PARR - Earnings call transcript Q2 2019 | Par Pacific Holdings, Inc.

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Operator

Greetings, and welcome to Par Pacific Holdings Second Quarter Earnings 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.

It is now my pleasure to introduce your host, Suneel Mandava, Senior Vice President of Finance for Par Pacific Holdings. Mr. you, Thank Mandava.

begin. You may

Suneel Mandava

Operator. Pacific Good welcome you, everyone, afternoon, second quarter Par Holdings call. to XXXX Thank and earnings conference

today Executive Officer President Pate, Par Petroleum. Monteleone, and are Executive of Israel, me Joseph Chief Will Officer; Chief and and President Officer; Financial Joining Chief William

for Any are what to from results company. expectations, They performance Before forward-looking please the actual but those securities to statements materially federal subject change not laws. some or statements is include, are note indicated and of may to, and risks comments are future today estimates under and differ we forward-looking is subject statements plans, and in defined not outlook uncertainties begin, guarantees these are concerning limited of may include as statements. that our that our term Such events. forward-looking

place Because latest for Par update obligation reliance filed SEC undue a on of forward-looking risk revise or with discussion the factors Pacific refer more or to major should any I investors our and intention affecting XX-Q of to the of disclaim XX-K statement. and businesses. you this, any not Holdings we detailed statements, forms forward-looking the

including the financial filings GAAP supplemental as on our Web of these information and investor found release operating our in can Further measures site, or with non-GAAP presentation on our regarding financial be and certain to information, figures the well www.parpacific.com, comparable as reconciliations SEC. most our press

and Executive now call I'll our Bill Officer, turn the Pate. to Chief over President

William Pate

second and morning to I'm operational Good for of participants. the delighted of XXXX. Thank conference record to our all quarter you, financial call results report Suneel.

a volumes share solid and impact our the to adjusted million system, of unit, per operational of illustrating and throughput these second for earnings cash due over in accretive acquisitions. share record adjusted free margins. $XX increase earnings $XX.X XX% adjusted the generated logistics of recent results quarter XXXX, our $X.XX and record EBITDA. in million retail of our We achieve financial of was We availability refining flow Our per

our to leverage High awareness. achieve ability our also forward is thank achieved ability increase consistent integrate the refining headquarters. and market in our attention moving through any integration to the ensuring operational commercial three I operations. environmental highlight opportunities the already illustrates This by and benefiting significant solid and to strong their expense. at team want to our rapidly the and for outages accomplishment XX from safety availability to with safe the triggered our -- want only productivity environment significant West realizing processes months to Washington is systems I'm and very compliance last on spring coast. gains acquisition, acquisitions pleased we're unplanned conditions G&A into I without

Washington, our capabilities, gen our continue is nicely expanding We're costs. we're generate next logistics savings I our making elevated product further upon transport on we oil face And marine that counterbalancing in The refined lower expect which inland in fuel progress which crude waterborne Washington also will oil freight renewables Hawaii. dips project crude completion. in to the pricing to

worst also our related at in refining our pipeline scale capture oil we and July, cost quarter. the the crude the years. us Hawaii, of experienced integration work structure year, allowed first-half we in improve two completed to in locations. and to in the we of the the some our improvements increased In waterborne In Nonetheless, crude face market continue the facilities also gasoline Hawaii interconnect to challenges Singapore sequentially cracks

The congratulate also hydrotreater Hawaii our the Par commissioning last are team project assets of Pacific System. that distillate the want to of completion the fully With project, our month. within I IES on team the completed integrated ahead the months unit, plan. tie and two a completing this task of a region in acquired turnaround undertaking newly accomplish under crude catalyst simultaneously budget this pipeline at reformer They in executing project. the while project

perform Looking cracks expect turn Asian the well and strong downtime unit in with Hawaii to forward will These business waterborne third driving trends continue tempered around. the the by in the from market retail be to and to performance, improving continue markets quarter, season peak challenging we summer the Wyoming. and a crude Washington crude

Looking to for with continue be positioned IMO fourth well yields. our high quarter, after we XXXX the distillate

turn Joseph details I'll to time, more to this operations. provide the At over on our call

Joseph Israel

Thank you, Bill.

which what a for execution efficiency to able costs. quarter market system safely low capture XXX% and to us refining reliability was fully all high production gave exceptional perfect the was and close Second by running with

conditions Our balanced to market and system opportunity consistent gives perform basis. on minimize and optimize search exposure us the our and to helps a to

