Northern Tier Energy And Western Refining Merger Headed For A Train Wreck?
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Wed, May 18, 2:12 PM
- Western Refining (WNR +3.7%) is higher following news that it secured a new $500M senior secured term loan credit facility, which it expects to close concurrent with the successful closing of its Northern Tier Energy (NTI +1.5%) acquisition in late June.
- WNR says it plans to use the proceeds from the Term Loan B-2 to partially fund the NTI takeover.
- Now read Western Refining to acquire Northern Tier Energy: A sure bet
Tue, May 3, 8:57 AM
- Northern Tier Energy (NYSE:NTI) -5.6% premarket after missing expectations for Q1 earnings and revenues, and canceling its cash distribution for the quarter.
- NTI says weak margins and tight crude oil differentials significantly reduced its Q1 cash flow from operations, resulting in a cash available for distribution deficit of $11.5M.
- NTI expects Q2 total capex of $26M-$31M, including $16M-$19M for organic growth projects.
- NTI projects total throughput of 95K-98.5K bbl/day at its St. Paul Park refinery.
- Now read No upside for Northern Tier shareholders in its merger with Western Refining
Mon, Apr. 11, 12:57 PM
- Apart from the end of seasonal trade, the biggest reason to sell refiner holdings this summer is the increasing likelihood of recession in 2017 and more so in 2018, Credit Suisse says, also expressing concern about deterioration of diesel margins.
- Credit Suisse expects tight butane blending spreads and stock specific maintenance will have a negative impact on the already weak performance of U.S. independent refiners in 2016.
- The firm downgrades "sector bellwether" Valero Energy (VLO -2.5%), Alon USA Partners (ALDW -1.3%), Northern Tier Energy (NTI -0.8%) to Neutral from Outperform and Calumet Specialty Products Partners (CLMT -2.9%) to Underperform from Outperform.
- Now read The best of the best in the refining industry
Dec. 21, 2015, 5:47 PM
- Northern Tier Energy (NYSE:NTI) +9.1% AH after Western Refining (NYSE:WNR) agrees to acquire the ~62% of the company it does not already own in a revised offer that values NTI at $2.43B.
- NTI unitholders will now receive $15/share in cash and 0.2986 of a share of WNR for each unit held; in October, WNR offered $17.50/share in cash and 0.2266 of a share for each NTI unit.
- The companies say the merger will result in a diversified refining asset base with three top tier refineries that have direct pipeline access to advantaged crude oil basins, and that the deal includes increased flexibility to sell NTI traditional logistics assets to Western Refining Logistics (NYSE:WNRL).
Dec. 16, 2015, 12:13 PM
- Congress has agreed to lift the 40-year-old ban on crude oil exports, but refiners are holding up well as the group wins a tax break on the cost of transporting oil as part of the deal.
- The tax provision meant to blunt potential damage to domestic refiners of allowing unfettered crude exports would allow non-integrated refiners to count 75% of their oil transportation costs toward an existing manufacturing tax deduction.
- Refiners are "positioned to succeed regardless,” says Carl Larry, head of oil and gas for Frost & Sullivan. “They can still make products cheaper than anywhere in the world... Regardless of whether the U.S. exports crude, they’ll be ahead of the game.”
- Wells Fargo contends that lifting the ban will have only a minimal impact in the short term, and notes that Phillips 66 (PSX +1.6%) has indicated lifting the move would have no material impact at least for one year; Valero Energy (VLO +1.2%) is better positioned than most because it already relies on a larger percentage of foreign oil for its feedstock to make gasoline and other petroleum products, says Simmons analyst Jeff Dietert.
- Also: TSO +2.5%, MPC +0.9%, HFC +2.4%, PBF +1.6%, WNR +4.9%, NTI +1.6%, ALJ +1%, CLMT -2.2%.
- Earlier: Solar stocks soar as Congress proposes extending solar/wind tax credits
Dec. 4, 2015, 12:41 PM
- Credit Suisse analyst Edward Westlake says favorable market conditions that drove the oil refining business this year will carry over into next year, making many refiner stocks strong buys.
