Western Refining: Likely To Buy Northern Tier's High Quality Assets On The Cheap
Michael Fitzsimmons • 38 Comments
Michael Fitzsimmons • 38 Comments
Western Refining's Diversified Operations Drive Strong Q2 Earnings
Tristan R. Brown
Tristan R. Brown
Western Refining: Crude Price Volatility Doesn't Slow It Down In Q1
Tristan R. Brown
Tristan R. Brown
Nov. 30, 2015, 3:28 PM
- Biofuel names react favorably and refiners negatively to just-released EPA biofuel targets that come in above those proposed by the agency in May.
- Fuel suppliers will be required to mix 16.93B gallons of corn-based ethanol and other renewable fuels into gasoline this year and 18.11B gallons next year, according to the newest EPA targets.
- The final 2016 standard for advanced biofuel is nearly 1B gallons, or 35% higher than actual 2014 volumes.
- Biofuel names include: PEIX +17.7%, REGI +8.1%, AMRS +7%, GEVO +4.9%, SZYM +2.5%, GPRE +6.2%, REX +3.2%, ADM flat.
- Refiners are pulling back: VLO -0.9%, TSO -1.5%, HFC -2.6%, MPC -0.3%, PSX -0.9%, WNR -0.7%, CLMT -2.6%.
Nov. 3, 2015, 5:49 AM
- Western Refining (NYSE:WNR): Q3 EPS of $1.69 beats by $0.09.
- Revenue of $2.57B (-36.5% Y/Y) beats by $190M.
Nov. 2, 2015, 5:30 PM
- ADM, AFSI, ALE, AMAG, AMSC, ANAC, ANIP, ARIA, AUDC, AXLL, AYR, BLMN, CBM, CDK, CEQP, CIE, CIT, DISCA, DNOW, EMR, EXPD, FI, FIS, FLWS, FSS, FTR, GCAP, GEL, GLDD, GLT, GTN, H, HCP, HRS, HTH, HW, HYH, IART, INCY, K, KMT, LPX, MBLY, MDCO, MHFI, MLM, MMP, MOS, NCLH, NGLS, NI, NMM, NNN, NRZ, NS, [[NTi]], NWN, NXST, NXTM, ODP, OZM, PERI, RDC, RHP, RRGB, SALE, SGNT, SMG, SRE, SSH, SUP, TASR, TGH, TRP, TWI, TZOO, UAM, UNT, VMC, VSH, WLK, WNR, WPC, WPG, ZTS
Nov. 2, 2015, 8:58 AM
- Western Refining Logistics (NYSE:WNRL) agrees to acquire Western Refining's (NYSE:WNR) 375-mile segment of the TexNew Mex pipeline and an 80K barrel crude oil storage tank located at its crude oil pumping station in Star Lake, N.M., for $180M in cash and units.
- WNR also will provide minimum volume commitments for 10 years of 13K bbl/day on the pipeline and ~80K barrels of crude oil storage.
- WNRL expects the pipeline and crude oil storage tank to generate 2016 EBITDA of $18.5M-$19M.
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.
Oct. 21, 2015, 2:56 PM
- Citi analyst Faisel Khan downgrades some U.S. refiner stocks, believing that narrowing differentials resulting from recent pipeline expansions and production slowdowns in the U.S. will continue to weigh on refiner margins in the near future.
- The firm’s latest forecast calls for a Brent-WTI differential of only $4.50/bbl, much lower than the previous forecast of $8/bbl.
- Khan cuts ratings for HollyFrontier (HFC -0.4%), Western Refining (WNR -1.6%), CVR Refining (CVRR +0.3%), Alon USA Partners (ALDW +2.4%) and Northern Tier Energy (NTI -2.2%) to Neutral from Buy.
- But the firm maintains its Buy rating on Phillips 66 (PSX -0.5%), Marathon Petroleum (MPC -0.8%) and Valero Energy (VLO -0.6%), which Khan says have diversified their revenue streams into pipelines, gas processing or chemicals.
Oct. 16, 2015, 4:31 PM
- Western Refining (NYSE:WNR) declares $0.38/share quarterly dividend, 11.8% increase from prior dividend of $0.34.
