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| 8-K - 8-K - PAR PACIFIC HOLDINGS, INC. | a2017-02x28form8xkxinvesto.htm |
Investor Presentation
2
Forward-Looking Statements / Disclaimers
The information contained in this presentation has been prepared to assist you in making your own evaluation of the company and does not purport to contain all of the
information you may consider important. Any estimates or projections with respect to future performance have been provided to assist you in your evaluation but
should not be relied upon as an accurate representation of future results. Certain statements, estimates and financial information contained in this presentation
constitute forward-‐looking statements.
Such forward-looking statements involve known and unknown risks and uncertainties that could cause actual events or results to differ materially from the results
implied or expressed in such forward-‐looking statements. While presented with numerical specificity, certain forward-looking statements are based (1) upon assumptions
that are inherently subject to significant business, economic, regulatory, environmental, seasonal and competitive uncertainties, contingencies and risks including,
without limitation, our ability to maintain adequate liquidity, to realize the potential benefit of our net operating loss tax carryforwards, to obtain sufficient debt and
equity financings, our capital costs, well production performance, and operating costs, anticipated commodity pricing, differentials or crack spreads, anticipated or
projected pricing information related to oil, NGLs, and natural gas, realize the potential benefits of our supply and offtake agreements, assumptions inherent in a sum-of-
the-parts valuation of our business, our ability to realize the benefit of our investment in Laramie Energy, LLC, assumptions related to our investment in Laramie Energy, LLC,
including completion activity and projected capital contributions, Laramie Energy, LLC’s financial and operational performance and plans for 2017, the potential uplift of an
MLP, our ability to meet environmental and regulatory requirements without additional capital expenditures, anticipated refined product demand and Hawaii petroleum
use, projected Hawaiian air travel, our acquisition integration strategy, including the acquisition of Wyoming Refining Company and assumptions upon which it was based,
anticipated mid-cycle Adjusted EBITDA projections and estimated cost synergies from the acquisition, our ability to increase refinery throughput and profitability, our ability
to evaluate and pursue strategic and growth opportunities, our estimates of 2017 on-island sales volumes, our estimates related to 2017 Adjusted EBITDA and certain other
financial measures, our estimates related to the annual gross margin impact of changes in RINs prices, and other known and unknown risks (all of which are difficult to predict
and many of which are beyond the company's control), some of which are further discussed in the company’s periodic and other filings with the SEC and (2) upon assumptions
with respect to future business decisions that are subject to change.
There can be no assurance that the results implied or expressed in such forward-looking statements or the underlying assumptions will be realized and that actual results of
operations or future events will not be materially different from the results implied or expressed in such forward-looking statements. Under no circumstances should the
inclusion of the forward-looking statements be regarded as a representation, undertaking, warranty or prediction by the company or any other person with respect to the
accuracy thereof or the accuracy of the underlying assumptions, or that the company will achieve or is likely to achieve any particular results. The forward-looking
statements are made as of the date hereof and the company disclaims any intent or obligation to update publicly or to revise any of the forward-looking statements,
whether as a result of new information, future events or otherwise, except as may be required by applicable law. Recipients are cautioned that forward-looking statements
are not guarantees of future performance and, accordingly, recipients are expressly cautioned not to put undue reliance on forward-looking statements due to the inherent
uncertainty therein.
This presentation contains non-GAAP financial measures, such as Adjusted EBITDA, Adjusted Net Income (loss), Laramie Energy Adjusted EBITDAX, and PV10/PV20. Please
see the Appendix for the definitions and reconciliations to GAAP of the non-GAAP financial measures that are based on reconcilable historical information.
Cautionary Note
Regarding Hydrocarbon Quantities
The Securities and Exchange Commission (“SEC”) permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable, and possible reserve
estimates. We have provided Laramie Energy, LLC (“Laramie”) internally generated estimates for proved and probable reserve estimates (collectively, “2P”) in this
presentation in accordance with SEC guidelines and definitions. The 2P reserve estimates as of December 31, 2016 included in this presentation have been prepared by
Laramie’s internal reserve engineers and have not been reviewed or audited by Laramie’s independent reserve engineers. Actual quantities that may be ultimately
recovered from Laramie’s interests may differ substantially from the estimates in this presentation. Factors affecting ultimate recovery include the scope of Laramie’s
ongoing drilling program, which is directly affected by commodity prices, the availability of capital, drilling and production costs, the availability of drilling services and
equipment, drilling results, lease expirations, transportation constraints, regulatory approvals and other factors; and actual drilling results, including geological and
mechanical factors and recovery rates.
