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Goldman Sachs Global Energy Conference – Tesoro Corporation

Tesoro Corporation · Jan 7, 2015 · 37 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. Goldman Sachs Global Energy Conference – Tesoro Corporation – slide 1
    Driven to Create Value Goldman Sachs Global Energy Conference January 7, 2015
  2. Goldman Sachs Global Energy Conference – Tesoro Corporation – slide 2
    Objectives to Drive Competitive Advantage Create the leading refining, marketing and logistics business in our strategic footprint Drive towards an incident free workplace Deliver significant EBITDA growth Achieve growth through…
  3. Goldman Sachs Global Energy Conference – Tesoro Corporation – slide 3
    Tesoros Business Today Kenai, AK Anacortes, WA 72 MBD 120 MBD Mandan, ND 71 MBD Key Metrics 2014 Salt Lake City, UT Refining Capacity (MBD) 850 Martinez, CA 58 MBD Refining Complexity 11.5 166 MBD Tesoro Logistics LP (%) 35…
  4. Goldman Sachs Global Energy Conference – Tesoro Corporation – slide 4
    Strategic Priorities Operational efficiency and effectiveness Safety and reliability Cost leadership System improvements Commercial excellence Financial discipline Value-driven growth High performing culture Enduring…
  5. Goldman Sachs Global Energy Conference – Tesoro Corporation – slide 5
    Achieving Continual Growth in Earnings in millions 300-350 2,200 1 Billion of Improvements 1 450 200 500-565 225 175 175 551 2010 2011 2012 2013 2014E Portfolio 2 Energy 3 Market 4 2014E 5 EBITDA Price Impact…
  6. Goldman Sachs Global Energy Conference – Tesoro Corporation – slide 6
    2014 Distinctive Performance Objectives in millions 2014 YTD 2014 Target 3Q2014 Estimate Deliver California Synergies1 160 180 165 220 240 Enhance Gross Margin 140 160 135 180 200 Business Improvements 70 90 90 105 125 Annual…
  7. Goldman Sachs Global Energy Conference – Tesoro Corporation – slide 7
    Accelerating Growth in 2015 in millions 2015 Deliver West Coast Improvements 95 125 Capture Margin Improvements 130 170 Grow Logistics1 325 375 Annual Improvement2 550 670 Annual Improvement 550 670 505 565 225 175 175…
  8. Goldman Sachs Global Energy Conference – Tesoro Corporation – slide 8
    Growth Beyond 2015 in millions 2016 2017 Deliver West Coast Improvements 135 165 Capture Margin Improvements 200 275 Grow Logistics1 125 175 Annual Improvement2 460 615 Annual Improvement 460 615 550 670 505 565 225 175 175…
  9. Goldman Sachs Global Energy Conference – Tesoro Corporation – slide 9
    PADD V Market Dynamics Los Angeles 321 Crack Spread3 20 /bbl PADD V Supply Demand Balance 16 Average MBD1 Production2 Demand Exports Gasoline 1,616 1,526 43 12 Diesel 588 514 124 Jet 427 438 - 8 Total 2,631 2,478 167…
  10. Goldman Sachs Global Energy Conference – Tesoro Corporation – slide 10
    Improving California Economy Unemployment Rate California Vehicle Miles Traveled 16 Percent 186 Billions of Miles 12 California 180 8 United States 174 4 0 168 2004 2006 2008 2010 2012 2014 2004 2006 2008 2010 2012 2014…
  11. Goldman Sachs Global Energy Conference – Tesoro Corporation – slide 11
    Delivering California Synergies Cumulative Synergy Improvements in millions 500 + Realizing synergies earlier 380 - 420 with lower capital 335 - 365 Delivering sustainable 240 - 260 synergies across the value Updated Synergies…
  12. Goldman Sachs Global Energy Conference – Tesoro Corporation – slide 12
    Creating Competitive Advantage Los Angeles Integration and Compliance Project Provides 30 to 40 MBD of gasoline and distillate yield flexibility Improves feedstock flexibility Decommissions a fluid catalytic cracking unit Permit…
  13. Goldman Sachs Global Energy Conference – Tesoro Corporation – slide 13
