Paul Eisman President & Chief Executive Officer Barclays CEO Energy-Power Conference - September 2014
Alon USA Energy - Overview Alon is an independent refiner and marketer of petroleum products with 217,000 barrels per day of refining capacity focused on growth and innovation to meet both the energy and environmental needs of today,…
Strategically Located Assets Refining 217,000 bpd of capacity Retail 296 stores in Central and West Texas and New Mexico Asphalt Operate 10 terminals in the Western U.S. Capacity Nelson Refinery (bpd) Complexity Big Spring…
Alon USAs Strategic Focus Reduced net debt to 447 million1 at the end of 2Q 2014 from over Strengthening Balance Sheet, 1 billion at year-end 2008 Increasing Returns to Increased regular dividend by 67% to 0.10 per share per…
Where We Are Heading Having reduced net debt by 450 million since the start of 2012, refocusing cash flow to low-risk, high-return projects Transforming California assets from a drag on earnings to an earnings contributor by…
Sustainable Feedstock Advantage WTI-based crudes and light sweet Gulf Coast crudes, such as LLS, are expected to trade at a discount to international benchmarks (Brent) over the next few years, providing a sustainable feedstock…
Advantaged Crude Slate Alons crude slate has shifted increasingly towards discounted Midland-priced crudes since 2011 Processed 64% Midland-priced crudes in 1H 2014, up from 42% in 2011 Midland-priced crudes are trading at attractive…
Big Spring: In the Heart of the Permian Basin Simmons expects Permian crude production to grow by 250 MBpd in 2014 and 20151 555 active rigs in the Permian in August 2014 vs. the average of less than 300 rigs in 2010 2 Big Spring is…
Alon USA Partners, LP (ALDW) Overview Refinery Operating Margin1 Alon USA Energy owns 100% of the general partner and 81.6% of the limited partner interests in ALDW, which is a variable distribution MLP ALDWs assets include the Big…
How Big Spring Made Money YTD 2014 Product Yields Crude / Blendstocks Refining Operating Margin1 Per bbl Per bbl Per bbl Gasoline 8.94 18.65 Gasoline Sour 48.0% Crude 114.17 42.7% 1.08 Jet 28.59 Jet 122.13 4.0% Diesel…
Organic Growth Opportunities at Big Spring Evaluating low-risk projects with payback periods of less than two years to enhance the refinerys gross margin, focused on: LPG recovery Increased aromatics recovery Producing…
Delivering Organic Growth at Big Spring Initial Goals of Vacuum Tower Project Actual Results Exceeded Expectations Increase distillate production by 2,000 bpd Increased distillate production by over 3,000 bpd Enhance energy…
Krotz Springs Refinery Overview Refinery Operating Margin 74,000 bpd sweet crude residual cracking refinery 8.3 Nelson Complexity Historically processed a mix of LLS and HLS type crudes n Big Spring Operating Margin Gulf Coast 211…
How Krotz Springs Made Money YTD 2014 Product Yields Crude / Blendstocks Refining Operating Margin Per bbl Per bbl Per bbl Gasoline 3.30 7.16 Diesel 3.05 Gasoline 12.82 113.30 46.0% WTI 39.0% c 2.94 Jet 15.89 118.96…
Improving Value Proposition of Krotz Springs Evaluating projects with less than two-year paybacks focused on: Increasing LPG value Organic Growth Projects Improving distillate recovery Enhancing gasoline blending Processing…
California Refining Assets Overview In 4Q 2012, ceased refining operations due to unfavorable economics Focused on reducing operating expenses; leveraging logistics assets Terminal Current Permitted Rail Capacity Status Long Beach…
Leading Asphalt Supplier Operate 10 asphalt terminals in the Richmond Beach Among U.S. Refiners: western U.S. Operations include: (Seattle) 7 asphalt supplier in U.S. 50% ownership in Paramount Nevada 2 asphalt supplier West of…
Physically Integrated Retail Network Largest 7-Eleven licensee in the U.S. with 296 Locations in High Growth Markets stores (50% fee owned) in Central/West Location Total Texas and New Mexico Big Spring, Texas 7 Wichita Falls,…
Retail Fuel Volumes & In-Store Sales 2Q Fuel Sales Per Site Per Month 2Q Merchandise Sales Per Site Per Month In thousands of gallons Dollars in thousands YTD Fuel Sales Per Site Per Month YTD Merchandise Sales Per Site Per…
Alons Strategic Advantages Strategically located refineries with advantageous sources of crude Backlog of attractive, low-risk projects with payback periods of less than two years Physically integrated refining and marketing system…
Growth Initiatives & Operational Improvements Opportunities to implement low-risk, high-return projects Refining Increasing high margin distillate production Evaluating potential to increase throughput at Big Spring Expanding…
Financial Summary 23
Capital Expenditures Capital Expenditures & Turnarounds Increase in capital expenditures in 2014 mainly relates to major five-year turnaround in 2Q 2014 at the Big Spring millions refinery and the vacuum tower project.…
Debt Reduction (in millions) Reduced net debt by 422 million in 2012 Net Debt Remaining 36 million principal balance of the 13.5% Krotz Springs notes were redeemed in July Net debt increased in 2Q 2014 mainly due to the…
Value Beyond Big Spring Krotz Springs crude slate becoming advantaged Each 1/bbl move in Brent-LLS represents 15.4 million in annual EBITDA1 Forward curve pricing for 2015 implies a Brent-LLS spread of 9/bbl, which could produce…
Value Beyond Big Spring (Continued) Currently underappreciated businesses: 2013 Results Typical EV/EBITDA Multiple1 Adjusted EBITDA of Retail 33 million 8.5x* EBITDA of Krotz Springs 64 million 4x+ Asset value likely higher due…
Guidance and Hedging Information Throughput at Big Spring is expected to average 74,000 bpd in 3Q 2014 and 75,000 bpd in 4Q 2014 Throughput at Krotz Springs is expected to average 75,000 bpd in 3Q 2014 and 76,000 bpd in 4Q 2014;…
Adjusted EBITDA Reconciliation (in 000's) 2011 2012 2013 YTD 2Q 20141 Net income (loss) available to stockholders 42,507 79,134 22,986 (6,732) Net income attributable to non-controlling interest 1,241 11,463 25,129 8,670 Income tax…
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