3
Our Business Platforms
Retail - Distributor and Marketer of Refined Products
Gasoline and diesel marketed through 90 locations across Hawaii
Exclusive provider of 76 and 7-Eleven branded outlets in Hawaii
Launched Hele, a new local brand; rebranded 32 of 37 locations in 2016
Competitive Natural Gas Producer – Laramie Energy (2)
Deep inventory of drilling locations believed to be economic
Cash operating costs competitive with low cost basins in the U.S.
Favorable exposure to improving NGL markets
Access to takeaway capacity to multiple end markets
A
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____________________
(1) As measured by Nelson Complexity rating.
(2) Par Pacific owns 42.3% of Laramie Energy, LLC
Hawaii Refinery
94,000 bpd 5.7 complexity refinery (1)
50% distillate yield configuration
Crudes sourced world-wide
Wyoming Refinery
18,000 bpd 11.0 complexity refinery (1)
95% light products yield
Tailored for Powder River Basin & Bakken
crude
Hawaii
Storage capacity of 5.4 million barrels
with 27-mile pipeline
3 barges deliver products to 8 refined
product terminals
Wyoming
140 miles of crude oil gathering systems
40 miles of refined products pipeline
Approximately 650 thousand barrels of
storage capacity
Refining
Logistics
Retail
Laramie Energy
4
Par Pacific Summary
Enterprise Value (2) Key Statistics
____________________
(1) Represents Par Pacific’s 42.3% share of Laramie Energy. Calculated based on mid point of 2017 exit production target.
(2) Closing stock price as of February 27, 2017. 45,538,261 shares of common stock outstanding, debt & cash amounts as of February 24, 2017.
(3) Numbers may not total due to rounding. Total Adjusted EBITDA includes losses of $6 million related to Texadian operations that have been significantly wound down in 2016, and $3.7 million for entry into a settlement agreement to satisfy
certain obligations related to the Point Arguello Unit offshore California.
Closing Share Price $14.65
Shares Outstanding 45.5
Market Capitalization $667
Debt 410
Cash (38)
Net Debt 372
Total Enterprise Value $1,039
($ in millions, except per share data)
Adjusted EBITDA YE 2016
Refining $26
Logistics $26
Retail $29
Corporate & Other ($48)
Total Adjusted EBITDA (3) $33
Laramie Energy (Par Pacific Holdings investment)
Investment Book Value $109
2017 Exit Production (MMcfe/d) (1) 72
Net Operating Loss (NOL) Carryforwards
NOL Gross Balance $1,621
5
Refining Unit Capacity (MBPD)
Crude Unit 94
Vacuum Distillation Unit 40
Hydrocracker 18
Catalytic Reformer 13
Visbreaker 11
Hydrogen Plant (MMCFD) 18
Naphtha Hydrotreater 13
Cogeneration Turbine Unit 20 MW
Hawaii Refinery
Asset Highlights
Largest and most complex refinery in Hawaii
Distillate yield configured for Hawaii demand
Asset location and configuration favorably positioned to
benefit from cost-advantaged crude
Anticipated ability to meet environmental and regulatory
requirements without material capital expenditures
Identified opportunities to increase downstream
conversion and complexity
Asset Detail
2016 Crude Sourcing
2016 Yield Profile
6
Leader in Niche Hawaiian Market
Hawaii Air Travel(2)
____________________
(1) Source: DBEDT; EIA, including military demand per Par Pacific internal estimates.
(2) Source: Number of visitors per DBEDT.
Hawaii Refined Product Demand(1) Hawaii Refinery Yield
2016 2014
Shortage of available distillate capacity in Hawaii
Demonstrated yield flexibility since 2014
Air travel to and from Hawaii projected to continue to grow Fuel oil utilized for ~70% of electricity generation
(In Thousands)
Hawaii Petroleum Use(1)
MBbl/d
60 59
72
50
0
8
16
24
32
40
48
56
64
72
80
Other Products Distillate
Total Production
Total Demand
7,500
7,800
8,100
8,400
8,700
9,000
9,300
9,600
2014 2015 2016 2017E 2018E 2019E 2020E
7
Hawaii Refinery Operating Trends
Total Sales Volume Production Cost(1) Throughput Volume
Increased refinery throughput generates economies of scale with higher efficiency
and lower production cost
On-island demand and refining margin environment are the primary constraints for
refinery utilization as:
Enhancing on-island sales improves margin from favorable market pricing and
reduced cost of freight
Products export contribution is stronger in favorable market conditions
___________________
(1) Management uses production costs per barrel to evaluate performance and compare efficiency to other companies in the industry. There are a variety of ways to calculate production costs per barrel; different companies within
the industry calculate it in different ways. We calculate production costs per barrel by dividing all direct production costs, which include the costs to run the refinery including personnel costs, repair and maintenance costs,
insurance, utilities and other miscellaneous costs, by total refining throughput. Our production costs are included in Operating expense (excluding depreciation) on our condensed consolidated statement of operations, which also
includes costs related to our bulk marketing operations.
