Ryan Todd

Ryan Todd inquired about the refining segment's gross margin contributions, excluding the SRE tailwind, asking about headwinds that led to lower capture across regions and if a regional breakdown of gross margins without SREs could be disclosed. He also asked for tangible benefits of the Green Trail Fuels marketing joint venture and its potential for driving additional growth.

Answer

Steve Ledbetter, EVP of Commercial, explained that strong crack environments in the first half of the quarter were followed by a significant fall in November and December. Planned and unplanned maintenance occurred during stronger margins, leading to inventory liquidation in a lower market. He expressed bullishness on refining outcomes and highlighted capture improvement and reliability trends. Regarding the Green Trail Fuels JV, Mr. Ledbetter expressed excitement, noting it accelerates Sinclair brand growth, provides exposure to attractive rack-to-retail margins, and captures synergies with integrated refining and midstream assets, serving as a template for future growth.

Ryan Todd sought clarification on the $115 million and $56 million benefits related to small refinery exemptions (SREs) and HF Sinclair's confidence in capturing future exemptions. He also asked about market trends potentially driving refining margin capture in Q4.

Answer

Tim Go, CEO, clarified the $115 million as a direct SRE benefit impacting cost of sales and the $56 million as an additive RINs trading benefit impacting revenue. He expressed appreciation for EPA actions, noted resubmitted applications for five refineries, and anticipated considerable upside for future SREs. Atanas Atanasov, CFO, confirmed the $115 million was a cumulative impact. Steve Ledbetter, EVP of Commercial, and Tim Go discussed limited help from heavy crude differential widening but noted flattening backwardation, strong jet/diesel cracks, and butane blending, expressing a bullish outlook for Q4 and potential upside from widening crude differentials in 2026.

Ryan Todd from Piper Sandler Companies asked about the extent to which 45Z tax credits were recognized in the quarter for the renewable diesel segment and what is needed for a more constructive macro backdrop. He also inquired about the progress on operational improvements, particularly regarding turnaround performance and refinery reliability.

Answer

Steven Ledbetter, EVP of Commercial, confirmed partial recognition of the Producer's Tax Credit (PTC) in Q2, with expectations for more in Q3, and noted that while the market structure needs higher RIN/LCFS values, HF Sinclair is well-positioned with its domestic feedstock. Valerie Pompa, EVP of Operations, stated that the company has completed a full five-year turnaround cycle, improving execution and positioning them well for the future. CEO Timothy Go added that the company is in the 'fifth inning' of its operational excellence journey, with results showing in throughput, capture, and OpEx.

Ryan Todd asked about refining demand trends, the cause for lower year-over-year product sales, and the operational impacts of Q1 regulatory shifts on the renewable diesel business, including tax credit recognition.

Answer

Executive Steven Ledbetter explained that underlying demand was relatively flat and that lower sales volumes were primarily driven by planned turnaround activity. On the Renewables segment, he stated that no Producer's Tax Credit (PTC) was recognized in Q1 due to regulatory uncertainty, but the business would have been near breakeven EBITDA if it had been booked. CEO Timothy Go reiterated the strategic goal for the renewables business is to be breakeven to slightly positive during bottom-of-cycle market conditions.

Ryan Todd asked about the macro environment for the lubricants business and its potential to return to a $350 million run-rate, and also questioned how management balances creating value through organic growth versus potential external monetization of its diversified assets like lubricants.

Answer

EVP, Lubricants & Specialties Matt Joyce acknowledged recent base oil market compression but noted encouraging signs of a recovery. CEO Timothy Go added that excluding a $45 million FIFO impact, the business would have achieved a record $375 million in underlying EBITDA for 2024. Go clarified that the ultimate goal is to maximize shareholder value for the lubes business, whether it remains in their portfolio or not, with a near-term focus on organic growth while continuously evaluating all strategic options.

Ryan Todd inquired about HF Sinclair's capital allocation strategy, specifically the balance between shareholder returns and managing debt if refining margins remain weak. He also asked about the progress and key drivers behind the company's improved operational reliability in its refining segment.

Answer

CFO Atanas Atanasov and CEO Timothy Go affirmed their commitment to shareholder returns, including dividends and buybacks, while maintaining a strong balance sheet and investment-grade rating. They noted that the integration of HEP provides crucial free cash flow during weaker cycles. Regarding operations, President of Refining Valerie Pompa explained that a disciplined turnaround strategy, capital improvements, and technology-driven efficiencies are yielding higher reliability, increased throughput, and lower operating expenses.

Ryan Todd asked about the drivers behind the significant improvement in PBF Energy's refining margin capture in the fourth quarter and how crude differential trends might continue to be a tailwind into Q1 2026 and beyond. He also requested more granularity on the $230 million in run-rate savings from the Refinery Business Improvement (RBI) initiative, specifically the breakdown between OpEx and capital, the biggest drivers, and where the additional $120 million in future improvements are expected to materialize.

Answer

CEO Matt Lucey attributed improved margin capture primarily to widening crude differentials and reliable operations, noting that PBF's complexity allows it to capture 100% of crude differential improvements. SVP and Head of Refining Mike Bukowski detailed that the $230 million in RBI savings included $160 million in OpEx, largely from third-party spend (procurement practices, vendor interaction) and energy consumption efficiency. Capital savings were driven by turnaround performance and sustaining capital efficiency. Mr. Bukowski expects the future $120 million in savings to come mainly from continued energy and third-party spend improvements, with less emphasis on capital as turnaround performance is already nearing top quartile.