The crude attention. geopolitical to differentials mostly due global oil elevated, market under supplied waterborne global remains and ongoing an

of This crude end result, Brent over per barrel per approximately quarter our NOI average. delivering on this. a five is As differential differential average over barrel years realized $X.XX crude $X.XX

product distillate oil. by driven fuel On personally side, Spread Crack gasoline favorable in was offset the $X.XX barrel X-X-X-X and week per Singapore by

Our with us with the the minimum XX.X% barrel and exports. Hawaii, local Hawaii availability. the a matches XXX,XXX adjusted refinery's which in on profile input gross margin operational yield allows per consistent with to quarter, Hawaii needs Refinery demand realized pricing approximately focus in little was per day. barrels throughput supply $X.XX average in

schedule. $X.XX the Production $XX hydrotreater budget. million day of or to million new per barrel, couple cost costs compared from announced under quarter reflecting The the barrels is is improved acquisition the in DHT, $XX IES. second months refining cost distillate starting assets diesel ahead XX,XXX following our original structure just Project were up per of only

barrels low production in XX% approximately day by up per distillate is oil capability Hawaii is pricing in to Hawaii transition. XX% day the With per our driven including to the online, barrels XX,XXX sulfur and production, XX,XXX oil DHT distillate through fuel production of of IMO

catalyst million $XX approximately outlay million reformer executing planned approximately regeneration which month capitalized. expected of the to be and works IES XX% for of acquired During the our turnaround to $XX also is in July, asset we

for have estimating of We works. $X.XX opportunities per missed the associated margin $X.XX approximately to barrel gross

throughput for Considering highly works third to the to day differentials reflecting in the market structure. at barrel for turnaround a per on Hawaii. the Brent, is Crude approximately quarter premiums $XXX,XXX $XX,XXX quarter $X.XX remain third elevated backwardated targets per

However, so product inventories third to index following per the improved low Crack to recent quarter. economic Spread all Asia X-X-X-X cost in in close several five for Singapore $X.XX has the are approximately barrel far refineries, with Singapore years and

barrel to our and following high barrel quarter. are second a maintenance in average period In through utilization day, $XX.XX our throughput to between per March basis, $XX,XXX PADD normal both per oil traded reflecting FOB busy WTI averaged reflecting inputs approximately basis. WCS, and two-thirds to of our barrel Washington, and rates Index on discount the May. one-third approximately products discount Bakken inventories refinery back our of Washington ANS per approximately slate on X-X-X-X WTI $X.XX crude per traded IV crude $XX.XX at slate at crude

per In $X.XX VGO adjusted with cost margin West This was were strong availability. our operation positively production barrel. $X.XX the quarter, XX.X% costs barrel second capture impacted per and cracks gross Coast spreads funds

Integration Index commercial around our is barrel Coast. Northwest the with We per assets, continue us is very revolve Profiling third more approximately basis. impressed logistics providing with to Pacific on system flexibility our a to and West well team X-X-X-X going averaged our Washington. our quarter, in local auctionality $XX as ANS continue be as along

Our quarter. quarter target Washington in to per the day. per throughput index Wyoming, is barrels In $XX.XX for the was second XX,XXX XX,XXX X-X-X third in our barrel

day. throughput averaged per XX,XXX barrels approximately refinery Our

Production margin in gross throughput. adjusted FIFO per impact. $XX.XX barrel the $X.XX barrel, realized Our negative including $X.XX per quarter operational reflecting and were XX.X% costs only a per availability barrel was high

and X-X-X barrel gasoline has July. approximately Index in now our peak Wyoming $XX.XX in are -- the of our our We gas per of averaged regional season,

in We pipeline benefit River continue and crude Powder production oil to from local access the and Basin. discounted

Wyoming in throughput day. $XX,XXX is target quarter per second barrels to $XX,XXX Our

turn over And highlights. to Will review call to and consolidated results Laramie the now, I'll

William Pate

Thank you, Joseph.