(MBbl/d) (MBbl/d) ($ / bbl)
$4.71
$3.41
$3.71 $3.74
$3.15
$5.42
$3.07
0.00
1.50
3.00
4.50
$6.00
2014 1H 2015 2H 2015 Q1 '16 Q2 '16 Q3 '16 Q4 '16
69
78
75
81
70 71
75
40
55
70
85
2014 1H '15 2H '15 Q1 '16 Q2 '16 Q3 '16 Q4 '16
68
78 77
74
78
54
75
40
55
70
85
2014 1H '15 2H '15 Q1 '16 Q2 '16 Q3 '16 Q4 '16
Turnaround Turnaround Turnaround
8
Mid Pacific Crack Spread and Differential
____________________
(1) Company calculation based on a rolling five-year average for the 4-1-2-1 Mid Pacific Crack Spread plus Mid Pacific Crude Differential
Mid Pacific Crude Differential is calculated as follows: Weighted average differentials, excluding shipping costs, of a blend of crudes with an API of 31.98 and sulphur wt% of 0.65% that is indicative of our typical crude mix
quality.
Mid Pacific 4.1.2.1 Crack Spread is calculated as follows: Singapore Daily: computed by taking 1 part gasoline (RON 92), 2 parts middle distillates (Sing Jet & Sing Gasoil), and 1 part fuel oil (Sing 180) as created from four
barrels of Brent Crude. San Francisco Daily: computed by taking 1 part gasoline (SF Reg Unl), 2 parts middle distillates (SF Jet 54 & SF ULSD), and 1 part fuel oil (SF 180 Waterborne) as created from four barrels of Brent Crude.
Daily: computed using a weighted average of 80% Singapore and 20% San Francisco. Month (CMA): computed using all available pr icing days for each marker. Quarter/Year: computed using calendar day weighted CMAs for
each marker.
Combined Mid
Cycle(1)
$8.32
Mid Pacific Crude Blend
4-1-2-1 Mid Pacific Crack Spread 80% Singapore, 20% San Francisco
-2
0
2
4
6
8
10
$12
1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16
9
Wyoming Refinery
Refinery Operations
2016 Product Profile(1) Refinery Asset Detail
Refining Unit Capacity (MBPD)
Crude Unit 18
Residual Fluid Catalytic Cracker 7
Catalytic Reformer 3
Alkylation 1
Naphtha Hydrotreater 3
Diesel Hydrotreater 6
Isomerization 4
Located in Newcastle, Wyoming
Complex refinery with a Nelson Complexity Index of 11.0
Increased processing capacity from 14,000 bpd to 18,000
bpd
Completed isomerization project in the second half of 2016
to drive additional value
Attractive light products yield over 95%
Over $95MM in capital invested over the last four years
to modernize, expand, and upgrade operations
____________________
(1) Based on the period following Par Pacific’s acquisition on July 14, 2016
10
Wyoming Crack Spread
____________________
(1) Company calculation based on a rolling three year average.
Wyoming 3-2-1 Index is calculated as follows:
Rapid City Daily: Computed by taking 2 part gasoline and 1 part distillate (ULSD) as created from a barrel of West Texas Intermediate Crude.
Denver Daily: Computed by taking 2 part gasoline and 1 part distillate (ULSD) as created from a barrel of West Texas Intermediate Crude. Pricing is based 50% on applicable product pricing in Rapid City, South Dakota, and 50% on
applicable product pricing in Denver, Colorado.
Daily: computed using a weighted average of 50% Rapid City and 50% Denver.