Ryan Todd asked about the drivers behind the significant improvement in PBF Energy's refining margin capture in Q4 2025 and how crude differential trends might continue as a tailwind. He also requested more granularity on the $230 million in achieved RBI savings, including the breakdown between OpEx and capital, and where the additional $120 million in future savings are expected to come from.

Answer

CEO Matt Lucey attributed the margin capture improvement to reliable operations and widening crude differentials, emphasizing that PBF Energy's complexity allows it to capture 100% of crude differential improvements. SVP and Head of Refining Mike Bukowski detailed the $230 million RBI savings: $160 million in OpEx (driven by third-party spend and energy consumption) and $70 million in capital (primarily from turnaround performance and sustaining capital efficiency). He expects the future $120 million in savings to come mostly from energy and continued third-party spend improvements.

Ryan Todd asked about current market dynamics on the U.S. West Coast and inquired about the monetization of renewable diesel tax credits during the second quarter.

Answer

President & CEO Matthew Lucey and SVP Paul Davis described the West Coast market as structurally short of products, leading to import reliance and price volatility. CFO Karen Davis explained that while PBF does not detail specific credits, rising RINs prices in Q2 nearly offset the revenue decline from the switch from the BTC to the PTC for its renewable diesel sales.

Ryan Todd of Piper Sandler requested details on the $250 million insurance payment for Martinez, including its allocation and the expected cadence of future proceeds. He also asked about the outlook for West Coast product balances and margins.

Answer

CFO Karen Davis clarified the $250 million is an unallocated advance payment against the total claim and that the company will seek quarterly payments going forward. Executive Adam Smith described the West Coast product market as significantly short, projecting a need to attract over 250,000 bpd of gasoline, which will likely lead to market volatility and position PBF's refineries as crucial low-cost suppliers.

Ryan Todd of Piper Sandler followed up on the Martinez incident, asking how the insurance coverage works, and separately requested an update on the renewable diesel market, including PBF's approach to booking 45Z tax credits.

Answer

President and CEO Matthew Lucey stated that PBF is properly insured with strong providers but declined to give specifics. On renewable diesel, he noted the market is evolving but PBF is well-positioned. CFO Karen Davis confirmed PBF expects to accrue the 45Z credit based on currently available guidelines.

Ryan Todd asked for a breakdown of the primary buckets driving the targeted $200 million in cost savings by year-end 2025 and inquired about potential improvements in margin capture rates heading into Q4 and early 2025.

Answer

Executive Michael A. Bukowski detailed the cost savings plan, stating that 30-40% will come from energy reduction, with the remainder distributed across maintenance, third-party spend (catalysts, chemicals), turnarounds, and capital projects. President and CEO Matthew Lucey addressed capture rates, noting the biggest driver is crude feedstock discounts. He expressed optimism that the worst of the tight crude market is over, with turnaround season and eventual OPEC+ easing expected to loosen supply and benefit capture.

Ryan Todd inquired about ConocoPhillips' Lower 48 activity levels in relation to commodity prices, the conditions required for faster growth, and the company's medium-to-longer-term crude oil outlook.

Answer

Ryan Lance, Chairman and CEO, explained that 2026 plans were set based on an anticipated softer commodity price environment, with Nick Olds' team focusing on efficiency gains to grow the Lower 48 business without additional capital. ConocoPhillips maintains a constructive long-term view, expecting LNG and Willow to come online when global oil demand requires it, balancing shareholder returns with organic investments.

Ryan Todd of Piper Sandler Companies asked about the increased resource estimate from the Marathon transaction, specifically seeking the drivers behind the doubling of the estimated resource in the Permian Basin.

Answer

EVP Nick Olds explained that while the Eagle Ford and Bakken assets performed as well as or better than expected, the primary upside came from the Delaware Basin. He attributed the doubling of the Permian resource estimate to applying ConocoPhillips' development strategy, which identified greater contributions from primary and secondary intervals like the Wolfcamp A and C, Bone Springs, and Woodford formations. He also noted opportunities for longer laterals through acreage trades.

Ryan Todd requested an update on the integration of Marathon Oil, focusing on operational performance and the progress of synergy capture.

Answer

SVP Andy O'Brien reported that the integration is tracking ahead of schedule, with excellent progress toward the $1 billion synergy target. He noted that over $500 million in capital synergies are already being delivered and new opportunities are being found, particularly on the commercial side. As an example of operational success, he cited record drilling performance in the Eagle Ford achieved by leveraging best practices from both legacy companies.

Ryan Todd of Piper Sandler inquired about the status of the company's divestiture program, the market appetite for assets, and specifically the ongoing discussions around selling down its equity in Port Arthur LNG.

Answer

Andy O'Brien, SVP of Strategy, confirmed progress on the $2 billion asset sale target, with $600 million in agreements signed for non-core Permian assets expected to close in H1 2025. He expects the majority of the $2 billion target to be achieved in 2025. Regarding Port Arthur Phase 1, O'Brien reiterated that while they don't need to be a permanent equity owner and have received inbounds, they can be patient. The project is de-risking daily via project financing without additional capital from ConocoPhillips.

Ryan Todd asked for ConocoPhillips's view on the crude oil supply-demand balance for the next few years and how this outlook influences its activity levels and production growth strategy.

