Paul Eisman President & Chief Executive Officer Tudor, Pickering, Holt & Co. Annual Summer Energy Conference June 2014
Alon USA Energy - Overview Alon is an independent refiner and marketer of petroleum products with 214,000 barrels per day of refining capacity focused on growth and innovation to meet both the energy and environmental needs of today,…
Strategically Located Assets Richmond Beach Washington Refinery Exchange Terminal Alon USA Terminal Oregon Third-Party Terminal Asphalt Terminal Nevada Alon Pipelines Fernley Third Party Pipelines Elk Grove Key Retail Cities…
What We Have Accomplished So Far Strengthening balance sheet Reduced net debt to 328 million at the end of 1Q 2014 from over 1 billion at year-end 2008 Capitalizing on crude slate flexibility at refineries Krotz Springs rail rack…
Where We Are Heading Having reduced net debt by over 500 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 WTI-linked crudes to take advantage of discounted Mid-Continent crude oil pricing since 2011 Processed 70% WTI-linked crudes in 1Q 2014, up from 42% in 2011,…
Big Spring: In the Heart of the Permian Basin Analysts expect Permian production to average 2.5 - 2.8 MMBpd in 2018, up from 1.4 MMBpd in 20131 548 active rigs in the Permian in June 2014 vs. the average of less than 300 rigs in…
Alon USA Partners, LP Overview Refinery Operating Margin On November 20, 2012 Alon USA Partners, LP (ALDW) completed an 27.43 initial public offering as a variable distribution MLP 23.37 23.50 19.16 Alon USA Energy owns 100% of…
How Big Spring Made Money in 2013 Product Yields Crude / Blendstocks Refining Operating Margin Per bbl Per bbl Per bbl Gasoline 9.28 18.43 112.95 Gasoline 50.4% Jet Sour Crude 1.35 27.82 65.1% 122.34 Jet 4.9% 8.76…
Organic Growth Opportunities at Big Spring Initiative Cost Incremental EBITDA Implementation Increase distillate production by 2 Mbpd; enhance energy efficiency and During 2Q 2014 25 million 19 million1 ability to process lighter…
Krotz Springs Refinery Overview Refinery Operating Margin 74,000 bpd sweet crude residual cracking refinery 11.29 7.89 10.75 7.00 8.30 8.3 Nelson Complexity 6.16 7.39 3.05 Historically processed a mix of LLS and HLS…
How Krotz Springs Made Money in 2013 Product Yields Crude / Blendstocks Refining Operating Margin Per bbl Per bbl Per bbl Gasoline 1.46 3.28 2.36 Jet Gasoline WTI 14.42 110.87 44.6% 45.7% Diesel 3.11 13.08 Jet 122.01…
Organic Growth Opportunities at Krotz Springs Terminal and Logistics Initiatives: Completed work to place crude oil rail rack into service in June 2013 Received over 140,000 bbls of railed crude in 2013, including Niobrara as a new…
California Refining Overview In 4Q 2012, ceased refining operations for interim period Focused on reducing operating expenses; leveraging logistics assets Terminal Permitted Rail Capacity Status Long Beach 12,000 bpd Providing…
Flexible Refineries with Low Operating Expenses Mid-Continent Peer Group Gulf Coast Peer Group 5.66 5.57 5.23 5.28 4.81 4.53 4.36 4.09 3.66 ALJ/ALDW Big DK Tyler, TX NTI St. Paul, MN CVRR (1) WNR (2) HFC Mid-Con & VLO…
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 Remodel program…
Key Financial Metrics (in millions) Adjusted EBITDA 1 434 268 271 2011 2012 2013 Net Income 79 43 23 2011 2012 2013 1 See page 33 for a reconciliation of Adjusted EBITDA to Net Income under GAAP. 22
Key Financial Metrics (in millions) Capital Expenditures & Turnarounds Increase in capital expenditures in 2014 mainly relates to major five-year turnaround taking 149 122 place in 2Q 2014 at the Big Spring refinery 105 68 77 41…
Debt Reduction (in millions) Reduced net debt by 422 million in 2012 Net Debt Reduced net debt by over 500 million since the start of 2012 1,000 Completed 150 million 3.00% convertible 800 debt offering in September 2013 and…
Alons Strategic Advantages Strategically located refineries with advantageous sources of crude Physically integrated refining and marketing system (wholesale and retail network) at Big Spring Diversified operations provide…
Growth Initiatives & Operational Improvements Evaluating potential to increase throughput at Big Spring Opportunities to implement low-risk and high-return refining projects Growing West Coast logistics business Developing West…
Value Beyond Big Spring Krotz Springs crude slate becoming advantaged Each 1/bbl move in Brent-LLS represents 15.4 million in annual EBITDA1 Analysts forecasted LLS discount to Brent of 5 - 8/bbl in 2015 could produce additional…
Value Beyond Big Spring (Continued) Currently underappreciated businesses: Typical EV/EBITDA 2013 Results Multiple1 Adjusted EBITDA of Retail 8.5x* 33 million EBITDA of Krotz Springs 4x+ 64 million Asset value likely higher…
Guidance and Hedging Information Throughput at Big Spring is expected to average 46,000 bpd in 2Q 2014 as a result of the turnaround and 67,000 bpd for full-year 2014 Throughput at Krotz Springs is expected to average 73,000 bpd in…
Adjusted EBITDA Reconciliation (in 000's) 2011 2012 2013 1Q 2014 Net income available to stockholders 42,507 79,134 22,986 785 Net income attributable to non-controlling interest 1,241 11,463 25,129 7,590 Income tax expense…
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