HF Sinclair - Earnings Call - Q1 2017
May 3, 2017
Transcript
Speaker 0
Welcome to HollyFrontier Corporation's First Quarter twenty seventeen Conference Call and Webcast. Hosting the call today from HollyFrontier is George Demeris, President and Chief Executive Officer. He is joined by Rich Folovak, Executive Vice President and Chief Financial Officer and Tom Curry, President, Refining and Marketing. At this time, all participants have been placed in a listen only mode and the floor will be opened for your questions following the presentation. Please note that this conference is being recorded.
It is now my pleasure to turn the floor over to Craig Director, Investor Relations. Craig, you may begin.
Speaker 1
Thank you, Sharon. Good morning, everyone, and welcome to HollyFrontier Corporation's first quarter twenty seventeen earnings call. I'm Craig Berry, Director of Investor Relations for HollyFrontier. This morning, we issued a press release announcing results for the quarter ending March 3137. If you would like a copy of the press release, you may find one on our website at hollyfrontier.com.
Before George, Tom and Rich proceed with their remarks, please note the Safe Harbor disclosure statement in today's press release. In summary, it says statements made regarding management expectations, judgments or predictions are forward looking statements. These statements are intended to be covered under the Safe Harbor provisions of federal security law. There are many factors that could cause results to differ from expectations, including those noted in our SEC filings. Today's statements are not guarantees of future outcomes.
The call also may include discussion of non GAAP measures, and please see the press release for reconciliations to GAAP financial measures. Also, please note that information presented on today's call speaks only as of today, 05/03/2017. Any time sensitive information provided may no longer be accurate at the time of any webcast replay or reading of the transcript. And with that, I'll turn the
Speaker 2
call over to George Demeris. Thanks, Greg. Good morning, everyone. Today, we reported first quarter net loss attributable to HFC shareholders of $45,500,000 or $0.26 per diluted share. Certain items detailed in our earnings release that Rich will discuss in his prepared remarks decreased net income by $12,000,000 on an after tax basis.
Excluding these items, net loss for the quarter was $33,400,000 versus a loss of $10,000,000 for the same period last year. Adjusted EBITDA for the period was $85,000,000 a 10% decrease compared to the first quarter of twenty sixteen. This decrease is principally attributable to lower refinery segment production and sales volumes from heavy maintenance during the period, partially offset by earnings from our recently acquired Petro Canada Lubricants business, PCLI. We're pleased to report the first two months of financial performance from PCLI and our consolidated earnings. Adjusted EBITDA for February and March was $28,000,000 in line with our annual guidance range.
Our sales averaged 24,140 barrels per day and our operating costs were $36,000,000 for the period. We are currently seeing strength in the base oil market driven by seasonal demand and look forward to recognizing a full quarter of earnings in the second quarter. This morning, we published a lubricants primer on our HFC Investor Relations page to provide you with a deeper insight into our lubricants business. The integration of PCLI continues to progress smoothly. We appreciate the warm reception from our new talented, knowledgeable and dedicated colleagues and welcome them and the skills and capabilities they bring to HFC.
We remain confident in our $20,000,000 per year synergy target and expect to realize these benefits as we further integrate our two lubricants businesses. Combining PCLI with our existing Tulsa Specialty Lubricants business creates scale, diversity, operational and financial synergies and a solid platform for growth. There is also opportunity to increase Group III base oil production through feedstock optimization, allowing for significant margin uplift potential. We are excited about our growing presence in the lubricants industry and are encouraged by our progress integrating PCLI into HollyFrontier. Our refining outlook for 2017 remains cautiously optimistic.
We anticipate solid economic growth will continue to support refined product demand and sustained growth in domestic crude oil production will lead to improved crude differentials. We're also optimistic that a more favorable regulatory environment could provide a tailwind for both the refining industry and the economy as a whole. With a large portion of our scheduled maintenance behind us, we are poised for strong financial and operational performance for the remainder of the year. Now I'll turn the call over to Tom for an update on our operations and commercial activity. Thanks, George and good morning, everyone.
On the operations side, we had a first quarter crude throughput of 371,000 barrels per day versus our guidance of three and fifty to 360,000 barrels a day as driven by a heavy maintenance schedule. During the quarter, we successfully completed a very large turnaround at our Navajo refinery. In fact, this turnaround was one of the largest in company history and included the revamps to multiple units as part of our $40,000,000 efficiency and debottleneck project, thereby increasing Navajo's overall throughput capacity and allowing us to run more of the higher API gravity crude oils coming out of the Delaware Basin. We had unplanned maintenance on our Tulsa Reformer and planned maintenance of the El Dorado Vacuum Tower. During the Tulsa outage, we were able to accelerate other maintenance and a catalyst upgrade originally planned for later this year, all of which allowed us to benefit from higher liquid yields and octane during the summer driving season.
