Calumet Specialty Products Partners (CLMT -1.1%) names West Griffin as its new CFO, effective immediately, replacing Patrick Murray, who will serve in a new position of VP and chief accounting officer.
Griffin joins CLMT from Energy XXI, where he was one of the three founders and also served as CFO during 2005-14; prior to joining Energy XXI, he was CFO at Alon USA.
Calumet Specialty Products (CLMT +3.2%) is upgraded to Neutral from Underperform with a $5 price target at Credit Suisse, which says units have fallen too far.
The firm says CLMT still has a great deal of risk and bankruptcy is not impossible, especially in the event of an economic downturn, but believes there is now potential equity upside for CLMT, even using a conservative estimate of ~$230M of annual EBITDA during 2017-20.
Credit Suisse leaves its $5 target unchanged for now, but note that if CLMT is able to hit the $350M-$400M EBITDA implied by $150M-$200M of targeted self-help, it would add another $4-5$/unit of additional upside beyond its target.
Billionaire investor Carl Icahn has called on the EPA to make changes to the market for renewable fuel credits or else risk "the mother of all short squeezes" that could bankrupt refiners.
"The RIN market is the quintessential example of a 'rigged' market where large gas station chains, big oil companies and large speculators are assured to make windfall profits at the expense of small and midsized independent refineries which have been designated the 'obligated parties' to deliver RINs."
Calumet Specialty Products Partners (NASDAQ:CLMT) sells its 50% equity interest in the Dakota Prairie Refining joint venture to MDU Resources Group (NYSE:MDU), which then sells the entire JV to Tesoro (NYSE:TSO).
TSO winds up acquiring Dakota Prairie Refining in exchange for the continued servicing of DPR's $66M term loan debt and ~$10M towards working capital.
DPR's refinery has a crude oil capacity of 20K bbl/day and produces ultra-low sulfur diesel, naphtha and resid; TSO says it will continue to market the ultra-low sulfur diesel to local customers and utilize the naphtha and resid in its integrated value chain system.
MDU Resources (MDU -0.2%) and Calumet Specialty Products Partners (CLMT +3.5%), joint owners of the Dickinson refinery - the first North Dakota refinery to be built since the 1970s - say they may try to sell it.
MDU says it lost $7.2M on the 20K bbl/day refinery, which opened a year ago, during Q1 and is now running at 75% capacity due to high operating costs and reduced demand for diesel, Dickinson's primary product.
CLMT CEO Tim Go said in today's earnings conference call that the company has started a "comprehensive review of our existing assets," including the refinery, which has “underperformed” with “consistent challenges.”
The oil price slump has eroded demand for diesel across North Dakota as fewer wells are brought online, resulting in fewer diesel-powered trucks and other equipment in operation.
Calumet Specialty Products Partners (CLMT +2.7%) is higher after reporting a Q1 loss that was not as bad as feared after pre-announcing weaker than expected operating results last month.
CLMT says benchmark crack spreads in April improved from Q1, an early indication of improved market conditions in its fuel products segment, and it expects to sell "significant volumes" of heavy residual products to its customers during Q2 and Q3 as asphalt paving and roofing season begins.
DA Davidson upgrades shares to Neutral from Underperform with a $5 price target, citing the sharp pullback in recent weeks and the potential for self-help initiatives, although Q1 results saw little improvement as fuel refining margins remained under pressure; the firm downgraded CLMT less than a month ago.