- Forward yield 3.32%
- Payable Nov. 12; for shareholders of record Oct. 27; ex-div Oct. 23.
Sep. 28, 2015, 7:02 PM
- Wolfe Research's Paul Sankey says he is bracing for some ugly Q3 earnings reports among oil and gas producers and a soft environment well into 2016, arguing that with oil prices stuck ~$45/bbl for West Texas crude, "there is real bankruptcy risk for probably one-quarter of the U.S. oil industry.”
- The analyst advises clients to stick with quality companies that can weather a prolonged stretch of soft prices, which means larger independent producers such as EOG Resources (NYSE:EOG), Anadarko Petroleum (NYSE:APC) and Chevron (NYSE:CVX) among the majors.
- Sankey says “all will be fine in due course,” although the next 6-12 months could be “tough sledding” for their businesses.
- Sankey likes a number of refiners, who will benefit from cheap crude oil, including Valero Energy (NYSE:VLO), Marathon Oil (NYSE:MRO), Western Refining (NYSE:WNR) and HollyFrontier (NYSE:HFC).
Aug. 14, 2015, 12:47 PM
- The Obama administration will allow limited sales of crude oil to Mexico for the first time, Reuters reports, citing a senior administration official who says the U.S. Commerce Department is "acting favorably on a number of applications" to export U.S. crude in exchange for imported Mexican oil.
- The shipments, likely to be lighter, high-quality shale oil, would help Mexico's aging refineries produce more premium fuels, while U.S. refiners would continue to get Mexican heavy oil, a better match for them than the light oil coming from Texas and North Dakota.
- Although limited in scope, the move toward freeing up trade will please U.S. oil producers such as Pioneer Natural Resources (NYSE:PXD) and ConocoPhillips (NYSE:COP), which say the restrictions force them to sell oil at below global market rates, and may add momentum to efforts mostly to repeal what advocates see as a relic of the 1970s.
- Among relevant oil stocks: XOM, CVX, BP, RDS.A, RDS.B, OAS, NOG, CLR, WLL, EOX, SM, SFY, PVA, GST, SN, CRK, BBG, CWEI
- Relevant refining stocks: VLO, HFC, MPC, TSO, WNR, ALJ, PSX, PBF, DK, NTI, ALDW
- ETFs: XLE, XOP, XES, IEO, IEZ, PXE, NDP
Aug. 4, 2015, 6:07 AM
- Western Refining (NYSE:WNR): Q2 EPS of $1.44 beats by $0.10.
- Revenue of $2.83B (-34.9% Y/Y) misses by $460M.
Jul. 23, 2015, 6:44 PM
- Even as the E&P and oilfield services sectors have slumped again, stocks of refiners such as Valero Energy (NYSE:VLO), Tesoro (NYSE:TSO), Marathon Petroleum (NYSE:MPC) and Western Refining (NYSE:WNR) have jumped 25% or more YTD.
- West coast refiners are big winners right now: Earlier this month, according to Credit Suisse, regional refining margins hit almost $60/bbl, - higher than the oil price itself.
- But Heard On The Street's Liam Denning suspects a top is near, with valuation a factor; VLO, for example, now trades at ~9.6x earnings, above its 15-year average of ~8.5x, which would be closer to just 8x without the wild swings in 2009-10 in the aftermath of the financial crisis.
- The other worry is that the glut of crude oil is morphing into a glut of refined products, such as diesel; U.S. commercial inventories of crude peaked in April and have since dropped by 29.5M barrels, but stocks of refined products have increased by 57M barrels to hit their highest level on record.
- Denning thinks refining stocks should remain the energy sector's best performers through the summer driving season and amid cheap oil, but by the time 2016 comes around, the growing glut in refined products may be too large for even the most optimistic investor to ignore.
Jul. 17, 2015, 5:52 AM
- Western Refining (NYSE:WNR) declares $0.34/share quarterly dividend, in line with previous.
- Forward yield 2.82%
- Payable Aug. 12; for shareholders of record July 27; ex-div July 23.
