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8-K - 8-K - PBF Energy Inc. | d654465d8k.htm |
PBF
Energy Inc. January 2014
PBF Energy Inc.
January 2014
Exhibit 99.1 |
2
Legal Notice / Forward-Looking Statements
Legal Notice / Forward-Looking Statements
This presentation contains forward-looking statements made by PBF Energy Inc. (the
Company or PBF) and its management. Such statements are based on
current expectations, forecasts and projections, including, but not limited to, anticipated
financial and operating results, plans, objectives, expectations and intentions that are not historical in
nature. Forward-looking statements should not be read as a guarantee of future performance or
results, and may not necessarily be accurate indications of the times at, or by which, such
performance or results will be achieved. Forward-looking statements are based on
information available at the time, and are subject to various risks and uncertainties that
could cause the Companys actual performance or results to differ materially from those expressed
in such statements. Factors that could impact such differences include, but are not limited to,
changes in general economic conditions; volatility of crude oil and other feedstock prices;
fluctuations in the prices of refined products; the impact of disruptions to crude or feedstock
supply to any of our refineries, including disruptions due to problems with third party
logistics infrastructure; effects of litigation and government investigations; the timing and announcement of
any potential acquisitions and subsequent impact of any future acquisitions on our capital structure,
financial condition or results of operations; changes or proposed changes in laws or
regulations or differing interpretations or enforcement thereof affecting our business or
industry, including any lifting by the federal government of the restrictions on exporting U.S.
crude oil; actions taken or non-performance by third parties, including suppliers,
contractors, operators, transporters and customers; adequacy, availability and cost of capital; work
stoppages or other labor interruptions; operating hazards, natural disasters,
weather-related delays, casualty losses and other matters beyond our control; inability to
complete capital expenditures, or construction projects that exceed anticipated or budgeted
amounts; inability to successfully integrate acquired refineries or other acquired businesses or operations;
effects of existing and future laws and governmental regulations, including environmental, health and
safety regulations; and, various other factors.
Forward-looking statements reflect information, facts and circumstances only as of the date they
are made. The Company assumes no responsibility or obligation to update forward-looking
statements to reflect actual results, changes in assumptions or changes in other factors
affecting forward-looking information after such date. |
3
U.S. Refining Industry Strengths
U.S. Refining Industry Strengths
Inexpensive
Natural Gas
Growth in supply driving decline in U.S. natural gas pricing
U.S. natural gas currently priced more than 60% below Europe
~$0.10 / bbl benefit to domestic refiners for every $1 / MMBtu
difference in natural gas price
North American
Crude
Oil Production
Secular growth in North American crude oil production
Favorable price dislocations between North American crude
and rest of world
Complex
Refineries
U.S. average refinery Nelson Complexity of 10.8 versus Western
European average refinery Nelson Complexity of 7.8
Product
Exports
Cost and technological advantages have spurred export
opportunities
East Coast to Europe, West Africa, and Latin America
Why will the U.S. refining industry prosper for the next 5 years?
|
4
PBF owns three oil refineries located in Ohio,
Delaware and New Jersey
Aggregate throughput capacity of
approximately 540,000 barrels per day
Weighted average Nelson Complexity of 11.3
Fifth largest U.S. independent refiner
East Coast rail infrastructure results in the
entire system having access to WTI-based,
cost-advantaged crude supply
Summary Company Profile
Region
Throughput
Capacity (bpd)
Date
Acquired
Nelson
Complexity
Replacement
Cost
Benchmark
Crack Spread
Mid-Continent
170,000
3/1/2011
9.2
$2.4 billion
WTI (Chicago) 4-3-1
East Coast
370,000
2010
12.2
$5.8 billion
Dated Brent (NYH) 2-1-1
Total
540,000
11.3
(1)
$8.2 billion
