Matt Amil

Matt Amil inquired about PBF Energy's optimal balance sheet structure, specifically the right level of net debt as a percentage of capital structure or on an absolute basis, and the company's strategy to achieve this. He also asked for management's perspective on the product markets, noting strong distillate/heating oil curves versus relative weakness in gasoline, and whether gasoline is expected to catch up through the year, along with broader thoughts on underlying product fundamentals.

Answer

CEO Matt Lucey explained that the optimal net debt level is market-dependent, emphasizing the need to delever and potentially underlever during strong market cycles due to the business's cyclicality. He stated that the near-term focus for cash generation would be debt reduction, followed by returning cash to shareholders. EVP Tom O'Connor addressed product markets, noting seasonal gasoline stock rises and subsequent draws during maintenance periods. He highlighted the changing dynamics in the Atlantic Basin due to California's import needs (250,000 bpd gasoline), which will tighten that market. Mr. O'Connor also mentioned persistent improvements in the light crude barrel and strong Dated Brent prices, contributing to a constructive outlook for products despite tight refining balances.

Matt Amil asked about PBF Energy's optimal net debt level, either as a percentage of capital structure or on an absolute basis, and the company's path to achieve it. He also inquired about the outlook for product markets, specifically the spread between distillate/heating oil and gasoline, and whether gasoline is expected to catch up through the year, along with thoughts on underlying product fundamentals.

Answer

CEO Matt Lucey explained that the optimal net debt level depends on market conditions, emphasizing the need to delever in strong markets and blend debt repayment with returning cash to shareholders. He stated the near-term focus is debt reduction. EVP Tom O'Connor discussed the seasonal gasoline swoon, noting PADD 3 stock draws and the impact of West Coast dynamics (250,000 bpd gasoline imports) on Atlantic Basin flows. For diesel, he mentioned Q4 inventory rises but PADD 1 now at or below the five-year average, concluding that refining balances remain tight and the product outlook is constructive.