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Northern Tier Energy lowers Q3 throughput guidance after refinery fire

  • Trading in Northern Tier Energy (NTI -7.5%) resumes after a brief halt.
  • Shares had been weak all day in response to news of a fire yesterday at one of its crude oil units at its St. Paul Park, Minn., refinery, which accounts for 94% of NTI's operating income.
  • NTI says preliminary estimates indicate the outage will last 3-4 weeks and repair costs should total less than $10M; updates Q3 throughput guidance to 78K-81K bbl/day from earlier 90K-95K bbl/day.
Comments (11)
  • CincinnatiRick
    , contributor
    Comments (356) | Send Message
     
    I understand that both the cost of repair and the production shortfall are covered by insurance. Does anyone have a different take? And if so, is this a buying opportunity?

     

    Long NTI and thinking of adding.
    23 Sep 2013, 03:39 PM Reply Like
  • dan1944
    , contributor
    Comments (54) | Send Message
     
    i already did.
    23 Sep 2013, 03:40 PM Reply Like
  • CallCalendar
    , contributor
    Comments (17) | Send Message
     
    Their business interruption insurance doesn't kick in for 60 days, which is longer than they say the repairs will take.
    24 Sep 2013, 03:52 AM Reply Like
  • CincinnatiRick
    , contributor
    Comments (356) | Send Message
     
    Kicking myself for not acting sooner....it was back up to 18.50 before I pulled the trigger.
    24 Sep 2013, 02:27 PM Reply Like
  • taxman100
    , contributor
    Comments (247) | Send Message
     
    I read the press release - sounds like they are restarting their smaller line today, and will begin the maintenance planned for October immediately.

     

    So, thru-put should be down in Sept, but higher in October than originally planned.

     

    Stock is voilatile right now.
    23 Sep 2013, 03:50 PM Reply Like
  • R.A.L.M
    , contributor
    Comments (26) | Send Message
     
    I buy a few days ago convinced that it was the right time, now I hope that October will be better. There is one article saying that this stock is infected with a lot of short sale.
    23 Sep 2013, 04:07 PM Reply Like
  • Richard Waldren
    , contributor
    Comments (221) | Send Message
     
    For what it is worth I would think NTI would drift lower for a few days , then hold steady. Long NTI and holding.
    23 Sep 2013, 11:35 PM Reply Like
  • CCC999
    , contributor
    Comments (47) | Send Message
     
    Doing the turnaround now is making lemonade from lemons (the fire). Thepress release indicates they can meet their commitments. They also budget for planned downtime, which this was. I also assume there is insurance. I also agree that the hedgies are short. The pressure to cover will increase as we near the ex-date.
    I am long NTI.
    24 Sep 2013, 08:07 AM Reply Like
  • Robert Hennecke
    , contributor
    Comments (534) | Send Message
     
    I now firmly believe that the commentary exceeds the value of the 'articles' as the jousting of opposing views by individual investors permits the observer to come to the best possible conclusion independent of the spins of those intent on manipulating a given stock for their own purposes (hedge funds, brokerage houses and possibly article writers). NTI is an excellent case of the commenters getting down to brass tacks and making their respective cases albeit occasionally in harsh terms. I think it will be ,75 $ Q 3 and 1,3 $ Q 4 due to the increased volume capacity and the widening WCS-wti spread = 26,25 due to NTI and other refiners cutting back on demand due to things such as the 'catastrophic' NTI fire. Brent WTI is ~ 5$ now.
    24 Sep 2013, 02:56 PM Reply Like
  • Robert Hennecke
    , contributor
    Comments (534) | Send Message
     
    I'm now working on unwinding my various entries into NTI in an incremental manner taking into consideration the likely trading range of 18 to 21 $. A grim but possible task which is a rescue mission in reality in multiple stages.

     

    The multiple sales of shares by the insider partners makes this an unfair scenario overlaid onto what is already a difficult to keep track situation given the high number of variables involved that shift so rapidly. One can't possibly know what is going on a day to day basis in terms of what was bought and sold at ever shifting prices. Being hammered by at least the dividend amount by the inevitable partner selloffs dramatically undermines the benefits of being a 'partner' of NTI.
    25 Sep 2013, 04:02 PM Reply Like
  • taxman100
    , contributor
    Comments (247) | Send Message
     
    Based upon my knowledge of thru-put and spreads, I don't see how (at least prior to the fire) that they wouldn't have a $1 distribution next quarter.

     

    I know a lot of commenters say crack spreads are narrowing, and they are, but the spreads I've seen are all for refiners in the Gulf Coast area, which is not exactly pertinent to NTI.
    25 Sep 2013, 12:53 AM Reply Like
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