continue And we base Tulsa about to spread the TI crudes.

if look by are still going So at we Brent mostly WTI that spread, assets the are positive forward. affected you our very

Neil Mehta

And is number to Okay. $X transportation you think, on economics? anchor Tim, medium term based the to right over the

Timothy Go

That's right. Yes.

Neil Mehta

to Rich, there Okay. for you returns recent the the That's the helpful. just the capital And is dividend. around execute follow-up M&A, was obviously decision cut to

form, a what in be resumption capital in or dividend whether it of the perspective buybacks returns your terms is what of Just payout?

Richard Voliva

we first of XXXX, Sinclair in dividends and reiterate concurrent both in expect half And total gave, XX% a we'd first repurchase. shareholders is our to the intend to the return return go both net we'd payout ratio quarter through of XXXX. then the acquisition, dividend, of we XXXX we'd Neil, and income based the share the $X So as on cash billion beyond, to share Mike repurchase. to dividends of which to said, with expect guidance Through and

Operator

next America. comes from Kalei from Akamine Your question Bank of

Kaleinoheaokealaula Akamine

I'm in off, Doug. Maybe marketing Sound. Puget first opportunities Standing interested in for at the

understanding is my Seattle. that that, over advantaged is Vancouver So

same. WCS to noting a sell that step the up widened but margin. ability additionally, for your And way what run about differentials you up exactly look has wondering there I'm as So out, like not the they're the crude to there, Canadian that medium

Timothy Go

smaller the ability on California. so to just as as Coast West to opportunities. well the the Canada, ability for But on is to there. This We'll to Yes. Canada and we go in Tim. on We do Sound. take I'll we have barges today. even have the products we question both those they Puget do Typically, move that as move move into both continue look into

gasoline market improve, to too. play we'll CARB the As we that the into market see opportunities have

As for crude as to to crude an the that that believe A&S-type continue to do bring opportunities us. we dips, advantage price-advantaged still represents bring we Puget it crude kind opportunities see of Puget Sound. into Canadian crude match quality refinery. tend far But We Canadian we to mix generally that as into the Sound blend

Kaleinoheaokealaula Akamine

And a quarter capital step-up of expense for on Again, my your expenditures. implies just 'XX. I think first is renewable guidance in follow-up big

this peak So it and you be this that will for us is put could for period I'm the together Sound offloads for quarter Puget just spend and hoping the and all considering that closed. next,

Richard Voliva

So Kalei, XXXX for million for and $XXX as guided, And spend $XXX XXXX, between to That then spend $XXX $XXX go in said, renewables. about leaves $XXX million XXXX. in expect million and million to we'd to million we $XXX between renewables. as expect to we'd in million

Kaleinoheaokealaula Akamine

to half? of the first or that most is And going quarter in be the first

Richard Voliva

to First be quarterly in done I point. a first half, the have split will insight don't enough half. this at

Operator

Your next question from comes from Cowen. Jason Gabelman

Jason Gabelman

to gas Biden acquisition, some regions as wondering going the West and into were those seemingly relative there some more a in at move resulted process. assets I'm they if closing it benefiting West wanted you what administration looks Rockies, XXXX, Holly mergers. has discuss there looking we gone. of put Frontier relative well. a balances held supply-demand closely environment Can The are to I oil sensitivities where or change would combined could should you ask in-depth pre-COVID if in this indicators the there's the you're XQ in has here just general process through And in up looking I that items different Mike, understanding Sinclair with kind I wanted first on if on some have the and more been even if second, vocal But And guess, were the as normalizes or relative to region. or just I one? that refining have XQ. to ask expected when the as could process, step I And versus for pretty to compare in that and say, you thoughts about demand transitory a in