Answer

Chairman and CEO Ryan Lance noted that 2024 demand growth appears softer than initially expected, around 1 million barrels per day, but the company remains constructive on the market going forward. He stressed that the company's plans are driven by maximizing long-term returns and maintaining flexibility, not by short-term price signals, and that they are built to handle market volatility while delivering competitive shareholder returns.

Ryan Todd asked about the hurdles Shell needs to clear for a targeted 2027 Final Investment Decision (FID) for Bonga South West in Nigeria. He also inquired about the broader resource opportunity in Nigeria and other existing basins, and what factors have made these areas more attractive.

Answer

CEO Wael Sawan stated that a key hurdle for Bonga South West was securing fiscal supports from the Nigerian president, which he was committed to providing. This commitment has allowed Shell to kick off FEED, aiming for an investable project. Sawan highlighted significant deepwater opportunities in Nigeria (Bosi, Nwa-Doro) and continued momentum in Brazil, the Gulf of Mexico, Oman, and Malaysia, driven by an improving investment climate and Shell's focus on maximizing value from existing resources while pursuing exploration and M&A.

Ryan Todd asked about the hurdles Shell needs to clear to reach a targeted 2027 Final Investment Decision (FID) for the Bonga South West project in Nigeria. He also requested a broader discussion on resource opportunities in Nigeria and other existing basins, and what factors have made these areas more attractive.

Answer

CEO Wael Sawan reported encouraging progress in Nigeria, with the president committed to providing fiscal supports for Bonga South West, a material deepwater resource. This commitment has allowed Shell to kick off a FEED (Front-End Engineering Design) study, aiming for an investable project. He noted significant potential in deepwater Nigeria with projects like Bosi and Nwa-Doro now progressing due to an improved investment climate. Sawan also highlighted continued momentum in Brazil, the Gulf of Mexico (with discoveries tying back to existing assets), Oman (gas resources), and Malaysia, emphasizing maximizing value from existing reach while pursuing exploration and M&A.

Ryan Todd asked how Shell's impressive operational execution in upstream and integrated gas informs its confidence in meeting or exceeding its 2030 volume plan, and about its view on global gas and LNG demand, particularly in Asian markets.

Answer

Shell CEO Wael Sawan stated that Shell is well-positioned to navigate LNG market cycles due to its broad portfolio and customer touchpoints, noting positive long-term signals from transportation and trucking. He expressed pride in the upstream team's progress but acknowledged Shell is not yet at full potential, with more to do in turnarounds, reliability, and water injection, which could de-risk the 2030 ambition without needing as many new molecules.

Ryan Todd asked about Shell's confidence in meeting or exceeding its 2030 volume plan, given impressive operational execution in upstream and integrated gas. He also inquired about Shell's outlook for global gas and LNG demand, particularly in Asian markets, and key moving pieces being watched.

Answer

Shell CEO Wael Sawan expressed satisfaction with operational progress but stated the company is not yet at full potential, with ongoing efforts to improve turnarounds, reliability, and water injection to de-risk the 2030 ambition. For LNG, Sawan acknowledged cyclical demand (Europe strength, Asia weakness) but maintained a positive long-term outlook, citing growth in marine transportation and trucking, and Shell's strong portfolio breadth to navigate market dynamics.

Ryan Todd asked about the successful ramp-up of the Whale project in the Gulf of Mexico and how operational improvements and the current administration's lease sale schedule might affect future growth. He also inquired about the outlook for refining market dynamics into 2026.

Answer

CEO Wael Sawan praised the Whale project for achieving nameplate capacity within five months, calling it symptomatic of broader operational improvements in the Gulf of Mexico. He added that a steady lease sale schedule provides comfort for future tie-back opportunities. On refining, he noted the current market is strong, particularly for diesel, and that Shell's portfolio of key hubs is well-positioned to create value through its integrated system.

Ryan Todd asked how the successful ramp-up of the Whale project reflects broader operational improvements in the Gulf of Mexico and inquired about the refining market outlook into 2026.

Answer

CEO Wael Sawan stated the rapid Whale ramp-up is "symptomatic" of structural improvements across the Gulf of Mexico in reliability, cost, and well management. Regarding refining, he noted current market strength driven by diesel but highlighted future uncertainty from geopolitics. He confirmed Shell is satisfied with its current portfolio of core refining hubs.

Ryan Todd of Piper Sandler & Co. inquired about Shell's appetite for inorganic growth, given recent low spending, and asked whether future CapEx reductions would be driven more by project cancellations or by ongoing efficiency gains.

Answer

Executive Sinead Gorman explained that while Shell is open to value-accretive acquisitions, the bar for deals is very high, especially when compared to share buybacks. She stated that future CapEx discipline will be driven by a combination of both capital avoidance on lower-return projects and continued operational efficiency improvements.

Ryan Todd inquired about the drivers of progress in the Eastern Mediterranean, key factors for the Aphrodite development reaching Final Investment Decision (FID), and additional opportunities in the region, including Egypt.

Answer

Chairman and CEO Mike Wirth expressed excitement for the Eastern Mediterranean's resource potential, highlighting over 40 TCF of gross resource across core assets. He mentioned near-term project startups at Tamar and Leviathan, with the Leviathan expansion (FID taken) aiming for 2.1 BCF by end of decade. Aphrodite has entered FEED, and exploration efforts, including at least one well offshore Egypt, are underway to test underexplored areas.