segment-level from $XX from Refining to relatively the million The aggregate able $XX contributions the our the continue G&A in first contributions by XXXX. hold compared Washington driven was million, refining. were Our full an QX, while was reflect results we to each principally to of spend increase quarter area, contribution segment flat. quarter increase strong

posted in end of adjusted in outlook and $XX EBITDA, continues Washington Hawaii, segment The throughput improve million more between to are previously record of $X driven marine to elevated $XX Washington. movements and provided of we overall the and logistics by Our upper feeling quarter million. Hawaii with for range another million commercial synergies comfortable our

$XX million, logistics net gain derivatives. $X segment with segment to balance. flat Retail attractive contributor EBITDAX, segment up fuel contribution, solid of the $XX impact QX, made our XX% $XX nearly excluding versus million, and a adjusted contribution of of of EBITDAX retail XXXX. also the million. a second $XX on last $X was generated compared EBITDA an adjusted of total, adjusted unrealized volumes of and were million reflecting quarter segments sales months same million stands of up at store In segment Laramie XX approximately XXXX. loss Laramie's Retail Our million

gas natural Laramie in pricing, activity cease its the the for lower current Given natural gas with drilling to during year. and resulting intends CapEx August,

items, Wyoming EBITDA of drag for accounting the $X Refining the to net quarter approximately within and income item segment. impacting adjusted both the largest FIFO was focus second the Shifting million adjusted

only through the rate associated income GAAP our impacting to addition, the $X.X flowing net debt was million $X net during quarter. notes In and charge adjusted of the the expense approximately was interest by million exchange related Last interest expenses reduced extinguishment with of convertible line. unrealized income derivatives

toward and from flow On cash paying activities we the our convertible allocating capital debt. our made front, operations strides targets structure exchange toward through down

X% capitalization approximately net to quarter XX%, increased $XXX to million Our end. total at while million XX% debt from by $XX liquidity declined

million $XX quarter GAAP of expense million interest $XX interest. Second cash which totaled was

quarter, capital capital the from $XX approximately between of a including communicated million QX, totaled inflow $XX funding million. reversal Cash million. second and Capital build. capital working $XX underneath and million previously XXXX expenditures operations with consistent the during planned partial and turnaround the total $XX approximately XXXX totaled working reflecting capital remains totaled $XXX facilities ranges expenditures for of $XXX adjusted million, outlays working DD&A million

prepared Operator, our turn concludes for it Q&A. This you I'll to remarks. back

Operator

question. we Thank question-and-answer Neil this time, Mehta you. Goldman will Please your from the question with proceed At comes of line Our first conducting a [Operator session. be Sachs. with Instructions]

Neil Mehta

Good morning, team.

it's operations, in just moving The Hawaii good I right quarter. to the on was first third the margins Singapore had direction see at question

with and risks the for crudes risk drive about, refiners? water. to and on some -- grade and of Can to you your the continuing exposed profitability to One on and heavy medium those are cuts talk that availability the of manage of what crude be continues you side lack OPEC optimize -- the waterborne

Joseph Israel

outpaced clearly regards the global Joseph, has With ongoing consistent good barrel. the crude since differentials of tension and supply. Yes, in pretty has here. the demonstrated morning, Opex market, oil oil discipline, resulting differentials to XXXX, clear the of to geopolitical barrels elevated Neil, production oil crude kept second-half elevated demand out

will In with cost the addition, oil crude elevated the fortunately, crude backwardated back is here, delivery order to differentials in another to take crude up us products take component caught and will it in recently crude differential. the eventually it's To market historical in differentials time as Asia the going considering tell control where market. from you expect, supply for range would time, realized

we guidance, to only on which crude site. file, for are our in history Web to starting current index adding differential, available week, quarter Hawaii, weekly differential crude Relative in this is our our realized

the work optimized on around optimizations for up Our in scanning monthly us crude our does on basis. team a robust trade and three with opportunities Hawaii really crude globe consistent, end

continue minimize pain the we'll as can. that and to So do we

William Pate

Bill, this on to just chime to. Neil, in that is

medium we starts think the and past, we the mentioned can refinery fortunately I on it can we longer is You do we've get we little a a to mode fair jet, out get pricey obviously to of yield more and allows you that that all for in go one amount the we batch we've reduce us market crude in optimize if lighter our demand a reject the the the is can, things has us runs sweets and as in flexibility. of more know of as market run we can and And and the for know key sweet sometimes the access import. helps for the big challenge sour

to you the different batch then if LP analysis constantly So crude start said, slightly selection. become will optimize optimizing grades we're and the adjust unfavorable, assessing market Joseph to the know our following our mode as

Neil Mehta

the did That's your is option like you going of theoretically, not to question leverage great. take West to And bigger picture dilute free the a to -- it delever business and had up organically cash capital guys shareholders. transaction, after try And then leverage kind on the follow Coast looks flow allocation, tissue completing up existing the after are you and equity.