Mid Cycle(1)
$20.51
$4
$9
$14
$19
$24
$29
$34
1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16
Logistics Segment
12
30,000 Bbls
185,000 Bbls
138,000 Bbls
135,000 Bbls
12,000 Bbls
Hawaiian Assets Map Asset Highlights
Hawaii Logistics
Integrated system enhances flexibility and profitability
Difficult to replicate asset base
Multiple advantages from single point mooring
Increased safety and flexibility
Enhanced distribution capability
Additional uptime from wind and sea conditions
Recent asset investment anticipated to increase
logistics efficiency
Latin America
South America
North America
Middle East
Africa
Asia
Logistics network represents a critical
component of Hawaii operations
Asset Detail
Number of Terminals 8
Crude Storage Capacity (MMBbls) 2.4
Other Storage Capacity (MMBbls) 3.0
Number of Barges 3
Miles of Pipeline 27
____________________
(1) Figures represent offsite storage amounts.
(1)
Refinery
Terminal Crude Inflows
Crude Refined Products
Outflows
13
Wyoming Logistics
Logistics Assets
140-mile crude oil pipeline gathering system
providing direct access to Powder River Basin crude
40-mile products pipeline feeds into the Magellan
Products Line en route to Rapid City, South Dakota
Jet fuel terminal in Rapid City and pipeline
connecting to the Ellsworth Air Force Base
650 MBbls of crude and refined product tankage
with expansion opportunities identified
Truck racks and a loading facility at the refinery
Wyoming rig count up year over year in the first
quarter of 2017. Eight rigs operating in the Powder
River Basin as of February 24, 2017 (1)
Well-positioned to benefit from regional development
____________________
(1) Source: Baker Hughes North American Rig Count as of February 24, 2017
Retail Segment
15
Retail
Highlights
Extensive footprint across five islands in Hawaii
New local brand HELE
Existing retail and logistics network provides opportunity
for additional throughput growth
High real estate cost, scarcity of land, and logistics
complexity strengthen competitive position
Retail Network
Location
"76"
Brand
Tesoro
Brand
Hele
Brand
Unbranded Total
Oahu 28 3 26 3 60
Big Island 6 0 6 0 12
Maui 4 3 0 0 7
Kauai 3 0 0 8 11
Total 41 6 32 11 90
Laramie Energy
17
Anticipate lowering drilling and completion costs by 11% to
$0.8MM per well during 2017
Over 6,500 Williams Fork drilling locations across 151,000 net
acres, 81% held by production
Wet gas production and processing contracts provide exposure
to improving NGL markets
Self-funded 2 rig drilling program based on current strip prices,
hedges and revolver capacity
80% of projected existing gas production hedged through
December 2018; unhedged on liquids starting in January 2017
Asset Highlights
Laramie Energy
Mid Year Reserve Update
____________________
(1) Laramie Debt is non-recourse to Par Pacific and solely guaranteed by a Par Pacific subsidiary that owns Laramie Energy.
(2) Based on 2017 two rig staggered capital plan.
(3) Pro forma for small bolt-on acquisition completed during 3Q 2016.
(4) See Appendix for Non-GAAP reconciliation of Laramie Adjusted EBITDAX to the most directly comparable GAAP financial measure.
(5) See Appendix for Laramie year end reserves and PV10 summary.
Key Statistics
Value Creation Initiatives During 2016
Delivered on cost reduction initiatives
Restructured gathering, processing and transportation
agreements reducing costs and improving netbacks on NGLs in
active development area for 2017 & 2018:
Anticipate GPT costs to decline starting 4Q 2017 more than
$0.15 / Mcfe in development area
Expect NGL netbacks to improve by more than to $2.00 / bbl
starting 4Q 2017 in development area
PV10 of 2016 Proved Reserves increased 174% compared to
2015 despite a decrease in commodity prices (5)
Unit Costs
18
1 rig program commenced December 2016 and expect to add
second rig during 2Q 2017
Anticipated completions and production growth weighted to
back half of 2017
Anticipated production growth range of 14% to 28% for 2017
exit vs. 2016 exit based upon staggered 2 rig program
Expect to fund outspend of hedged 2017 cash flow based on
current strip prices with revolver capacity, while holding
leverage profile at 3.0x debt / Adj. EBITDA through 2017
Evaluating adding 3rd and 4th rig in second half of 2017
2017 Plans
Laramie Energy
____________________
Note: Figures may not sum to total due to rounding.
(1) Figures for 100% of Laramie Energy based upon 2017 two rig staggered capital plan .