- Global gasoline demand grew at 3x its historical rate in 2015, and while consensus expectations for gasoline demand predict a regression closer to the long-term trend in 2016, Westlake sees at least another year of strong demand growth remaining.
- The analyst says he has been surprised at Q4 performance so far , and predicts a 2016 environment conducive to earnings strength, especially among coastal names.
- Credit Suisse has Outperform ratings on these refiners: VLO +1.6%, NTI +0.5%, CLMT +1.5%, MPC +3%, TSO +1.2%, ALDW -2.3%, WNR +1.6%, PBF +0.2%, DK +1.7%.
Oct. 26, 2015, 9:15 AM
Oct. 26, 2015, 7:28 AM
- Western Refining (NYSE:WNR) says it has offered to buy the shares of Northern Tier Energy (NYSE:NTI) it does not already own in a deal that values the refiner at ~$2.52B.
- WNR, which currently has a ~38% stake in NTI, says it has offered $17.50 in cash and 0.2266 of its share for each NTI unit.
- NTI +9.1% premarket.
Feb. 26, 2015, 3:45 PM
- Western Refining (WNR +7.9%) is one of the day's strongest energy gainers after Q4 earnings came in well ahead of estimates, and its Western Refining Logistics (WNRL +2.9%) and 38%-owned Northern Tier Energy (NTI +5.3%) also delivered upbeat Q4 results (I, II).
- Cowen analyst Sam Margolin reiterates an Outperform rating and $60 price target on WNRL, encouraged by management's affirmation that the MLP’s growth remained on track, including a 50% target for third party revenues, with projects slated to begin as far out as 2018.
- WNRL’s share price has lagged by a wide margin YTD, weighing on WNR’s valuation, but WNR is nearing completion of the Tex-New Mex pipeline, while the Bobcat pipeline remains on schedule; including potential dropdowns from NTI, Margolin sees $100M WNRL EBITDA growth by early 2016.
Dec. 15, 2014, 12:33 PM
- BofA Merrill analyst Doug Leggate stays cautious on the refining sector for 2015, although he sees a bullish opportunity in Phillips 66 (PSX +0.5%), which he upgrades to Buy from Neutral with a $90 price target.
- The expected recognition of value risks being materially overhyped compared to what is currently being recognized by MLPs, the analyst says, adding that absence of guidance on the cost impact on the remaining business, limited guidance on tax and lack of precision on disclosure prompts skepticism that the market is not getting ahead of itself.
- Leggate downgrades HollyFrontier (HFC -1.5%) to Neutral from Buy, and PBF Energy (PBF -1.9%) and Delek US (DK -1.9%) to Underperform from Neutral; he also lowers stock price targets for the three, as well as for Valero (VLO +0.4%), Northern Tier (NTI -2.5%) and Marathon Petroleum (MPC -1.1%).
Jul. 7, 2014, 3:27 PM
- Western Refining (WNR +1.9%) is upgraded to Buy from Neutral with a $55 price target, raised from $43, at Citigroup, which sees a potential restructuring helping to unlock shareholder value.
- Citi believes WNR could restructure into a holding company with the limited and general partnership interests in Northern Tier Energy (NTI -0.9%) and Western Refining Logistics (WNRL -1.4%), which would allow WNR to generate a ~10% free cash flow yield over its forecast period.
Jun. 25, 2014, 10:18 AM
- Refiners take a beating in early trading, as a lift of the ban on U.S. oil exports is expected to narrow the WTI-Brent spread, which could cause refiners' profits drop if they are forced to pay higher prices to compete with international buyers for U.S. crude.
- “We don’t think the current system needs to be changed,” Valero Energy tells Bloomberg.
- Yesterday's rulings gave Pioneer Natural Resources (PXD +2.6%) and Enterprise Products Partners (EPD +1.4%) permission to ship ultralight oil to foreign buyers - a narrow ruling, but one that is likely to spark similar requests from other companies, and increase lobbying for a full lifting of the 40-year-old ban on exporting crude oil.