We have no major planned downtime until our scheduled turnaround at Tulsa West in November of this year. We are focused on improving operations and reliability at our Cheyenne plant and we expect our performance to continue trending in the right direction in the Rockies region. During the quarter, we ran an average crude rate of 74,710 barrels per day. Cheyenne operations are improving and we ran at a very strong 48,300 barrels per day crude rate in the month of March. Adjusting for HEP tariffs embedded in the Woods Cross and Rocky Mountain OpEx was $8.91 per barrel.
This amounted to a 10% reduction over fourth quarter of twenty sixteen. On the commercial side, we ran 26% sour and 19% WCS and black wax crude. Our average laid in crude cost under WTI was $0.61 in the Mid Con, 3.83 in the Rockies and $1.7 in the Southwest. We are continuing to see compressed differentials in both the synthetic and WCS crudes due to the Canadian synthetic production interruption coupled with apportionments on import lines from Canada. We are optimizing our crude slates to minimize these effects by increasing volumes of Permian Basin crudes that can be delivered to the El Dorado refinery via the Centurion and Osage pipelines.
First quarter consolidated refinery gross margin was $7.74 per barrel, a slight increase over the $7.59 recorded in the first quarter of twenty sixteen. In the Mid Con and Southwest, our realized margin was impacted by our maintenance at our Tulsa, El Dorado and Navajo refineries. In The Rockies, our realized margin was impacted by the temporary Salt Lake City pipeline outage. However, we were able to backfill a certain portion of our crude slate and capture the increase in product cracks. During the increase in our lading crude cost, improved operations at Woods Cross and Cheyenne helped us realize almost a $4 increase versus the prior quarter.
Our rents expense in the quarter was $66,000,000 We remain optimistic that flaws and inequities that are inherent with the mandate will be addressed by the present administration. For the second quarter of twenty seventeen, we expect to run between 890,000 barrels a day of crude oil. And with that, let me turn the call over to Rich. Thank you, Tom. First quarter included several unusual items.
Pretax earnings were negatively impacted by $15,600,000 in acquisition related charges, a $12,000,000 lower cost to market charge, dollars 10,200,000.0 in charges attributable to the inventory value step up at PCLI and a $4,500,000 charge for HollyFrontier's share of Holly Energy Partners' early extinguishment of debt. These charges were partially offset by a $24,500,000 gain on foreign currency hedges related to the purchase of PCLI. As George mentioned, we have included a reconciliation of these items in our press release. PCLI's adjusted EBITDA over two months was $28,000,000 PolyFrontier realized a $10,200,000 non cash charge through PCLI's cost of goods sold for the step up in inventory valuation associated with purchase accounting. We expect to realize a final $5,000,000 of this non cash step up in the second quarter.
While it is early days, we are very pleased with the performance of PCLI and look forward to the opportunities to come. For the first quarter of twenty seventeen, cash flow consumed by operations was $39,400,000 including turnaround spending of $48,000,000 HollyFrontier's standalone CapEx totaled $49,000,000 for the first quarter. For 2017, we expect to spend between $3.75 and $425,000,000 of standalone capital, including turnarounds. This is a decrease of $25,000,000 compared to our original guidance. Additionally, we expect to spend $40,000,000 of capital for HEP and $30,000,000 for PCLI.
As of March 3137, our total cash and marketable securities balance stood at $130,000,000 During the first quarter, we announced and paid a $0.33 regular dividend, putting our yield at 4.7% as of last night's close. As of March 31, we have $1,000,000,000 of standalone debt and no drawings under our $1,350,000,000 credit facility. This puts our liquidity at a very healthy $1,500,000,000 and debt to capital at a modest 18%. On Monday, HollyFrontier received an investment grade rating of BBB- with a stable outlook from Fitch Ratings. We now hold investment grade ratings from S and P, Moody's and Fitch, which illustrates our strong balance sheet.
HollyFrontier owns 36% of Holly Energy Partners, including the 2% general partner interest. HEP units continue to perform well and the current market value of HollyFrontier's LP units is over $800,000,000 First quarter general partner distributions were $79,800,000 a 43% increase over the same quarter of 2016. As part of the lubricant primer posted today, we have published benchmark margins for Group one, Group two and Group three base oils. Going forward, we will publish these lubricant indicators monthly along with the WTI based three:two:one margins for each of our operating regions. These regional product and base oil indicators do not reflect actual sales data and are meant to show monthly trends.