    Delivering Strong Performance Integrated refining, marketing West Coast Gross Refining Margin /bbl and logistics infrastructure 11.24 Flexible yield structure 8.97 Top-tier assets 8.58 7.82 Commercial agility Culture of…
  14. Goldman Sachs Global Energy Conference – Tesoro Corporation – slide 14
    Optimizing our Value Chain Feedstock Inbound Logistics Refining Outbound Logistics Product Sales Acquisition Advantaged Feedstock Flexibility & Optimization Product Channels Expect to deliver additional 130 to 170 million of…
  15. Goldman Sachs Global Energy Conference – Tesoro Corporation – slide 15
    Increasing Access to Advantaged Crude Oil Provide reliable and cost advantaged access to feedstocks 25 MBD heavy crude oil to California refineries 10 to 15 MBD Waxy Crude oil to Salt Lake City Advantaged Crude Throughput 5 MBD…
  16. Goldman Sachs Global Energy Conference – Tesoro Corporation – slide 16
    Vancouver Energy Delivering Advantaged Crude Oil to West Coast Up to 360 MBD Rail-to-Marine Terminal 50/50 joint venture Port of Vancouver Marine Terminal Commercial advantages Creates more competitive crude oil environment on…
  17. Goldman Sachs Global Energy Conference – Tesoro Corporation – slide 17
    West Coast Mixed Xylenes Project Changes to market structure have created opportunity Low natural gas prices 5,500 miles Advantaged crude oil yields Ethanol blending 11,000 miles Transportation advantage to growing Asian market…
  18. Goldman Sachs Global Energy Conference – Tesoro Corporation – slide 18
    Growing a Stronger Retail Marketing Business Improvements since 2010 Marketing integration increased from 31% to over 86% Introduced premium and value brand in our markets Acquired ARCO brand Increased retail network by 250%…
  19. Goldman Sachs Global Energy Conference – Tesoro Corporation – slide 19
    Strategic Importance of Logistics Feedstock Inbound Logistics Refining Outbound Logistics Product Sales Acquisition Access to Advantaged Feedstocks Access to Product Channels Growing logistics to provide a greater portion of…
  20. Goldman Sachs Global Energy Conference – Tesoro Corporation – slide 20
    Drop Down Opportunities Potential drop downs of at least 500 million of EBITDA 21
  21. Goldman Sachs Global Energy Conference – Tesoro Corporation – slide 21
    Driving Distinctive Logistics Growth Leading full-service provider of upstream and downstream logistics in Western United States Distinctive logistics growth strategy for crude oil, natural gas and refined products Balanced approach…
  22. Goldman Sachs Global Energy Conference – Tesoro Corporation – slide 22
    Overview of Current TLLP Assets Anacortes Key Metrics Crude Oil, refined product and Kenai Bakken 3,500+ miles Natural gas pipelines Powder River Mandan Natural gas throughput capacity 2,900+ MMcf/d Green Natural gas inlet…
  23. Goldman Sachs Global Energy Conference – Tesoro Corporation – slide 23
    TLLP Strategic Initiatives Focus on Focused fee-based business with long-term minimum commitments Stable, Fee- Maintain minimal commodity risk Based Business Provide full-service logistics offering Optimize Improve operational…
  24. Goldman Sachs Global Energy Conference – Tesoro Corporation – slide 24
    Distinctive Logistics Growth Strategy in millions 2014 2015 2016 2017 Gathering (Incl. natural gas) 60-65 265-285 310-340 335-395 Processing N/A1 120-140 140-160 150-180 Terminalling and Transportation 260-270 285-315 300-330…
  25. Goldman Sachs Global Energy Conference – Tesoro Corporation – slide 25
    TLLP Capital Plan Overview in millions Capital Spend Cumulative EBITDA Organic Investment & Optimization Total Maintenance Base Growth Natural Gas Growth 90 110 100 225 300 200 260 250 150 160 70 60 70 70 40 2014E…