- Refining stocks are broadly lower: VLO -7.4%, PBF -5.8%, MPC -5.7%, WNR -5.5%, DK -5.4%, HFC -4.6%, ALDW -4.6%, TSO -3.8%, NTI -3.5%, PSX -2.9%, ALJ -2.7%, CVI -2.3%.
Mar. 10, 2014, 12:31 PM
- Barron's touted high-yield energy plays CVR Refining (CVRR +4.6%) and Northern Tier Energy (NTI +0.9%) over the weekend as looking attractive on a long-term perspective after both currently go for just 6x this year's projected earnings.
- Wall Street analysts estimate NTI will pay out 44% of its unit price in total over three years through 2016; for CVRR, estimated payments over three years work out to 37% of its recent price.
- Average analyst price targets suggest 13% upside for NTI over the next year and 19% for CVRR; add that to projected yields this year of 15% for each, and the result is potential for returns of more than 30%.
Dec. 31, 2013, 3:56 PM
- The energy sector - especially refiners - leads the stock market higher today even as crude oil trades lower, with Phillips 66 (PSX +3.2%) contributing to the strength after Berkshire Hathaway agreed to acquire its flow improver business (I, II).
- Berkshire's acquisition would seem to point to the next logical step for Warren Buffett’s empire building in the energy sector: investing in pipelines and, at the other end, the refineries that stand to benefit most from them.
- Today's refining stalwarts: VLO +3.7%, MPC +3.8%, HFC +2%, TSO +3.4%, WNR +3.1%, CVI +2.9%, ALJ +2.8%, NTI +2.8%.
Dec. 20, 2013, 3:18 PM
- Shrinking crude spreads - WTI has gained 7.2% while Brent has risen just 1.7% so far in December - likely will hold back refiners during the first six months of 2014, Cowen's Sam Margolin says.
- Extremely favorable refining conditions from last month are deteriorating amid higher utilization and continued reduction in crude imports, limiting supply and causing U.S. prices to melt higher, the firm explains, adding that investors need to "manage near-term expectations" while "remain(ing) constructive on the refining story for 2014."
- Margolin keeps Outperform ratings for Western Refining (WNR +4%), Marathon Petroleum (MPC +2.6%), Tesoro (TSO +0.4%), Valero (VLO +1.4%) and PBF Energy (PBF +1.7%); HollyFrontier (HFC +2.4%), Delek (DK +2.3%), Northern Tier (NTI +0.6%), Alon USA (ALJ +1.7%) and Calumet Specialty Products (CLMT +3.8%).
Dec. 11, 2013, 12:52 PM
- Tesoro (TSO -1.8%) apparently didn't offer enough good news at yesterday's analyst day, as shares tumble despite the general perception from the meeting as "incrementally positive."
- The key messages in the meeting surrounded progress of the synergy capture from the Carson acquisition, continued margin improvement through feedstock and product optimization and driving additional logistics growth.
- TSO sees rail unloading capacity along the U.S. west coast for North Dakota crude oil growing to nearly 1M bbl/day through 2015; TSO's $100M rail-to-barge project in Washington is the largest of the offloading projects announced so far.
- Imperial Capital raises its TSO price target TSO to $63 from $57, and Howard Weil lifts its target to $66 from $62.
- Other refiners are lower too: VLO -1.3%, PSX -0.7%, MPC -1.8%, WNR -2.6%, HFC -1.6%, ALJ -1%, NTI -0.2%, DK -1.9%, CLMT -2.7%.
Northern Tier Energy LP engages in refining, retail, and logistics operations. It operates through the Refining Business and Retail Business segments. The Refining Business segment produces gasoline, diesel, jet fuel, and asphalt. The Retails Business segment operated convenience stores under... More
Sector: Basic Materials
Industry: Oil & Gas Drilling & Exploration
Country: United States
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