And get want have to, you intention to so us you long the kind case It's to in base to equity to just you a no But of How sort this it's can this where to and to kind get get about, think ratio excess point, your do of to? question. views do take target the on cash? a flow. the place of uses want confirm with you leverage going that you you maybe issue at cash then, help big picture is free what of

William Pate

Will. shot at is I'll take a that. this Neil,

I in down I And EBITDA, probably XX% X.X a we I in debt from and times on like just think debt basis, imputed our XX% think I So to get in perspective, you capitalization to range. that like range. think, we'd the be be, net to a target the to net where

that's So think again, our I target.

we this conducted. allocated $XX decent I there. million quarter that about made exchange we think, convertible progress as some we note toward indicated, the We cash

again, to $XXX six in the step also during percentage we range. was it up right built a good liquidity down million So our direction. the moving And quarter points

the will like debt deleveraging debt from next year other we to think year evaluate we'd I or to pursue down as through we whether pay continue evaluate into liquidity build standpoint. head and alternatives and position a our

over to to the year think around, XX said, got horizon, months, ought able being we've be think, we a that. to I with time XX, think I achieve I respect think expenditure next capital requirements that from we next turn

Neil Mehta

Pate. Thanks,

Operator

Matthew from Holt. next your Our Blair with Pickering, line question of comes Tudor, proceed with Please question.

Matthew Blair

good Hey, morning, everyone.

William Pate

Good morning, Blair.

Matthew Blair

numbers more of Could model with on record behind value of going logistics through bit just a your the drivers this number the And the commentary a those feel you retail. came logistics, little provide forward? you on each quarter sustainable I do integrated in record good results thought really I specifically that's segments? the guess near

William Pate

Sure, Matt, it's Will.

on we in product. think quarter-to-quarter think separately, principal really you again, deliveries of with driver that both Washington And both activity going may I deliveries the perspective we caught delays recall some activity quarter, during logistics, had to the the again, more little a crude during -- was train respect move And of then bit due Hawaii. first marine based and of the increase on and second in that's the I referenced out to weather there. to up quarter activity in

industry the I changes really and given I seen that the that. I think the to So annual or again, think on the historical you in kind think guided business. throughput representation the we've environment contribution, retail margins side I And we the think way the overall in it's stronger good about retail of price on we flat margins, -- participated a think again, know quarter and historical for wide during during basis a expansion retail quarter, an of

Matthew Blair

provide And given drop strategy Did the that and update program the prices? then, drilling overall an August? natural drilling say at good. Sounds ceased in had Laramie, NGL on gas Will, and just in you could you you

William Pate

correct. That's

drilling we'll will of August, on Laramie So go think for is and seeking be a some during of the where activity forward month basis. its will given the be revisit balance I pricing completion continuing -- the activity pricing year of

I balance for I important Laramie them are, a do ongoing And a think to to sheet are continue on prices cash I'd basis. commodity that's focused thing where given we that to And think strategically on. trying is, point Laramie get flow. free frankly, what think generating to where just I the and most preservation expect

Matthew Blair

Thanks. few more questions. going to re-queue I'm you. for a Thank

Operator

next Global comes line question. with Our of Securities. proceed Harrison Mike Please Seaport your from with question

Mike Harrison

getting Hi, morning. could was I maybe that the on it's it complete, you wondering good if completed. now through project and go DHT congratulations

Now it and barrels you a to that timing through XXXX new lot to the is once ramp of think can XXXX of about day, EBITDA still or magnitude complete, that see an maybe on we start we it should is up of Is XXXX that regulations how the that in basis? contribution the of QX in? or of something maybe kick talk kind a mostly kind contribution like

William Pate

that for and way type for Will, I kind is best kick to think QX in return a with terms on that think I think the in about Mike, return EBITDA. in. thresholds as Yes, range feel perspective still put really additional which of mid XX% starts think contribution had the if profile, the it in modeling of to our I digits it got And again, comfortable projects you it's the we million mid annual from recall, contribution previously provided you to of the single we $XX assessment

Mike Harrison

the turnaround -- then, unit you as the Okay. in maintenance we turnaround of keep need other first know to guess, that I And or in I for Any special that part we kind And actions XXXX? crude of into get mentioned Hawaii. mind second-half?