  26. Goldman Sachs Global Energy Conference – Tesoro Corporation – slide 26
    Tesoro Financial Priorities Invest in growth opportunities to drive further value creation Maintain a minimum cash balance of 600 to 800 million Target TSO debt to capitalization1 below 30% Solid Operating Results Target TLLP…
  27. Goldman Sachs Global Energy Conference – Tesoro Corporation – slide 27
    Portfolio Transformation 2017 EBITDA 2014 EBITDA 3 Billion 2 Billion 2010 EBITDA Retail 551 Million 10% Retail 15% Retail 20% Logistics Logistics 15% Refining Refining 30% 80% Refining 60% 70% Growing EBITDA to deliver…
  28. Goldman Sachs Global Energy Conference – Tesoro Corporation – slide 28
    Tesoro Capital Spending Outlook Tesoro Capital Spending1 in millions 625 570 575 550 Income Regulatory Maintenance 2014E 2015E 2016E 2017E Financially disciplined cash deployment 1) Excludes self-funded TLLP…
  29. Goldman Sachs Global Energy Conference – Tesoro Corporation – slide 29
    Growth of Tesoro Logistics Annual Distributions to Percent of Logistics EBITDA1 Tesoro from TLLP 300 45% % of Total First Call Estimate in millions 245 Tesoro 30% GP 160 Tesoro excluding third-party 105 15% 50 30 LP 15…
  30. Goldman Sachs Global Energy Conference – Tesoro Corporation – slide 30
    TLLP Value Proposition to Tesoro in millions TLLP EBITDA1 Tesoros Implied Value of TLLP 857 Ownership2 5,000 629 4,000 3,000 GP 305 Holdings 1,460 156 77 760 LP Units 2012 2013 2014E 2015E 2017E 2012 2013 2014E 2015E…
  31. Goldman Sachs Global Energy Conference – Tesoro Corporation – slide 31
    Driven to Create Value Operational Efficiency and Effectiveness Commercial Value-Driven Growth Excellence High Performing Financial Discipline Culture Driven to deliver 550 to 670 million in 2015 32
  32. Goldman Sachs Global Energy Conference – Tesoro Corporation – slide 32
    Non-GAAP Financial Measures (In millions) Unaudited EBITDA Reconciliation 2010 2011 2012 2013 Net earnings (loss) attributable to Tesoro Corp (29) 546 743 412 Add (earnings) loss from discontinued operations - 30 133 (20) Add…
  33. Goldman Sachs Global Energy Conference – Tesoro Corporation – slide 33
    Non-GAAP Financial Measures (In millions) Unaudited Annual EBITDA Estimate LA Refinery Integration and Compliance Salt Lake City Retail Project Vancouver Energy Conversion Project Segment Projected net earnings 53 122 55 162 Add…
  34. Goldman Sachs Global Energy Conference – Tesoro Corporation – slide 34
    Non-GAAP Financial Measures (In millions) Unaudited Expected Annual EBITDA Contributions High Plains Crude Bakken Acquisition of Oil Pipeline Commercial Connolly Gathering West Coast QEPFS Assets Reversal Project Storage Capacity…
  35. Goldman Sachs Global Energy Conference – Tesoro Corporation – slide 35
    Non-GAAP Financial Measures Tesoro Logistics LP Distinctive Growth Strategy Annual EBITDA(2) (In millions) Unaudited 2012A Terminalling and Gathering(3) Transportation(3) Net earnings 27 49 Add interest and financing costs, net -…
  36. Goldman Sachs Global Energy Conference – Tesoro Corporation – slide 36
    Non-GAAP Financial Measures Tesoro Logistics LP Distinctive Growth Strategy Annual (In millions) Unaudited Expected EBITDA(2) 2014E Gathering (Incl. Terminalling and Annual Expected Natural Gas)(3) Transportation(3) EBITDA Projected…
  37. Goldman Sachs Global Energy Conference – Tesoro Corporation – slide 37
    Non-GAAP Financial Measures (In millions) Unaudited Tesoro Logistics LP Distinctive Growth Strategy Annual Expected EBITDA(2) 2017E Gathering (Incl. Terminalling and Tesoro Asset Annual Expected Processing(3) Natural Gas)(3)…

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