Ryan Todd questioned the drivers of Chevron's recent progress in the Eastern Mediterranean, the key factors for developing Aphrodite to Final Investment Decision (FID), and additional regional opportunities, including Egypt.

Answer

Chairman and CEO Mike Wirth expressed excitement for the Eastern Mediterranean's resource potential, citing over 40 TCF of gross resource across core assets. He highlighted near-term projects at Tamar and Leviathan, with Leviathan's expansion targeting 2.1 BCF by decade-end. Aphrodite has entered FEED, and Chevron plans exploration wells offshore Egypt, indicating continued long-term growth in the region.

Ryan Todd followed up on the Hess acquisition, asking about the drivers behind the strong performance and contribution, which came in at the high end of expectations, and any other key takeaways from the initial period of ownership.

Answer

Vice President and CFO Eimear Bonner stated that strong production growth and the delivery of expected synergies were the main drivers. She confirmed the $1 billion synergy target is on track for run-rate savings this year, stemming from NOLs, canceled put options, and operating efficiencies. Chairman and CEO Mike Wirth added that the Yellowtail startup and Hammerhead FID were positive, and he was particularly impressed with the quality of the legacy Hess team and their potential contributions to Chevron.

Ryan Todd requested a follow-up on the Hess contribution, asking about the drivers of its strong performance and any key takeaways from the initial period of ownership.

Answer

Vice President and CFO Eimear Bonner attributed the strong performance to robust production growth and the successful delivery of expected synergies. She confirmed that the $1 billion synergy target will be achieved this year through NOLs, canceled put options, and operating efficiencies, with further benefits anticipated in Q4. Chairman and CEO Mike Wirth added that the Yellowtail startup and Hammerhead FID occurred in the quarter, and he was particularly impressed by the quality of the legacy Hess team and their potential for innovation within Chevron.

Ryan Todd of Piper Sandler Companies highlighted strong operational performance across the portfolio—including GOM, Permian, TCO, and Australian LNG—and asked what has been working well and how Chevron plans to sustain this momentum.

Answer

Vice Chairman Mark Nelson attributed the success to improved operational efficiency in production and turnaround management. He cited record refinery throughput, top-quartile turnaround performance (14 of last 16), and efficiency gains in base assets, leading to a 1-2% increase in portfolio-wide production efficiency year-to-date.

Ryan Todd asked about the specific drivers behind the improved performance in the Permian's Delaware Basin and the potential implications for the 2025 development program.

Answer

CEO Mike Wirth attributed the strong performance to outperformance in the Bone Spring and Wolfcamp formations. He expects 2025 type curves to be similar, with an increased focus on the Delaware Basin (85% of the program). He also noted a stable oil cut of 43-45% is expected to continue through the end of the decade.

Ryan Todd asked about key learnings from recent project start-ups in the Gulf of Mexico, specifically regarding reservoir performance and facility execution, and how these inform future potential in the basin.

Answer

CEO Mike Wirth reported that wells at the Anchor project are performing at or above expectations, successfully proving operations in a new high-pressure, high-temperature regime. He expressed strong encouragement for the basin's future, citing Chevron's large leasehold position and opportunities for both tiebacks and new developments.

Ryan Todd from Piper Sandler requested a status update on operations in the Eastern Mediterranean, including the Tamar and Leviathan expansion projects, given the current regional uncertainties.

Answer

CEO Mike Wirth prioritized employee safety and asset integrity. He confirmed that while a key vessel for expansion projects has been demobilized due to risk, both projects are still expected to be completed late next year. He noted that despite some temporary production curtailments, all supply commitments are being met. A larger expansion is in the FEED stage.

Ryan Todd asked about the West Coast refining segment's profitability, the drivers for its weaker performance in Q4 2025, the timeline for the Benicia refinery shutdown, and the outlook for West Coast dynamics in 2026. He also inquired about the RVO, its timing, and the direction of debated items like SREs and penalties for foreign feeds/products.

Answer

Gary Simmons (EVP and COO, Valero Energy Corporation) attributed weaker West Coast capture rates to weak gasoline relative to diesel and a retroactive tariff adjustment. Richard Walsh (EVP and General Counsel, Valero Energy Corporation) detailed the phased idling of Benicia's process units in February, continued fuel production from inventory, and commitments to supply the Bay Area, with Wilmington continuing normal operations. Richard Walsh also discussed the challenge of SREs, noting the administration's recognition of their overissuance and a legislative proposal supported by API and ag interests to correct the flawed SRE basis.

Ryan Todd followed up on RVO (Renewable Volume Obligation) matters, asking about the timing and any insights on debated items such as SREs (Small Refinery Exemptions), reallocations, or penalties for foreign feeds/products.

Answer

Richard Walsh, EVP and General Counsel, explained that the national E15 waiver and SRE issue are intertwined, with the administration recognizing the SREs have gotten out of hand due to an outdated DOE process. He mentioned a legislative proposal supported by API, ag interests, and most refiners to correct the RFS (Renewable Fuel Standard) but noted a small number of conglomerate refiners are holding it up due to windfall SREs.

