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Howard Weil Energy Conference – Tesoro Corporation

Tesoro Corporation · Mar 26, 2012 · 23 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Howard Weil Energy Conference – Tesoro Corporation – slide 1
    Howard Weil Energy Conference Monday, March 26, 2012 Greg Goff President and CEO, Tesoro Corporation
  2. Howard Weil Energy Conference – Tesoro Corporation – slide 2
    About Tesoro Positioned in the western United States Seven refineries 665,000 barrels per day capacity Nearly 1,200 retail stations branded Kenai, AK Tesoro, Shell and USA Gasoline Additional 290 retail stations in 2012 and 2014…
  3. Howard Weil Energy Conference – Tesoro Corporation – slide 3
    Key Messages Delivered sustainable improvements in 2011; first year of a multi-year plan Driving additional operational efficiency and effectiveness Reinvesting 2012 free cash flow into high- return capital projects Tesoro…
  4. Howard Weil Energy Conference – Tesoro Corporation – slide 4
    Strategic Priorities Operational efficiency and effectiveness Safety and reliability System improvements Cost leadership Commercial excellence Financial discipline Value-driven growth 5
  5. Howard Weil Energy Conference – Tesoro Corporation – slide 5
    Operational Efficiency & Effectiveness Safety and Reliability OSHA Recordable Incident Rate Refinery Utilization All-in Cost Per Barrel 1 Rate per 200,000 hours 1.0 90+% 9.79 0.8 87% 83% 0.5 78% 8.43 * 8.20 7.75- 0.25- 7.80…
  6. Howard Weil Energy Conference – Tesoro Corporation – slide 6
    Capital and Turnaround Summary Capital Spending Turnaround Spending in millions in millions 670 300 545 260 430 320 135 109 2011 2012E 2013E 2014E 2011 2012E 2013E 2014E Regulatory Maintenance TSO Income TLLP Income…
  7. Howard Weil Energy Conference – Tesoro Corporation – slide 7
    Operational Efficiency & Effectiveness Small Capital Program Anacortes Kenai NHT hydrogen recovery Hydrocracker modification Capital: 0.5 million Capital: 0.4 million Annual EBITDA: 1 million Annual EBITDA: 0.3 million Mandan…
  8. Howard Weil Energy Conference – Tesoro Corporation – slide 8
    Operational Efficiency & Effectiveness Large Capital Program Bakken Crude Oil Supply to Anacortes Capital: 55 million Annual EBITDA: 35-40 million Mandan Refinery Expansion Estimated Completion: 4Q 2012 Capital: 35 million Annual…
  9. Howard Weil Energy Conference – Tesoro Corporation – slide 9
    High-Return Capital Investments Income Capital Spend Cumulative EBITDA in millions in millions 375 495-505 430-440 305 245 215-225 103 125 2011 2012E 2013E 2014E 2011 2012E 2013E 2014E Large Capital Projects Small Capital…
  10. Howard Weil Energy Conference – Tesoro Corporation – slide 10
    Commercial Excellence Advantaged Position in the Bakken Bakken Crude Oil Production, mbpd 1,200 Pipeline Export Capacity 1,000 800 600 400 200 0 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 Source: Production forecast PIRA…
  11. Howard Weil Energy Conference – Tesoro Corporation – slide 11
    Commercial Excellence West Coast Crude Cost Advantage State of Washington Crude Oil Source 2011 Industry Average Tesoro WA Differential 2009 2010 2011 Crude Source 4-Yr Range to ANS Alaska North Slope 57% 10-25% Canadian (0.75)…
  12. Howard Weil Energy Conference – Tesoro Corporation – slide 12
    Financial Discipline Maintain average cash balance of 600 to 750 million Solid Operating Results Increase investment in high-return Strategic Capital capital projects Growth Discipline Repurchase remaining 299 million 2012…
  13. Howard Weil Energy Conference – Tesoro Corporation – slide 13
    Value-Driven Growth Tesoro Benefits From TLLPs Growth TLLP EBITDA Expectations TLLP LP + GP Equity Value1 in millions in billions 47 100 0.7 1.4 900MM 53 0.7 350MM IPO Growth 2013 IPO Growth 2013 Initiatives Public LP…
  14. Howard Weil Energy Conference – Tesoro Corporation – slide 14
    Value-Driven Growth Refining & Marketing Integration Strengthening refining and marketing Refining & Marketing Integration 2 integration 72% - Increased wholesale marketing long-term supply agreements by 76 mbpd 30% - Shell…
  15. Howard Weil Energy Conference – Tesoro Corporation – slide 15
    Key Elements of 2012 Plan Execute high-return capital projects; provide significant EBITDA growth in 2012 and beyond Execute Tesoro Logistics LP growth plan Continue to drive fundamental improvements in the business Expand supply,…
  16. Howard Weil Energy Conference – Tesoro Corporation – slide 16
    Appendix 17
  17. Howard Weil Energy Conference – Tesoro Corporation – slide 17
    Mandan Refinery Expansion Expand capacity from 58 to 68 mbpd Total cost of 35 million Annual EBITDA contribution 35-40 million, Base case* 80 million, average 2011 pricing Expected completion 2Q 2012 Supports growth of Tesoro…
  18. Howard Weil Energy Conference – Tesoro Corporation – slide 18
    Mandan DDU Expansion Expand diesel desulfurization unit (DDU) capacity from 17 to 22 mbpd Increase diesel fuel yield at Mandan Total cost of 35 million Annual EBITDA contribution 10-12 million, Base case* 20 million, average 2011…
  19. Howard Weil Energy Conference – Tesoro Corporation – slide 19
    Wilmington Yield Improvement Vacuum Distillation Unit replacement Product yield upgrade from petroleum coke to clean products Total cost of 40 million Annual EBITDA contribution 20-25 million, Base case* 27 million, average 2011…
  20. Howard Weil Energy Conference – Tesoro Corporation – slide 20
    Bakken Crude Oil Supply to Anacortes Facility to unload 30 mbpd of Bakken crude oil at Anacortes, 25% of refining capacity Total cost of 55 million Annual EBITDA contribution - 35-40 million, Base case* - 110 million, average 2011…
  21. Howard Weil Energy Conference – Tesoro Corporation – slide 21
    Salt Lake City Conversion Project Improve yields of gasoline and diesel Increase throughput capacity by 4 mbpd 100% increase of advantaged waxy crude oil throughput to 21 mbpd Total cost of 180 million Annual EBITDA contribution…
  22. Howard Weil Energy Conference – Tesoro Corporation – slide 22
    Non-GAAP Financial Measure EBITDA represents earnings before interest and financing costs, interest income, income taxes, and depreciation and amortization expense. We present EBITDA because we believe some investors and analysts use…
  23. Howard Weil Energy Conference – Tesoro Corporation – slide 23
    Non-GAAP Financial Measure (In millions) Unaudited TLLP EBITDA (Standalone) Expectations 2012 Growth 2013 IPO Initiatives Run-rate Net Earnings 41.5 36.5 79.0 Add interest and financing costs 9.5 5.0 13.5 Add depreciation and…

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