Production Profile (1)
(MMcfe/d)
Drilling Pattern & Completion Design Evolution
During 2015 and 2016 Laramie drilled wells down to 10 acre
spacing drilling 3 pads per section or 63 wells
Increased average frac volume per well up to 100,000 bbls of
water and removed sand from completion design
Three column spacing paired with increased stimulation
resulted in EURs in the 1.3 Bcfe range
Redesigned two column development spacing to 15 acres and
further increased frac sizes up to 115,000 bbls (“Generation 2”)
with target EURs of 1.7 to 2.0 Bcfe
Generation 2 development design commenced in December
2016 with initial results expected in 3Q 2017
Three Columns Per Section Two Columns Per Section
110 Bcf of Gas In Place per Section
Generation 1
• 63 Wells/Section; 1760’ between columns
• 10.2-acre drainage ; 75% Recovery Efficiency
• 82 Bcfe recovered; 1.3 Bcfe/well
Generation 2
• 42 Wells/Section; 2640’ between columns
• 15-acre drainage ; 65-75% Recovery Efficiency
• 71-84 Bcfe recovered; 1.7 – 2.0 Bcfe/well
Financial Overview
20
____________________
Note: Adjusted EBITDA is a non-GAAP financial measure. See the Appendix for a reconciliation to the most directly comparable GAAP financial measure.
Par Pacific Adjusted EBITDA and Indexes
Mid Pacific 4-1-2-1 Wyoming 3-2-1
21
Debt Organizational Chart with Loan Balances
Hermes Consolidated, LLC
d/b/a Wyoming Refining
Company
Term Loan $53MM
Revolver $18.3MM
Mid Pac Petroleum, LLC /
HIE Retail, LLC
Term Loan $95MM
Revolver $0
Par Wyoming Holdings, LLC
Term Loan $67MM
Par Pacific Holdings, Inc.
Convertible Notes $115MM
Term Loan $60MM
As of 2/24/17
Note: Revolver balances are amounts outstanding
22
Net Operating Loss Carryforward
Differentiated Asset
Relative to Peers
Potential to Enhance
Cash Flow with Growth
Provides a Competitive Advantage
for Growth Opportunities
$1.6 billion NOL generates potentially significant value for Par Pacific
Selected Benefits Illustrative Value to Par
($ in millions)
(1)
____________________
(1) Assumes $1.6 billion NOL and 35% tax rate.
Appendix
24
Laramie Energy Hedging Program
2017 2018
NYMEX Fixed Price Swap
Hedged Volume (MMBtu/day) 83,240 75,072
Average Floor Price ($/MMBtu) $2.605 $2.605
CIG Basis Swap
Hedged Volume (MMBtu/day) 83,240 75,072
Average CIG Differential to NYMEX ($0.267) ($0.259)
Northwest Rockies Pipeline Swap
Hedged Volume (MMBtu/day) 2,500 --
Price ($/MMBtu) $3.18 --
Northwest Rockies Pipeline Collar
Hedged Volume (MMBtu/day) 7,500 2,500
Collar ($/MMBtu) $3.00 - $3.25 $3.00 - $3.25
25
Year End Reserves and PV10 Summary – 100% of Laramie Energy
Laramie Energy Reserves Update
____________________
Note: Par Pacific Holdings owns 42.3% of Laramie Energy, LLC
Reserves information based on audit by Netherland Sewell & Associates unless otherwise noted
(1) NGLs and Oil converted to gas based on 6:1 ratio
(2) Based on NYMEX strip pricing as of December 31, 2016 held flat after five years also adjusted for NWROX basis of ($0.24). See "Non-GAAP PV10 and PV20 Disclosure" for additional discussion.
(3) Based on North West Wyoming Pool SEC pricing as of December 31, 2016 adjusted for location basis of ($0.015). See "Non-GAAP PV10 and PV20 Disclosure" for additional discussion.
(4) All PUD locations conform to SEC standards.