Realized gross margin per barrel may differ from indicators for a variety of reasons. You can find this data on the Investor page of www.hollyfrontier.com. Finally, we'll be hosting an Analyst Day on the afternoon of December 7 at the New York Stock Exchange where details will follow. And with that, Sharon, we're ready to take questions.
Speaker 0
The floor is now open for questions. Thank you. Our first question is coming from Doug Leggate from Bank of America Merrill Lynch. Please go ahead.
Speaker 3
Thanks. Good morning, everybody. And thanks for the additional detail on lubes. I think we all need a little bit of help with that. So I've got two questions, if I may.
So my first one is on obviously, capture rate was hit by maintenance and associated opportunity cost this quarter. But I'm trying to understand the impact of the RINs impact the RINs cost. And I wonder if you could walk us through the sequential change in costs. And what I'm really trying to get at is my understanding is you were kind of over inventoried on RINs at the end of last year. Does that mean that you get a delayed impact from the reduction in RIN costs?
In other words, will we see it show up a little more aggressively in subsequent quarters? And I've got a follow-up, please.
Speaker 2
Hey, Doug, it's Rich. So, short answer is yes, you're correct. We use we did consume some RIN inventory during the quarter and we use a weighted average cost of accounting for those RINs. So we did have we were all running RINs that are higher than market through the P and L during the first quarter. Long story short, yes, you're correct, we'll see a delayed benefit from the improvement RIN market.
Speaker 3
Can you quantify the impact, Rich, or the impact of the delay? In other words, if you were using spot RINs versus inventory RINs, what would the difference be?
Speaker 2
It would be about a 15,000,000 to $20,000,000 difference.
Speaker 3
Okay. That's really helpful. Thanks. I guess my follow-up is I've got a number of things I wanted to ask, but I'll just keep it to two questions. So I'll keep it I'll just go with PCLI.
You've had it for a couple of months now, I guess. The run rate seems to be a little bit above 150,000,000 the greater than 150,000,000 guidance you suggested for EBITDA. What are you seeing good and bad from as you integrate that business? And is that guidance still are you still comfortable with that guidance? What I'm really getting at is, it looks like there might be some upside to that guidance.
I'll leave it there. Thanks.
Speaker 2
Yes, I wouldn't bake in that upside just yet, Doug. I mean, it's still very early, two months into this. But to your original question regarding the good and the bad of what we're seeing from PCLI, it's all on the good side. I mean, the people we're getting have been very impressive. They've been very cooperative.
It's basically they feel like they've been unleashed and freed up to do a lot more creative thinking and doing than they have under prior ownership. So that's a testament to them. I think that's a testament also to the culture we have at HFC. But we across the board, as far as both the base business and the potential upsides we see through synergies and feedstock optimization, all that is exactly as we expected, if not better than when we walked in the door.
Speaker 3
I appreciate that guys. Rich, Craig, congrats again on getting your first quarter under your belt.
Speaker 2
Thanks, sir.
Speaker 0
Your next question comes from Blake Fernandez from Scotia Howard Weil. Your line is open.
Speaker 4
Hey, guys. Good morning. I'll ask two questions both on lubes. For one, I'm not as familiar with the volatility or seasonality of the market. So I'm just curious, is 1Q typically a stronger or weaker period?
So in other words, is it fair to kind of extrapolate those two months across the year? And then maybe I'll just ask both questions and you can respond. The second question is on the synergies of $20,000,000 through 'eighteen. For one, I wanted to confirm that, that is not part of your original kind of 150,000,000 midpoint of EBITDA. And then secondly, when you think we can maybe start to see some of that beginning to flow through and actually hit the EBITDA stream?
Thanks.
Speaker 2
Sure. I'll try to take those. As far as seasonality or what February and March are indicators versus the full year, I would say that February and March are not necessarily the peak season. I think the peak is really coming more in the second quarter. But there's not as much seasonality as perhaps our prepared remarks meant to imply here.
It's more of a stable business. But if you want to call one quarter more seasonal than the other, probably call it the second quarter in preparation for driving season and warmer weather when people tend to change out their oil more. As far as the synergies, again, we're very early into this. We're just getting to know each other between our Tulsa and our PCLI lubricants businesses. But I think you can start to expect some of that to flow through late this year, but most of it will start coming in 2018.