Joseph Israel

in why don't you few what in executed until turnaround have planning other even unit planned Hawaii, the summer. [indiscernible] sulfur No, in we sundry and or still turnaround we're a early generation, scheduled major we third But the know, then, maintenance. next quarter, any

Mike Harrison

me then, question And Wyoming. is right. All on for last

million FIFO quarter. $X.X You during mentioned headwinds this the of

as kind Is or Just QX? that that we move we on about of wondering think something how that? into any reverses that thoughts

William Pate

Will. it's Mike,

usually principal prices. settle the we're to going -- and the period in to oil change think, I change there out, see how periods, I can need wait think crude the flat driver prices over

to I move going provide third the direction into think, the that any quarter? a of early again, little So on thoughts

Mike Harrison

All much. very right. Thanks

William Pate

Thank you.

Operator

comes question Please your of one Cowen. Jason question. Gabelman from with with next Our proceed

Jason Gabelman

the we to it you just Do to because XXXX, And ever oil to fuel add sulfur wondering that sell last price pricing as there to about wrinkle get fuel an the Or is on want a low I questions. to opportunity think then, silver into quarter oil of guys through improving all just can topic we that? pricing. see Par of oil as could thanks I'm fuel I sell IMO, Hawaii Hey, kind fuel we expect produce a low taking in the utilities? the roughly revisit lowest you for on screen? if And bunker my discussed of well?

William Pate

Jason, it's Will.

that the to or we the I we incremental of locally either market, prevent most region would our do said, that into majority nothing think sell of fuels volumes into think, that another our think bunker I the there's from the us utilities, selling world. -- being of

think output. the respect I So, that's to with

I and I I that's product away think think pricing, fuel again, in diesel to about spread least representation pure pricing. at I initially, be lifts the time about the And of are terms market sulfur the fuel think oil we of the oil best will that way very think value over low sulfur from suspect of we the why the will going in that that think marketplace. in move this

Jason Gabelman

Sure.

could if and my one appropriate to one there low selling? Just would I attribute model which it prices, if more I'm ULSD low oil clarify of one be sulfur fuel in you're looking oil, fuel sulfur two that of answer, at that to the

William Pate

about. the going between it's Jason the in to way think it's probably think be interim best I somewhere to

Jason Gabelman

Got it.

just, you I believe correctly. in that I heard just guys Thanks And you're Okay. for answer. Washington in then there's to And next Hawaii also a one I think XXXX, turnaround had if in mentioned have going that you year.

directionally going it's what you to in at CapEx just an come indication of give what in if XXXX? So

Joseph Israel

turn chapter turnaround the quarter, leave into the In the around first October, we'll so first to unable across it's XXXX. this we the but deal in Yes, schedule, with we one us push Washington two have operations. allow first Wyoming majority system slowly of will believe focus an Hawaii and insignificant overall next to in our to in the on one to This only terminals October. will summer, going the impact in in really early year, then the

William Pate

$XX historically it's $XX about typically Jason, is then a that million runs we've outlay I $XX million think perspective, indicate range. that turnaround Wyoming From Hawaii million, Will. And in and to what

XXX. is later turnaround for in good during think quarter, million less probably -- Wyoming in where Washington actually for think of as mind, in the then probably indicated the smaller outlay then number that's Hawaii incurred than I -- Yes, and again, So Joseph some of the And a I pretty XXXX. $X sense a also and range. Jason outlays the keep are fourth

could share probably $X So total. again, about of I think million that you

Joseph Israel

[Indiscernible]

Jason Gabelman

turnarounds, are forced assuming And these our these I'm shutdowns partial aren't plants. current

Joseph Israel

the about talking XXXX You're outlay.

Jason Gabelman

Yes.

Joseph Israel

terminal. the as conflicting outline type So, need It XXXX the ordering slowdown. or equipment we any that involve will of shutdown is just later doesn't in

Jason Gabelman

in But wide at this quite out they're stage? XXXX,

Joseph Israel

Yes.

Jason Gabelman

great. I the answers. Got appreciate it. right, All Thanks.

Joseph Israel

Thank you.