(1) Represents weighted average Nelson Complexity for PBFs three
refineries Cushing
Toledo
Paulsboro
Delaware City |
5
Increasing East Coast access to currently cost-advantaged
North American crude oil
Increasing East Coast access to currently cost-advantaged
North American crude oil
PBFs onsite rail-infrastructure at Delaware City provides the
opportunity to save approximately $3/bbl on delivered Bakken
barrels
versus
using
3
party
facilities
rd |
North
American Crude Production North American Crude Production
U.S. crude production is estimated
to grow by 55% (3 million bpd)
from 2010 through 2014
Pushes barrels South (via
water, pipeline and rail), East
and West (primarily by rail)
Ultimately displaces USGC
imports
Canadian crude production is
expected to grow by 32%
(900 kbpd) from 2010 through
2014
Bitumen by rail advantaged
versus pipeline transportation
of diluted crudes
6 |
PBF
Rail Deliveries of Light Crude to East Coast PBF Rail Deliveries of Light Crude
to East Coast Light crude discharge
capacity is over 100,000
bpd with a project to
increase capacity to
120,000
130,000 bpd
by Q3-2014
PBF is able to deliver
Bakken barrels to
Delaware City at a cost of
approximately $12 per
barrel
7 |
PBF
Rail Deliveries of Canadian Heavy Crude to East Coast PBF Rail Deliveries of
Canadian Heavy Crude to East Coast PBFs heavy crude unloading capacity
is expected to double from approximately
40,000 bpd to approximately 80,000 bpd
by Q3-2014 as PBF completes its ongoing
rail expansion project and infrastructure
projects are completed in Canada
Deliveries of Canadian heavy crude are
dependent on access to coiled and
insulated railcars as well as rail
transloading facilities in Canada
Transportation costs for Canadian-heavy
are expected to decline from above $20
per barrel to below $17 per barrel as PBF-
controlled railcar fleet expands and the
benefits of unit-train economics are
realized
8 |
9
Crude-by-Rail Pipeline
Planned Leased or Owned Railcars
Note: Schedule is subject to change based on current company plans and on current
third party railcar manufacturer delivery schedules Longer-term focus on
logistics Rail services agreements with Norfolk Southern and BNSF
Increased ability to load unit trains
Transloading agreement with Savage in Trenton, ND
Advantageous commercial arrangements with crude producers
Supply agreement with Continental Resources for Bakken
Ensuring delivery
Agreement with Trinity for delivery of rail cars
PBFs fleet of new railcars meet the highest DOT-111A standards
Increased availability of delivered
deals
1,808
1,966
2,023
2,625
3,100
3,800
4,516
4,600
1,283
1,300
1,300
1,300
1,300
1,300
1,300
1,300
-
1,000
2,000
3,000
4,000
5,000
6,000
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
3Q15
4Q15
Coiled & Insulated
General Purpose |
10
Widening Crude Differentials
Widening Crude Differentials
Crude differentials widened out during the fourth quarter of 2013 and PBF
expects to realize the benefits of the wider differentials as crude
purchased during the fourth quarter is processed at our refineries in the
latter part of Q4-13 and the beginning of Q1-14
$/bbl
Q1
Q3-2103
Average
Q4-2013
Average
WCS-Brent
(32.67)
(43.15)
Bakken-Brent
(13.05)
(22.72)
ASCI-Brent
(4.30)
(13.53)
Syncrude-WTI
2.26
(9.35)
Increasing North American production, North American crude oil
distribution logistics, seasonality and other events will continue to impact
differentials and PBF expects differentials to remain volatile but favorable
for US refiners |
11
Brent versus WTI
Brent versus WTI
Widening Brent
WTI differential positively impacts cost-advantage of
North American produced crude oils
(35.00)
(30.00)
(25.00)
(20.00)
(15.00)
(10.00)
(5.00)
-
5.00
10.00
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
WTI -
Brent
Min Max (07 to 11)
2013
2012
Average (07 to 11)
Source: Platts |
12
WCS versus Brent
WCS versus Brent
Expanding differentials positively impact rail economics for Canadian
Heavy crude oil processed at PBFs East Coast refineries
(70.00)
(60.00)
(50.00)
(40.00)
(30.00)
(20.00)
(10.00)
-
10.00
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
WCS -
Brent
Min Max (07 to 11)
2013
2012
Average (07 to 11)
Source: Platts |
Bakken versus Brent
Bakken versus Brent
13
Note: Prior to May 2010 Bakken pricing is unavailable
Expanding differentials positively impact rail economics for Mid-continent
light-sweet crude oil processed at PBFs East Coast
refineries (50.00)
(45.00)