Ryan Todd asked about the drivers behind the strong U.S. refining utilization over the past six months, questioning if it's due to exiting a period of heavy maintenance or if this high utilization can be sustained. He also inquired about the impact of Q3 margin headwinds (narrow crude differentials, crude backgradation, West Coast jet fuel dynamics, secondary products) reversing or improving in Q4 on capture and profitability.

Answer

Lane Riggs, Chairman, CEO and President, attributed improved utilization to Valero's long-standing focus on reliability and the industry's general improvement in execution and predictive maintenance. Gary Simmons, Executive Vice President and COO, added that the absence of extreme weather in the summer also contributed to better operational tuning. Greg Bram, Vice President, noted that while some factors have turned favorable in October (e.g., butane blending for winter gasoline), secondary products like Naptha and Propylene remain weak.

Ryan Todd inquired about the direction of trends that might impact Valero's margin capture and profitability in Q4 2025, given that several modest headwinds from Q3 (narrow crude differentials, crude backgradation, West Coast jet fuel dynamics) appear to have reversed or improved.

Answer

Greg Bram, Vice President, Valero Energy Corporation, acknowledged that several factors have turned favorable in early Q4, such as butane blending into gasoline for winter specifications, which typically uplifts margin capture. However, he noted that some secondary products like naphtha and propylene remain weak, partially offsetting the positive trends.

Ryan Todd of Piper Sandler Companies asked about operational and market learnings from the new Sustainable Aviation Fuel (SAF) operations and inquired about the status of the planned closure of the Benicia refinery.

Answer

SVP Eric Fisher described the SAF start-up as a 'pleasant surprise' operationally, with strong performance and growing market interest, particularly from Europe. Regarding Benicia, EVP & General Counsel Rich Walsh stated that while discussions with California officials are ongoing, no viable solutions to prevent the closure have emerged, and the company's plans have not changed.

Ryan Todd of Piper Sandler Companies requested an update on the Sustainable Aviation Fuel (SAF) operations, including performance, demand mix, and market evolution since startup. He also asked for comments on reports that the California government might broker a sale of the Benicia refinery.

Answer

SVP Eric Fisher described SAF operations as a 'pleasant surprise,' with the unit performing well, but noted that airline demand is still developing. Regarding Benicia, EVP & General Counsel Rich Walsh stated that Valero's plans to cease refining operations have not changed, and while discussions with state officials are ongoing, no viable solutions to prevent the closure have emerged.

Ryan Todd of Piper Sandler questioned the rationale and timing for closing the Benicia refinery and asked about the normalization of the renewable diesel market under the new PTC regime.

Answer

Lane Riggs, Chairman, CEO and President, attributed the Benicia closure to California's stringent regulatory environment and higher maintenance costs compared to Wilmington. Eric Fisher, EVP of Commercial, added that while Q1 renewable diesel volumes were impacted by maintenance, Valero expects to capture 100% of eligible PTC credits going forward and sees potential market tailwinds later in the year.

Ryan Todd asked about the rationale and timing for closing the Benicia refinery, the future risk for the Wilmington refinery, and the path to normalization in the renewable diesel market under the new PTC regime.

Answer

Lane Riggs, Chairman, CEO and President, explained the Benicia closure was driven by California's difficult regulatory environment and the refinery's higher maintenance costs compared to Wilmington. Eric Fisher, an executive, detailed the renewable diesel market's transition, noting a pivot to capture PTC credits and the expectation for 100% capture on eligible volumes going forward. He added that market improvement is likely in the second half of the year, pending potential regulatory tailwinds from the EPA and California's LCFS program.

Ryan Todd asked about the risk to renewable diesel economics in Q1 as the market transitions from the Blender's Tax Credit (BTC) to the new 45V credit. He also requested an update on Sustainable Aviation Fuel (SAF) operations and its expected contribution.

Answer

Eric Fisher, an executive, explained that the new credit is less favorable for non-waste oils, creating a challenging margin environment, but noted Valero's waste-oil-based platform remains advantaged. He added that the new SAF unit started up successfully in Q4 and provides the flexibility to produce either SAF or renewable diesel for Europe, depending on which offers better economics.

Ryan Todd of Piper Sandler asked about the drivers behind the sector's declining margin capture rate and the outlook for the SAF market's supply balance and Valero's sales optionality.

Answer

Executive Greg Bram attributed weak margin capture to persistent crude backwardation, a heavy maintenance period for Valero, and soft secondary product values like propylene. He expects capture to improve as petchem markets recover. On SAF, executive Eric Fisher reiterated their view that the market is physically undersupplied and confirmed that Europe will be a primary, attractive market for their new production.

Ryan Todd inquired about Par Pacific's priorities for utilizing the significant cash influx expected from the Hawaii Renewables JV payment, RIN monetization, and organic free cash flow, especially considering the Q3 focus on balance sheet strengthening over share buybacks. He also asked about the drivers and sustainability of the strong Singapore margin environment and its outlook for the Hawaii refinery.

Answer

Will Monteleone, President and CEO, highlighted the strong balance sheet positioning the company for both growth (completing Hawaii Renewables, Montana business projects like logistics and market access) and opportunistic share repurchases, indicating the ability to pursue all avenues. He attributed the strong Singapore margins to tight OECD inventories, geopolitical disruptions impacting crude flows, and elevated demand for distillate, particularly benefiting Par Pacific's distillate-oriented refineries.

Ryan Todd of Piper Sandler Companies asked about the performance drivers in the Rockies, specifically the impact of excess inventory sales on strong results, and questioned the company's capital allocation strategy for the second half of the year given incoming JV proceeds and lower CapEx.