Operator

question proceed Please line Rezvan Tim with Oppenheimer your next Our of & with the from question. comes Company.

Tim Rezvan

clear sheet, Hi, question balance that good A morning, folks. you've been is goal. a deleveraging on the pretty first,

now I the second can we kind use grinding of quarter balance convert assuming from in sheet. guess, of debt addition You're the I how your think of ending to right are debt. in continue cross what of kind trending to -- on retirement? and the with I hairs cash down sort expense XXXX could reduction million into we about interest to guess $XXX vehicles that the if last I'm saw

William Pate

Sure.

Tim an second running annualized to indication interest with using starting I starting the just about the basis. right, So as as on a a quarter on point think, a year, million point the we're cash $XX basis, respect

reduction get full you principal balances, of quarter a think convert about that. And didn't of the I on so again, positive $XX the million a contribution,

the of continue facilities So generate is the build additional think carry And reduce to liquidity and sense should target, million from continue our to the think, and small assuming balance there. the we say, then again, indicated, will expect debt I operations $XXX balance cost I overall think the balance. I most to visit cash which I we least a overall cash probably And we then a think year, monitor cash likely at reduction that will I liquidity. as position makes range one I into to cash

Tim Rezvan

Thank that. you. appreciate I Okay.

Operator

question. Capital of next with from your question comes Our Lawndale proceed Shapiro Andrew with Please line Management. the

Andrew Shapiro

a the Hi, here. answered, edges lot around and asked have but A you. I thank few were

the and consolidation what Just here doing as each if see you anniversarying both could bit is we're the now for acquisitions? integration like savings? acquisition, more timelines you synergies. a Or little year-over-year soil synergy digestion is and on the the clarification, Is integration, do U.S. of IES any completed all further

William Pate

So, Andrew, let take me this.

some to I we respect progress then on we're they're more they the commercial good making synergies, Washington, think were first we and business. of acquired really all, with -- probably significant when thought

So or we that the as those will the time. our I period respect into show marine Hawaii And continue a for will Washington, which our a this really Hawaii. out synergy of are as to ongoing. of maximize out be reduce expanded know ties play a don't saving, products to of to these cost ethanol will well, With also This up moving we've within think cost opportunities capability. system. where can will our we value

cost of We savings acquisition the have that of lower as realize big range end yet. not we the the for significant the by to to that itself. laid begun close That's savings, probably as the out a savings it's

And Hawaii then, in synergies in the the get starting capability, I opportunistic arms exists Coast, and that addition backhaul to products system from to ability our just to West those we're that, that that basis around. back expanded really to are on the move see an our and to with

shifting of that over a unfolding there, and to have to over to quarters. still see a processes organization next matter in of certainly time a the two there aligning organization, require integration S&P will the be sure our that We the all to to systems consistent we see of more is processes lot then ensuring largely that we turning you'll process that a some too, impact throughout do done. on terms it's integrating amount kind the of in Not integration our And systems point work the and and but more entire IES, within we're will respect that when fair got line bottom effort. the three the system of systems. With

having logistics with two and our between original probably opportunity working real even I respect to that think will into as some terms three and we offer two market to be locations. will movement market We years. out And there's there asset involves the in of marketplace. work will some in the well product be the over existing optimization So in which the is that there planning and our can products those profitability continued of expanded folding -- the very that as still in play think that refineries, capability growth and probably well

Tim Rezvan

with guess to IES, Defense within to was upcoming were And I probably -- volume is governmental in guess on Okay. and next contracts sizable benefit supply respect contributed a you two named the days, the a last see fiscal way, movement think sales it which margin that the I products noticed margin bigger contract. increase the the it's Department high or margins lower year Are the guys -- the on it I but site this mix? this mix our of in the for we I of sales DoD these our and should enhance sales just and mix it's

William Pate

major do occasion major by necessarily the to occasion, military very contract forces pleased value their great actually but, we're I pipelines on have state of they relationship supplier to don't connected We're less, profitability more, we they with three and keep indicative we pleased I don't in see want obviously a are our win a what think the that a DLA. a why contract be year, and installations material community. volumes, the very to purchase contracts, with of to we on change mind, on military Hawaii. where and to result by but were are the during it's do of of local relationship fortunate to and the continue with that not in defense the as will operations specific the our comment again, we DLA and The

Andrew Shapiro

the year first is start NOL tax expiring? that When powers Okay. substantial

Joseph Israel

Will, that? do you want to answer

Suneel Mandava

we mean, can that I I ensure think of the Yes, optimally think consume time -- for listed I think that the we time I XXXX, NOL in as horizon deploy income. taxable we variety again strategies generate over the fillings the again, to

William Pate

this the see And that Bill, today, I power earnings have is today think, in don't the we we I would given reason have expire. NOL why any have assets the Andrew, we

Andrew Shapiro

Excellent.