(5) Based on Laramie Energy, LLC internal reserves
(6) Proved reserves only
Pricing Summary
Gas Oil NGL Total PV10 PV20
(BCF) (MMBBL) (MMBBL) (BCFE)(1) ($MM) ($MM)
PDP 369 1 10 436 $253 $185
PDNP 8 0 0 10 $3 $1
PUD(4) 393 1 11 467 $82 $6
Total Proved (1P) 770 2 21 913 $338 $192
Gas Oil NGL Total PV10(2) PV20(2)
(BCF) (MMBBL) (MMBBL) (BCFE)(1) ($MM) ($MM)
PDP 392 1 10 462 $394 $292
PDNP 9 0 0 10 $5 $2
PUD(4) 424 1 12 502 $187 $69
Total Proved (1P) 824 3 22 974 $586 $364
Probable(5) 6,173 21 170 7,317 $1,674 $345
Total Proved + Probable (2P) 6,997 24 192 8,292 $2,260 $709
NYMEX Price Deck and Parameters
SEC Price Deck and Parameters
Average Price Received YE16 SEC YE16 NYMEX(6)
Oil Price ($/Bbl) $38.75 $52.05
Gas Price ($/Mcf) $2.41 $2.87
Natural Gas Liquids ($/Bbl) $14.49 $19.10
Gas Price ($/MMBTU) Condensate ($/BBL)
Average Annual Price YE16 SEC(3) YE16 NYMEX YE16 SEC YE16 NYMEX
2017 $2.29 $3.61 $42.75 $56.19
2018 $2.29 $3.14 $42.75 $56.59
2019 $2.29 $2.87 $42.75 $56.10
2020 $2.29 $2.88 $42.75 $56.05
Thereafter $2.29 $2.90 $42.75 $56.21
Assumed Pricing
26
810415_1.wor - NY008HT3
MESA
RIO BLANCO
GARFIELD
Collbranll rollb anllll rro lb anlo lb an
De Beque que que que
SiltiltilililttilililRiflelfRi lellffRiRi lelle
New Castlelt Cas lelltt C Cas lelas le
Battlement Mesal tt tle en esal l tt ttt tle en esal le en esa
Palisadelialisadelilialisadelialisade
CliftonftCli onftftCliCli onon
Fruitvalei lr tF ui valei li lr tr tF ui valei lF ui vale
Redlandsldlandslldlandsldlands
Rangelylngelyllngelylngely
Meekerreekerreekeeeke
Fruitair tF ui aiir tr tF ui aiF ui a
Laramie Energy Acreage
810415_1.w or - NY008HT3
Adams
Elbert
Lake
Eagle
Pitkin
Weld
Jackson
Garfield
Rio Blanco
Costilla
Las Animas
Moffat
Routt
Lincoln
Washington
Kiowa
BentOtero
Pueblo
Custer
Huerfano
Alamosa
Rio Grande
Hinsdale
Ouray
San Juan
San Miguel
La Plata
Dolores
Montezuma
Montrose
Delta
Chaffee
Gunnison
Mesa
Nebraskarrreb aska
New Mexico i i ie exico i
Wyomingiiiyo ingi
Coloradol rll rrolo adol
Utahtttah
Denver
Cheyenne
Arapahoe
Archuleta
Baca
Boulder
Cheyenne
Conejos
Crowley
El Paso
Fremont
Grand
Kit Carson
Larimer
Logan
Mineral
Morgan
Park
Phill ips
Prowers
Saguache
Sedgwick
Teller
Yuma
Colorado
All of Laramie's acreage is located in Rio Blanco,
Garfield and Mesa Counties, Colorado
North Area - Rio Blanco County
Central Area - Garfield County
South Area - Collbran, Mesa County
Over 23,000 net mineral acres
Over 26,000 fee surface acres
Laramie’s
Core
Acreage
North Central South Lease Acreage:
70
70 Garfield Mesa Rio Blanco
Net Co. Net Net Co. Net Net Co. Net %
2016 280 280 1,553 1,547 0 0 1.3%
2017 242 242 2,115 2,115 0 0 1.7%
2018 0 0 0 0 480 480 0.4%
2019 0 0 3 3 2,286 457 0.3%
2020 3,712 742 97 97 80 16 0.6%
Totals 4,234 1,264 3,768 3,762 2,846 953 4.4%
Acreage Expiration Summary
27
Capitalization Detail
($ in millions)
Facility Borrower
Amount
Outstanding
(2/24/2017)
Undrawn
Amount
Amortization
(Years) Maturity Interest Rate
Term Loan Par $60.4 - NA 7/11/2018 10.00% (12.00% PIK)
Hawaii Retail Credit Facilities Retail $95.3 - 10.00 12/17/2022 L + 3.00%
Retail Revolver Retail $0.0 $5.0 NA 12/17/2020 L + 3.00%
5% Convertible Senior Notes due 2021 Par $115.0 - NA 6/21/2021 5.00%
Wyoming Refining Senior Secured Term Loan WRC $53.4 - 6.25 4/30/2018 L + 3.00%
Wyoming Refining Senior Secured Revolver WRC $18.3 $9.2 NA 4/30/2018 L + 2.25%