Answer

SVP & CFO Shawn Flores explained that while the market supported the base guidance, the capture rate was boosted to 110% in Montana by drawing down clean product inventories. President & CEO Will Monteleone commented on the tight PADD 4/5 distillate markets. On capital allocation, Monteleone reiterated the company's framework of opportunistically repurchasing shares below intrinsic value while weighing growth projects, emphasizing a nimble approach to adapt to market changes.

Ryan Todd of Piper Sandler Companies asked about performance in the Rockies, specifically the impact of inventory sales on strong results and the outlook for regional dynamics. He also questioned the capital allocation strategy for H2 2025, given incoming cash and reduced CapEx.

Answer

SVP & CFO Sean Flores explained that drawing down diesel and gasoline inventories boosted Montana's capture rate to 110%. President & CEO Will Monteleone cited tight PADD 4 and PADD 5 distillate markets as a key dynamic. On capital allocation, Monteleone reiterated the framework of opportunistically repurchasing shares while weighing growth and M&A, emphasizing the need for flexibility.

Ryan Todd of Piper Sandler inquired about the knock-on effects of West Coast market dynamics on Par Pacific's operations and sought details on the company's capital allocation strategy, particularly regarding its aggressive share repurchases.

Answer

President and CEO Will Monteleone explained that a tighter West Coast market benefits Par Pacific's Tacoma and Montana assets, as they are strategically positioned on the periphery of California. On capital allocation, Monteleone emphasized the company's strong balance sheet and improving outlook, which provide the flexibility to be opportunistic with share buybacks, adjusting activity based on share price and cash flow prospects.

Ryan Todd of Piper Sandler inquired about the key drivers behind the Hawaiian asset's continued outperformance despite weak Asian refining margins. He also asked for more detail on the operational changes that allowed the company to extend its turnaround schedule and the resulting impact on annual capital requirements.

Answer

President and CEO William Monteleone attributed Hawaii's success to long-term operational improvements, a favorable cost structure, and strong commercial agreements, which allow for profitability even in weaker markets. EVP of Refining and Logistics Richard Creamer added that enhanced mechanical integrity programs enabled the extension of turnaround cycles. CFO Shawn Flores confirmed that despite the schedule changes, the company's guidance for amortized annual turnaround expenditures remains around $40 million.

Ryan Todd asked about the potential impact of foreign feedstock treatment policies on Marathon Petroleum's access and approach to feedstock at its Martinez Renewable Diesel facility. He also inquired if the company is at a ratable run rate for monetizing or booking PTC credits. Additionally, he asked about the macro opportunity set driving increased midstream project spend and if this trend is expected to normalize in future years.

Answer

CEO Maryann Mannen stated that a potential 50% foreign feedstock limitation is still debated but would be less limiting for MPC due to their Neste partnership and access to local feedstocks. CFO John Quaid added that MPC's strong logistics allow them to pivot. John Quaid confirmed that 45Z PTC credits are largely reflected in current numbers, with some Q1 pieces still being pursued. Maryann Mannen detailed midstream growth in the Permian, focusing on nat gas and NGL value chains through acquisitions and new plants, with projected EBITDA growth into 2026 and beyond, supporting MPC's capital return.

Ryan Todd asked about the potential impact of foreign feedstock limitations on Marathon Petroleum's Renewable Diesel (RD) operations at Martinez and whether PTC credits are being monetized at a ratable run rate. He then inquired about the macro opportunity set driving increased project spend, particularly in midstream, and if this trend would normalize in future years.

Answer

CEO Maryann Mannen explained that a potential 50% limitation on foreign feedstock for RD is still debated but would have less impact on MPC due to its diverse feedstock access and partnership with Neste. CFO John Quaid added that MPC's strong logistics (water and rail) allow flexibility. John Quaid confirmed that a large chunk of PTC credits were secured in April, with some smaller pieces still being pursued, indicating that PTC is largely reflected in current numbers. Maryann Mannen detailed midstream growth opportunities in the Permian, focusing on nat gas and NGL value chains (sour gas treating, Banegas acquisition, Preakness II, Secretariat, fractionation, LPG export dock), which are expected to drive incremental EBITDA into 2026 and beyond, supporting MPLX distribution growth and MPC's capital return. She reiterated that 2026 capital is expected to be below 2025.

Ryan Todd asked about the renewable diesel market, noting that margins remain weak despite some positive regulatory developments, and what is needed for the market to improve.

Answer

CEO Maryann Mannen acknowledged the challenging economics and reiterated MPC's prudent, small-scale approach to renewable diesel. She stated that further regulatory changes and other market factors are necessary for margins to improve long-term, while emphasizing the competitiveness of MPC's existing assets.

Ryan Todd asked about other particularly exciting discoveries this year, specifically in Namibia, including what has been seen, how it compares to expectations, and the timeline for next steps.

Answer

Murray Auchincloss (CEO, BP) highlighted 12 out of 14 discoveries this year, attributing success to converging seismic technology and AI. He mentioned two good discoveries each in Trinidad and Egypt. In Namibia, through the Azule joint venture, there have been three discoveries, including Volenergy in Q3. He noted Capricornus has a 38m reservoir with high Darcy rock and good oil, while Volenergy (14km away) has 28m of rich gas condensate. BP is optimistic and awaits further appraisal and operator updates.