So you're identify you chewing investor shows you that presentations upcoming for are highlight road lastly, and on And planning? can for they're them as coming non-deal and fast up. calendaring us and

Suneel Mandava

Suneel. additional Securities, planning those this XX. for just in registered Industrial our We then Global Energy be conferences. at conferences we're that'll quarter here announcing be and those we'll to be late Andrew, Seaport is picking for And Conference going August up held their fourth XX, the Chicago

Andrew Shapiro

Okay. you your only that's announce either of the for them or press Is come of usually time releases week before? because call, ahead Web way you your basically there them week a out the ask -- any can why little or site on the otherwise on

William Pate

accelerate announcement That's point, to we a Andrew, will good forward try announcements. that going those

Andrew Shapiro

you. All Thank right.

Operator

Please Our comes the next Instructions] Tudor, your with question line Matthew of from Holt. Blair proceed [Operator Pickering, with question.

Matthew Blair

QX, from Hi, Is there? it my sounds it again OpEx a taking like After low was it whether in little -- thanks Joseph, the found sustainable? sustainable. XXX on once might that a for be QX. that follow your put comments you very reads Hawaii up here. right number, cautious Now ups

Joseph Israel

at planned have have $X.XX call I first Hawaii been minimum main Strong barrel. unplanned reason. refinery reliability for has that low the very details been combined structure and Yes, per and

planned mentioned $X.XX point. basis. $X barrel cost elevate will important at maintenance. guidance maintenance third with bolted our which already the everything associated is throughput production going Also, and under costs the still to is a the per best incrementally the this we down due quarter, an budget term, barrels throughputs through OpEx low on quarter, with estimated average probably barrel probably third in Long barrels per per are the most For

Matthew Blair

you then And at your QX about good. and compliance stands each year? Par on next talk could Sounds spreads where refinery on octane outlook

Joseph Israel

have probably From and a -- if standpoint, premium octane gasoline system, QX And as our blending move forward increase XX important we to gasoline from and of to is produce already premium more there. octane a a market XX% and an is we we choose even there. standpoint, we

comfortable very So there. we are really

Matthew Blair

your week is exposure do cracks offset just about the negative naphtha question, week here. had some anything naphtha then pricing? your impact wondering last a yield? margin the Great. can is What noted have on And you there capture, to refiners And and

Joseph Israel

naphtha Basin of programs Permian Eagle relevant the blending. associated more Yes, vertical most the I for think Ford are type with refineries

that, of [indiscernible] elevated with still feedstock a our We some have noise. equipment -- which have in but our less we can handle minimum

Matthew Blair

Thank Great. much. you very

Operator

the to any Since would I for remarks. in no like Pate back closing questions left turn queue. Mr. there the are floor over Will to further

William Pate

few acquisitions the from improving day. the of in market performance believe well-positioned our IMO to past and mainland half the back good into our financial over financial reflect the largely Operator. year the the when due business as is this you, excellent benefits capture years. Have approaches first acquisitions. joining for in believe and morning. been Asia conditions This this Thank despite our operating has are we achieved Asia that a We statements reporting Thanks Conditions of cycle difficult we and record recent us to our XXXX results improvement. market Hawaii

Operator

This concludes today's teleconference.

lines disconnect You at you this wonderful have participation, your may time. day. and for a now Thank your

Suneel Mandava	SVP, Finance
William Pate	President and CEO
Will Monteleone	CFO
Joseph Israel	President and CEO, Par Petroleum
Neil Mehta	Goldman Sachs
Matthew Blair	Tudor, Pickering, Holt
Mike Harrison	Seaport Global Securities
Jason Gabelman	Cowen & Company
Tim Rezvan	Oppenheimer & Company
Andrew Shapiro	Lawndale Capital Management

Par Pacific (PARR) 10 Aug 192019 Q2 Earnings call transcript