(40.00)
(35.00)
(25.00)
(20.00)
(15.00)
(10.00)
(5.00)
-
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Bakken -
Brent
Min Max (10 to 12)
2013
Average (10 to 12)
Source: Platts
(30.00) |
14
ASCI Differential versus Brent
ASCI Differential versus Brent
ASCI is an indicator for medium-sour barrels processed
at PBFs East Coast facilities
(25.00)
(20.00)
(15.00)
(10.00)
(5.00)
-
5.00
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
ASCI -
Brent
Min Max (07 to 11)
2013
2012
Average (07 to 11)
Source: Platts, Argus |
15
PBFs Key Mid-continent differential versus WTI
PBFs Key Mid-continent differential versus WTI
Toledo processes approximately 35% to 40% Syncrude
(25.00)
(20.00)
(15.00)
(10.00)
(5.00)
-
5.00
10.00
15.00
20.00
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Syncrude -
WTI
Min Max (07 to 11)
2013
2012
Average (07 to 11)
Source: Platts |
PBFs East Coast Benchmark Crack
PBFs East Coast Benchmark Crack
16
NYH 2:1:1 = ((2*Dated Brent) + (1*NY RBOB) + (1*NO.2 Heating Oil))/2
-
5.00
10.00
15.00
20.00
25.00
30.00
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
NYH 2:1:1
Min Max (07 to 11)
2013
2012
Average (07 to 11)
Source: Platts |
PBFs Mid-continent Benchmark Crack
PBFs Mid-continent Benchmark Crack
Chicago 4:3:1 = ((4*WTI) + (3*Chic CBOB pipe) + (0.5*Chic ULSD Pipe) +
(0.5*USGC Jet Kero 54))/4 17
Note: Prior to September 2009 Rul87 Chicago Pipe is used for substitution of CBOB
Chicago Pipe, which is unavailable prior to this period
(5.00)
5.00
15.00
25.00
35.00
45.00
55.00
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Chicago 4:3:1
Min Max (07 to 11)
2013
2012
Average (07 to 11)
Source: Platts |
18
PBF MLP
PBF MLP
Submitted confidential registration statement in August 2013
PBF
has
identified
a
pool
of
assets
that
could
be
contributed
to
a
logistics-focused Master Limited Partnership (MLP)
Possible MLP assets include but are not limited to:
Rail terminals and railcars
Refinery truck terminals
Pipeline assets
Tank storage facilities |
No
near-term debt maturities $675.5 million 8.25% Senior Secured Notes due
2020 Net Debt/Net Cap was approximately 29% as of September 30, 2013
Liquidity
$1.575 billion Asset-based Facility (with an accordion up to $1.8
billion) Approximately $600 million of liquidity as of September 30,
2013 19
PBFs Strong Financial Position
PBFs Strong Financial Position
PBF
Financial
Snapshot
September
30,
2013
($MM, Unless
Otherwise
Noted)
Capitalization Table
Actual
Cash and Cash Equivalents
$57.4
Debt
Long-Term Debt
722.6
Total Debt
738.6
Net Debt
681.2
Total Equity
1,648.8
Net Capitalization
2,330.0 |
20
PBFs Fourth Quarter 2013 Cash Highlights
PBFs Fourth Quarter 2013 Cash Highlights
PBFs Q4-2013 Cash Highlights
($MM, Unless
Otherwise
Noted)
Est. Cash and Cash Equivalents as of December 31, 2013
$75
Est. Total Debt outstanding as of December 31, 2013
$745
$755
Est. Net Debt at December 31, 2013
$670
$680
Est. Uses of cash in Q4-2013
Est. Decrease in Net Debt from September 30, 2013
$0
$10
Est. Q4 Capital Expenditures
$85
$100
Dividend Payments
$30
Est. Cash Interest Expense
$10
Est. Cash generated from Operations/Working Capital
$125
$150
All
figures
displayed
below
are
estimates,
unaudited,
subject
to
change,
are
provided
for information purposes only and are not indicative of the actual earnings of the
company for the period
In Q4-13, PBF generated an estimated $125-$150 million of cash from
operations and working capital |
21
2014 Full Year Guidance
2014 Full Year Guidance
Guidance provided constitutes forward-looking information and is based on current PBF
Energy operating plans, company assumptions and company configuration. All figures are
subject to change based on market and macroeconomic factors, as well as company strategic
decision-making and overall company performance Throughput, based on current plans, is expected to be 315,000 to 335,000 barrels per day for the East Coast including the impact of
turnarounds
140,000 to 150,000 barrels per day for the Mid-continent including the impact of
turnarounds
Operating expenses are expected to be $4.50 $4.75 per barrel across all three refineries
SG&A expense is expected to be approximately $75 $85 million D&A expense is expected to be approximately $140 $150 million Interest expense is expected to be approximately $100 $110 million Capital
expenditures, including projects and turnarounds, are expected to be approximately $250
million |
|