Jul. 14, 2015, 3:57 PM
- Although upside among oil refiner stocks seems limited now, Goldman Sachs thinks H2 will be characterized by “dispersion, where company-specific, idiosyncratic leaders” such as Valero (VLO -0.8%), Marathon Petroleum (MPC +0.1%) and Delek US (DK +4.2%) will substantially outperform peers.
- Goldman continues to include VLO in its Americas Conviction List, maintaining a Buy rating and $79 price target. and likes MPC, with a Buy rating and $68 target, expecting Gulf coast refiners to benefit from sturdy gasoline margins, capital allocation, wider spreads and appealing valuations going forward.
- The firm upgrades DK to Buy from Neutral, believing it is well positioned to deliver premium free cash flow on the back of capex declines, while downgrading Phillips 66 (PSX +0.1%) to Neutral from Buy to reflect recent appreciation and expected margin pressure, and raising Western Refining (WNR +1.2%) to Neutral from Sell to reflect midstream value, M&A potential and strong Phoenix margins.
Jul. 9, 2015, 10:47 AM
- Northern Tier Energy (NTI +0.4%) is initiated with an Outperform rating and $30 price target at RBC, which cites NTI's sole refinery - St. Paul Park - as "one of the most advantaged crude slates in the U.S.," mainly on account of its pipeline access to local Bakken and Canadian crudes.
- The firm considers NTI as undervalued because of a general lack of investor interest in the variable-rate MLP refiner structure, as well as the company's dependence on only one refinery.
- At the same time, RBC starts Western Refining (WNR +0.4%) at Sector Perform with a $48 target, saying WNR is caught between two opposing strategic directions - to purchase the remaining 62% of NTI or to sell its refineries to NTI; the uncertainty could be an overhang in the medium term.
- The firm praises WNR's impressive asset portfolio, which it says includes two of the most advantaged refineries in the U.S. and access to local growing crude supplies in the Permian and Four Corners Basins.
Jun. 18, 2015, 7:17 PM
- U.S. oil refiners will maintain positive free cash flows until the seasonally stronger Q4 revives earnings, as they can beat a short-term supply crunch by boosting the use of OPEC oil and diverting exports headed for Canada, Cowen analyst Sam Margolin writes.
- Refiners are getting squeezed by a drop-off in domestic supplies as drillers pull back, but Margolis sees the crunch as temporary and expects supplies of West Texas crude to rebound in response to demand during H2.
- The analyst maintains an Outperform rating on Valero (NYSE:VLO), Tesoro (NYSE:TSO), Marathon Petroleum (NYSE:MPC), Western Refining (NYSE:WNR) and PBF Energy (NYSE:PBF) he predicts Q2 earnings will come in above consensus for VLO, TSO and WNR.
- Margolin rates HollyFrontier (NYSE:HFC), Alon USA Energy (NYSE:ALJ), Calumet Specialty Products (NASDAQ:CLMT) and Northern Tier Energy (NYSE:NTI) at Market Perform.
May 29, 2015, 11:15 AM
- Ethanol companies rise while refiners are off session highs after the EPA announces its renewables fuels mandate.
- The EPA proposes requiring 15.93B gallons of total renewable fuel in 2014, 16.3B gallons in 2015, and 17.4B gallons in 2016, but the proposal for the total renewable fuel requirement falls short of levels Congress mandated, which were 20.5B gallons in 2015 and 22.5B gallons in 2016.
- Also, the EPA cuts 2016 corn-ethanol quota to 14B gallons; U.S. law required 15B gallons of ethanol for 2016.
- Ethanol exposed companies are mostly higher: ADM +0.7%, GPRE +4.2%, PEIX +4.1%, REX +1%, DAR +2%, CZZ -2.2%.
- Among refiners: HFC +0.3%, TSO +1.3%, VLO +0.8%, WNR +1.9%, PBF -1%.
- Biofuel related stocks: GEVO -8.3%, SZYM -2.7%, CDTI -1%, REGI -0.7%.
Western Refining, Inc. engages in the business of refining and marketing crude oil and refined products. The company operates through four segments: Refining Group, Retail Group, WNRL and NTI. The Refining Group segment operates two refineries owned by Western that process crude oil and other... More
Sector: Basic Materials
Industry: Oil & Gas Refining & Marketing
Country: United States
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