Michael Jennings

the we question the to that transaction that's I'll It it surprise serving on it to customers. designed But X. give other look at little this ask to process questions too are the to I'll how you is and speak won't intimate now. think you have to we Tim is as close, what deep FTC your frankly, clearly point, Look, these insight Sure. right to little and, say about regulatory first they're and a little into asking, seeing forward very question. than we a

we're on that and working at Tim? pass we'll hard it. So piece,

Timothy Go

and execution continue the we're pleased to as on you as just capture lower as had, -- West the that quarter the Yes, boosting diesel basically gasoline of the we out just the quarter, with again, stronger less and but your that Structurally, pointed taken We're West converting in West. those RINs economics question that's renewable facility. the on the out, region, by refinery basically Jason, margins our on our well. we serve one stronger project, into we've overall again, margins, fixed costs in our then we've a refining diesel third markets not were with very saw lot seeing helping second costs Cheyenne

Operator

Paul [Operator Weil. Howard from Instructions] question next You comes from Cheng Scotia

Paul Cheng

Mike, including number in organic independent refiner, no ones peers the some to just neither their of your they or your really to investment expand curiosity, further have the bigger some inorganic. due that refining footprint energy said, that transition a have small, plan

the You guys just probably here. is exception

or finish to say And your capacity opportunity that comparing refining expand value you peers still think So be from to you footprint? a that's do your will yes, that? your on digest see that you further interested, differently have in standpoint it, that of how you after care, after you sufficient you

Michael Jennings

has diesel. But obviously, And company ours Paul, and every strategy today. actually use gasoline its own of still contrarian. in fuels believe of is fuels. intentionally not we consumers And Well, most those are the Yes. do petroleum and

chain to And carbon energy intention same we're and and renewable At supply customers doing at around is the the around serve transition, with around company those potential opportunities very so to things a our not ignorant safely and our time, inside reasonable reliably, we're fuels capture. feedstocks cost.

that to So trying portfolio is very like network. company I integrated own and also be with competitive doesn't It shareholders. to reward our that to renewables is high fuels, a what internally in outlook produce includes that. want we're to well to both us return And do to favor we petroleum both. cash generates that our lubricants relative think believe What in and specialties ultimately really returns we markets transportation we have a for

acquisition opportunities. to bet with assets our of really you when that So serve for time don't high very refinery rolls forward, going solid I premium able at its But own time, capacity a at that same portfolio and We Puget Obviously, add hope sake. as market, the we're that generic to capability help from describes do Sound a we'll believe in the strategy that. operational individual level. look can we're like

So to going what across these working mantra, committed full we've that Right to what Sound the focus that's Puget now, forward. and Execution we're on we've a we're plate. bringing our shareholders, got and really things and company is yes, need home a that's very on renewables, our to doing. and doing Sinclair of our we benefit

Paul Cheng

peers your next to out with going the if be X beyond How CCS. the may that stick my branch over business the of or a mix that into that the one they're doing at into energy level, or the expand into years I of looking is maybe traditional high those? years, space, your question X to also and second current interested outside refining mean peers including beyond when battery investment maybe HollyFrontier the getting looking over business some they And next the also at your transition, those then mix? your company business the you're from current

Michael Jennings

Yes.

liquid Paul, are distribution. production So principal skills our in fuels and

to to efforts. inside invest through going X carbon of in to Scope to carbon and focus really, emissions for we're also potentially what that things we're that the and renewables I've I terms favor. on like that's We're and look and So to us. think capture called And feels can our reduce a never. going here. out line in time try intensity storage. those those fence X in stretch like But we Batteries, never to, say going I'd provide skill advantage and

Operator

I remarks. turn for this like to There Craig closing is to further the now call time. would questions no at over

Craig Biery

appreciate today's the taking time to call. you We join on everyone. Thanks, us

Investor sharing follow-up any have always, our forward February. results out to you to you Relations. Otherwise, If fourth questions, in as we with quarter look reach

Operator

and Thank this you. wonderful This your concludes today's conference time, disconnect at call. have day. a Please line

HF Sinclair (DINO) 3 Nov 212021 Q3 Earnings call transcript