Par Wyoming Holdings Term Loan
Par Wyoming
Holdings
$67.3 - NA 7/14/2021 L + 9.5% (L + 13% PIK)
28
Maturity Profile
($ in millions)
29
Annual Gross Margin Impact of $0.1/gallon Change In RIN Price
$0.09
$0.34
$0.12
$0.19
$0.06 $0.06
$0.19
$0.07
$0.09 $0.09
$0.00/Bbl
$0.05/Bbl
$0.10/Bbl
$0.15/Bbl
$0.20/Bbl
$0.25/Bbl
$0.30/Bbl
$0.35/Bbl
$0.40/Bbl
ALJ CVRR DK HFC MPC PARR PBF TSO VLO WNR
Annual Gross Margin Impact per Barrel
$0.1/gallon change in RIN price
Source: 2016 Barclay's U.S. Independent Refiners RIN Report & Company data
30
Non-GAAP Financial Measures
Consolidated Adjusted EBITDA and Adjusted Net Income (Loss) Reconciliation (1)
($ in thousands)
_____________________________________________
(1) We believe Adjusted Net Income (Loss) and Adjusted EBITDA are useful supplemental financial measures that allow investors to assess: (1) the
financial performance of our assets without regard to financing methods, capital structure or historical cost basis, (2) the ability of our assets to
generate cash to pay interest on our indebtedness, and (3) our operating performance and return on invested capital as compared to other
companies without regard to financing methods and capital structure. Adjusted Net Income (Loss) and Adjusted EBITDA should not be considered in
isolation or as a substitute for operating income (loss), net income (loss), cash flows provided by operating, investing and financing activities, or other
income or cash flow statement data prepared in accordance with GAAP. Adjusted Net Income (Loss) and Adjusted EBITDA presented by other
companies may not be comparable to our presentation as other companies may define these terms differently.
2015 2016
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Net income (loss) $ 462 $ 11,723 $ 14,740 $ (66,836 ) $ (18,673 ) $ (13,088 ) $ (27,761 ) $ 13,687
Adjustments to Net income (loss):
Inventory valuation adjustment (2,179 ) 44 (10,762 ) 19,586 18,322 (1,059 ) 7,324 516
Unrealized loss (gain) on derivatives 2,406 (1,980 ) 4,360 6,110 992 (8,406 ) 1,117 (5,737 )
Acquisition and integration expense 1,061 470 280 195 671 845 2,047 1,731
Increase in (release of) tax valuation allowance — (18,585 ) 295 1,531 — (8,573 ) — —
Loss on termination of financing agreements — 19,229 — 440 — — — —
Change in value of common stock warrants 5,022 (3,313 ) 1,023 932 (1,644 ) (1,176 ) (657 ) 515
Change in value of contingent consideration 4,929 9,495 4,255 (229 ) (6,176 ) (3,552 ) (1,025 ) (17 )
Impairment expense — — 9,639 — — — — —
Adjusted Net Income (loss) 11,701 17,083 23,830 (38,271 ) (6,508 ) (35,009 ) (18,955 ) 10,695
Depreciation, depletion and amortization 3,251 5,005 4,596 7,066 5,095 5,100 9,643 11,778
Interest expense and financing costs, net 5,557 5,825 4,387 4,387 4,613 6,106 11,232 6,555
Equity losses (earnings) from Laramie Energy, LLC 1,826 2,950 1,355 49,852 1,871 16,948 (3,659 ) 7,222
Income tax expense (benefit) 65 (22 ) 174 (246 ) 336 89 30 205
Adjusted EBITDA $ 22,400 $ 30,841 $ 34,342 $ 22,788 $ 5,407 $ (6,766 ) $ (1,709 ) $ 36,455
31
Non-GAAP Financial Measures
Consolidated Adjusted EBITDA and Adjusted Net Income (Loss) Reconciliation (1)
For the year-ended December 31, 2016
($ in thousands)
_____________________________________________
(1) Refer to description of Adjusted Net Income (Loss) and Adjusted EBITDA on the previous slide.