Ryan Todd asked about other significant exploration discoveries this year beyond Boomerangy, specifically inquiring about findings in Namibia, how they compare to expectations, and the timeline for next steps.

Answer

Murray Auchincloss (CEO, BP) celebrated 12 out of 14 discoveries this year, crediting seismic technology and AI. He highlighted two discoveries each in Trinidad and Egypt, and detailed three discoveries in Namibia via the Azul JV, including Volens in Q3, expressing optimism for further appraisal and development.

Ryan Todd of Piper Sandler Companies inquired about BP's approach to exploration following 10 recent discoveries and asked for an outlook on the refining environment for the rest of the year and into 2026.

Answer

CEO Murray Auchincloss described the refining market as relatively tight due to low product stocks and balanced capacity, a condition he expects to extend into 2026. EVP Gordon Birrell attributed exploration success to a data-led approach using advanced seismic imaging and a focus on quality over quantity, highlighting West Africa as a particularly exciting region.

Ryan Todd of Piper Sandler Companies inquired about the factors contributing to BP's recent exploration success, including 10 discoveries, and asked for an outlook on the refining environment and operational performance.

Answer

CEO Murray Auchincloss described the refining market as 'relatively tight' due to low product stocks and expects this condition to persist into 2026. EVP - Production & Operations Gordon Birrell attributed the record H1 refining availability to systematic vulnerability management and digitization. On exploration, Birrell credited data-led strategies, advanced seismic imaging, and a disciplined focus on quality opportunities.

Ryan Todd inquired about ExxonMobil's exploration activities, focusing on opportunities over the next 12-24 months and how the company's approach to exploration may have changed historically.

Answer

Darren Woods, Chairman and CEO, framed exploration as one of three key levers to address depletion and grow production, alongside maximizing existing fields and inorganic opportunities. He explained that ExxonMobil has narrowed its exploration focus to material, commercially attractive opportunities, leveraging improved seismic interpretation and technology. He emphasized that their competitive advantage comes from unique capabilities in cost-efficient and quick development, which resource owners value.

Ryan Todd asked about ExxonMobil's exploration strategy, noting increased activity in recent years. He inquired about opportunities on the horizon over the next 12-24 months and how the company's approach to exploration may have changed compared to the past.

Answer

Darren Woods, Chairman and Chief Executive Officer, placed exploration within the context of addressing depletion and growing production, alongside maximizing existing resources and inorganic opportunities. He emphasized narrowing exploration efforts to material, commercially attractive opportunities that compete in the portfolio, leveraging technology for seismic interpretation and unique capabilities.

Ryan Todd from Piper Sandler Companies asked about the resilience of the Chemical business earnings amid low margins, the contribution from the new China complex, and the outlook for the sector.

Answer

Chairman and CEO Darren Woods attributed the strong performance to a long-term strategy focused on advantaged projects, feed flexibility, high-value products, and significant structural cost reductions. He expects the challenging margin environment to persist but noted the business is built to be profitable at the bottom of the cycle. The China complex is still ramping up and is expected to reach its full potential contribution by early next year.

Ryan Todd of Piper Sandler & Co. asked about the key drivers behind the strong Q1 performance in the refining business (Energy Products) and the market outlook for the remainder of the year.

Answer

Chairman and CEO Darren Woods attributed the strong results to a multi-year strategy of improving the asset base, including high-grading the portfolio by selling non-core refineries and investing in high-value projects at strategic sites. He also credited a rigorous focus on operational excellence, which has increased reliability and lowered costs. While the market outlook is uncertain, he noted Q2 margins are currently stronger than Q1, but the company's success is built on operational execution, not forecasting.

Asked for an update on the carbon capture business, inquiring about the evolution of the commercial side, remaining challenges (including regulatory), and the expected earnings contribution from CCS over the next few years.

Answer

The executive noted a 'shakeout' in the CCS industry, which has clarified for customers which companies are capable of delivering. ExxonMobil is uniquely positioned with an end-to-end system and has a healthy pipeline of customer interest. Growth depends on securing long-term contracts. The CFO added that the entire low-carbon solutions business is expected to contribute $2 billion in earnings growth by 2030.

Ryan Todd requested an update on the commercial evolution of the carbon capture business, its remaining challenges, and its expected financial contribution over the next few years.

Answer

CEO Darren Woods noted a market 'shakeout' has clarified which companies can deliver CCS, positioning ExxonMobil uniquely with its end-to-end system and a healthy sales pipeline. Growth is dependent on securing long-term customer contracts. CFO Kathy Mikells reiterated the guidance for the entire Low Carbon Solutions business to achieve $2 billion in earnings growth by 2030.

Ryan Todd requested an update on the commercial side of the carbon capture business, including remaining challenges and its expected financial contribution over the next few years.

Answer

CEO Darren Woods noted a market 'shakeout' has clarified which companies can actually deliver CCS, positioning ExxonMobil favorably with its unique end-to-end system. He confirmed a healthy sales pipeline, with growth dependent on customer contracts. CFO Kathy Mikells added that the entire Low Carbon Solutions business is expected to contribute $2 billion in earnings growth by 2030.

Ryan Todd inquired about the headwinds impacting Phillips 66's refining market capture in Q3, how these might trend into Q4, and the company's progress towards its strategic goal of a 5% margin capture improvement, including future initiatives.