Net loss $ (45,835 )
Adjustments to Net Loss:
Unrealized gain on derivatives (12,034 )
Acquisition and integration expense 5,294
Release of tax valuation allowance (8,573 )
Change in value of common stock warrants (2,962 )
Change in value of contingent consideration (10,770 )
Inventory valuation adjustment 25,101
Adjusted Net Loss (49,779 )
Depreciation, depletion and amortization 31,617
Interest expense and financing costs, net 28,506
Equity losses from Laramie Energy, LLC 22,381
Income tax expense 661
Adjusted EBITDA $ 33,386
32
Non-GAAP Financial Measures
Consolidated Adjusted EBITDA by Segment Reconciliation (1)
For the year-ended December 31, 2016
($ in thousands)
Refining Logistics Retail
Corporate,
Texadian and
Other
Operating income (loss) $ (7,840 ) $ 21,422 $ 22,194 $ (52,368 )
Adjustments to operating income (loss):
Unrealized loss (gain) on derivatives (12,438 ) — — 404
Acquisition and integration expense — — — 5,294
Inventory valuation adjustment 29,056 — — (3,955 )
Depreciation, depletion and amortization 17,565 4,679 6,372 3,001
Adjusted EBITDA $ 26,343 $ 26,101 $ 28,566 $ (47,624 )
_____________________________________________
(1) Adjusted EBITDA by segment is defined as operating income (loss) by segment excluding unrealized (gains) losses on derivatives, inventory valuation
adjustment, acquisition and integration expense, and depreciation, depletion and amortization expense. We believe Adjusted EBITDA by segment is a
useful supplemental financial measure to evaluate the economic performance of our segments without regard to financing methods, capital structure
or historical cost basis. Adjusted EBITDA by segment presented by other companies may not be comparable to our presentation as other companies
may define these terms differently.
33
Laramie Energy Adjusted EBITDAX
(in thousands)
Note: We believe Laramie’s Adjusted EBITDAX is a useful supplemental financial measure because it allows investors to more effectively evaluate Laramie’s operating
performance as compared other companies without regard to financing methods and capital structure. Adjusted EBITDAX is also a material component used in
measuring compliance with the covenants contained in Laramie’s existing credit agreement. Laramie excludes the items listed above from net income (loss) in arriving at
Adjusted EBITDAX because these amounts can vary substantially from company to company within the oil and gas industry depending upon, among other things,
accounting methods and capital structures. Adjusted EBITDAX excludes the effect of bonus accrual, equity-based compensation expense, and abandoned property and
expired lease expense and therefore differs from Non-GAAP financial measures used by Par that do not exclude the effects of these items. Adjusted EBITDAX should not
be considered in isolation or as a substitute for operating income (loss), net income (loss), or other income or cash flow statement data prepared in accordance with
GAAP. Adjusted EBITDAX presented by other companies may not be comparable to Laramie’s presentation as other companies may define terms differently.
Three months
ended
Three months
ended
September 30, December 31,
2016 2016
$ 5,057 $ (20,666)
Commodity derivative (gains) / losses (11,743) 20,003
Gains (losses) on settled derivative
instruments (923) (2,474)
Interest expense 1,017 989
Non-cash preferred dividend 946 975
Depreciation, depletion, amortization, and
accretion 13,986 8,973
Exploration expense 28 46
Bonus accrual 663 749
Equity based compensation expense 1,605 1,095
(Gain) / Loss on Disposal of assets (375) (248)
Pipeline Deficiency 1,432
Expired Acreage (Non-cash) 2,081
$ 10,259 $ 12,954
Net (loss) income
Total Adjusted EBITDAX
34
Non-GAAP PV10 and PV-20 Disclosure
Non-GAAP PV10 and PV20 Disclosure
PV10 and PV20 are considered non-GAAP financial measures under SEC regulations because they do not include the effects of
future income taxes, as is required in computing the standardized measure of discounted future net cash flows. However, our
PV10/PV20 and our standardized measure of discounted future net cash flows are equivalent as we do not project to be taxable
or pay cash income taxes based on our available tax assets and additional tax assets generated in the development of reserves
because the tax basis of our oil and gas properties and NOL carryforwards exceeds the amount of discounted future net
earnings. PV10/PV20 should not be considered a substitute for, or superior to, measures prepared in accordance with U.S.
generally accepted accounting principles. We believe that PV10 and PV20 are important measures that can be used to evaluate
the relative significance of our natural gas and oil properties to other companies and that PV10 and PV20 are widely used by
securities analysts and investors when evaluating oil and gas companies. PV10 and PV20 computed on the same basis as the
standardized measure of discounted future net cash flows but without deducting income taxes.