Answer

Refining executive Rich Harbison provided a regional breakdown: Atlantic Basin (97% capture) saw improved market CRECs offset by higher feedstock costs and lower product differentials; Gulf Coast (86% capture) faced lower octane and jet differentials; Central Corridor (101% capture) had lower product differentials offset by improved market CRECs. The West Coast (69% capture) was significantly impacted by the wind-down of the Los Angeles refinery. Marketing and Commercial executive Brian Mandell added that Q4 is seeing tailwinds with jet over diesel regrades and firmed octane spreads due to weakening naphtha to crude.

Ryan Todd inquired about the headwinds impacting refining margin capture in Q3, potential improvements into Q4, and the company's progress towards its strategic goal of a 5% margin capture improvement.

Answer

Richard Harbison, EVP of Refining, provided a regional breakdown of market capture and headwinds, highlighting strong utilization and clean product yields. Brian Mandell, EVP of Marketing and Commercial, noted that Q4 tailwinds include jet-over-diesel regrades and firming octane spreads due to weakening naphtha-to-crude.

Ryan Todd of Piper Sandler Companies asked about the drivers of the tight distillate market and the company's ability to increase yields. He also inquired about progress in enhancing the commercial side of the business.

Answer

EVP of Marketing & Commercial Brian Mandell explained that distillate margins are expected to remain strong through year-end due to low inventories and seasonal demand. On the commercial front, he highlighted significant progress through hiring, upgrading systems, and building a global origination group focused on driving more value through the integrated system and moving barrels to the highest netback markets.

Ryan Todd asked about the operational challenges in the renewable diesel business during Q1, specifically regarding feedstock optimization amid regulatory uncertainty, and how that might change in Q2.

Answer

Brian Mandell, EVP of Marketing and Commercial, acknowledged that the lack of clarity on the new Production Tax Credit (PTC) rules led to some 'suboptimized' feedstock decisions early in the year. He noted that significant policy uncertainty remains regarding the RVO, tax rules, and LCFS, with more clarity expected in the coming months. As the rules become clearer, the company will be better able to optimize plant operations and feedstock sourcing to improve margins.

Ryan Todd asked for the outlook on the Refining capture rate for the beginning of the year, considering any moving pieces. He also inquired about the progress made on the commercial side of the business as part of the broader business transformation process.

Answer

Rich Harbison (Refining) noted that Q1 turnarounds would impact the capture rate, but the benefit from seasonal butane blending would continue. Brian Mandell (Marketing and Commercial) commented on the commercial side, stating they are continuing to grow the organization, hire expertise, and look for margin and cost-cutting opportunities to grow returns.

Ryan Todd from Piper Sandler asked about the path to improving Refining profitability and the drivers for better renewable diesel performance in 2025.

Answer

Rich Harbison of Refining outlined a focus on earnings per barrel through high-return projects and commercial integration to drive future profitability. Brian Mandell of Marketing and Commercial expects renewable diesel margins to strengthen due to favorable feedstock prices, a tighter West Coast market, and stronger credit markets, noting the Rodeo facility is still in its startup phase.

Ryan Todd from Piper Sandler Companies requested a breakdown of the assumptions behind the updated 2025 EBITDA guidance, which implies significant second-half improvement, and asked about the key learnings from SAF operations to date.

Answer

CEO Randall Stuewe attributed the expected EBITDA improvement primarily to the core ingredients business, benefiting from higher fat prices. He noted the guidance's main uncertainty is the timing of a RIN market recovery, which could make the forecast conservative. On SAF, COO Matt Jansen reported that operations are performing well and meeting expectations, with solid demand and a good sales book, despite some market quietness due to regulatory noise.

Ryan Todd of Piper Sandler asked about the impact of the current tariff regime on the business and for more details on Sustainable Aviation Fuel (SAF) demand and the status of a potential second SAF project.

Answer

An executive stated that tariffs are a slight net positive for Darling, as they limit imported waste fats and support domestic prices, with a minor negative impact on protein sales to China. Regarding SAF, COO Matt Jansen described demand as a healthy mix from both mandated and voluntary markets, supported by a strong sales book. He added that a decision on a second SAF production line is on hold pending greater market clarity, and noted growing interest in the 'book and claim' process for Scope 3 credits.

Ryan Todd asked about the drivers needed for the base Feed business to return to a $1 billion annual EBITDA run rate and inquired about the role of the European market for SAF exports in 2025.

Answer

CEO Randall C. Stuewe attributed the expected improvement in the Feed business to strong volumes, operational gains, and improving fat prices, which are moving towards levels seen when palm oil is high. Regarding SAF, management noted that while global demand is increasing, the U.S. market looks particularly attractive for 2025, but DGD is positioned to sell to the highest-value market.

Ryan Todd of Piper Sandler asked for details on the drivers behind the improved margin capture at the El Dorado refinery and sought clarity on whether Q1 results reflect a normalized run rate for intercompany financial adjustments.

Answer

EVP of Operations Joseph Israel detailed the El Dorado improvements, which are on track for a $2/barrel run-rate gain, attributing them to specific EOP initiatives like increased jet fuel production and catalyst changes. Executive Mohit Bhardwaj clarified that while the latest intercompany transaction had a muted EBITDA impact, some of the previously announced $60 million EBITDA shift from DKL to DK is still expected to materialize throughout the year.