Speaker 4
And George, just to confirm that is not part of the kind of the EBITDA of 150,000,000 that you articulated when you kind
Speaker 2
of That's above the base expectation for the business, Blake. Okay. Thanks, guys.
Speaker 0
Sure. Your next question comes from Paul Cheng from Barclays. Your line is open.
Speaker 5
I think my first question is for Rich. Rich, on the roughly 23,000,000 yen operating profit and EBITDA about 20,000,000 do you have a split between the base oil side, the manufacturing side? And what is the lubricant side, the wholesale or the marketing side? And also whether the result is pretty even between February or March or one month is substantially better than the other?
Speaker 2
So Paul, on the first question, I think it's too early for us to get to that level of granularity. We'll work to that over the course of the year, as we've mentioned, right? We expect to have more disclosure over time here. On your second question, I think it's pretty evenly split basically between February and March. There was no major difference between the months.
Speaker 5
And second question for I think this is probably for George. George, is there any particular good reason that you want to keep the GP in the HEP instead of say maybe restructure and in exchange of a more maybe transparent vehicle in the LP given that it's already in the high speed and also that I mean by doing so that maybe we allow the HEP have a lower capital cost and perhaps that improve their competitive position in the market?
Speaker 2
Okay. So I think the answer to the first part of your question is regarding the GP, I think there is a simple one word answer for that and that's control. So we want to keep the GP for very simple control reasons. But I think your larger question is really intended at the cost of capital side. And I think we've said previously and we're still in the very early stages of pursuing this, Paul.
We do want to look at the IDRs and see if there's some sort of deal that can be struck between HFC and HEP that's a win win for both, that basically lowers HEP's cost of capital as a result.
Speaker 5
Do you have any kind of timeline in mind when that you may make the decision?
Speaker 2
Well, we think we can get something scoped out this year. As you know, these things have a lot of tax details associated with them and our people have been a little bit tied up with PCLI, those that we need to really take the deep dive on the detailed issues here. So now that we're
Speaker 5
I'm sure Rich doesn't need to sleep, so he will be able to work
Speaker 2
for you. Well, Rich is already growing fangs from being the vampire with no sleep, so. Well, thank you. Bottom line though, Paul, we think we'll have something flushed out either way by the end of the year.
Speaker 4
Got it. Thank you.
Speaker 0
Your next question comes from Ed Westlake from Credit Suisse. Your line is open.
Speaker 6
Yes, good morning. I guess two questions. One, you shouted out some improvements in the assets at Navajo and then Tulsa from the turnaround work that you did in the first quarter. I wonder if you can quantify the EBITDA uplift you think in a normal steady state that would come from those improvements? And then the second question is around the contracting of Bakken and WCS crude.
Obviously, those diffs have tightened because of daffle and Syncrude. That clearly would have a negative impact. And I'm just wondering if there's anything you can do mitigate or any color you can add to that. I appreciate it, Yes.
Speaker 2
Sure. Ed. I don't I think we've given a little bit of directional indication of what we think we can do with the projects at Navajo and at Tulsa. And again, directionally at Navajo, it's going to buy us a little bit more crude rate and make us more efficient in our downstream units by eliminating recycle streams that will basically get us a few thousand barrels per day more capacity in some of our downstream units like the DHT and NHT. But I don't think we want to put an EBITDA dollar figure to those, Ed.
I mean, it's just
Speaker 6
We can do that work.
Speaker 0
That's fine.
Speaker 2
Okay. Same thing at Tulsa, I mean, Tulsa, the new catalyst gets us better yields and more octane capability. But again, finding a specific EBITDA range or target to that is not something we'd like to do. On the crude supply side, as you said Bakken and WCS have tightened up and I'll let Tom give you a little bit more feel and flavor for that. Sure.
Good morning, Ed. Let's just talk about WCS first. As previously mentioned, what we did at the El Dorado refineries, we increased runs of what we call Permian Sour Blend that we can source in the Permian Basin and bring it over. So those during the month of March, we got as high as 65,000 barrels a day of deliveries from Permian Basin, which was an all time record for us. So that helped us reposition our crude slate to take advantage of higher WCS prices at Cushing for those barrels.
And then at Cheyenne, what we've seen in the Cheyenne market, we've seen very high asphalt prices this spring that still allows us to run WCS at a good margin there. So what we've done is we've trimmed back our coker, made more asphalt and optimized profitability there. And Bakken prices, we buy everything on a delivered basis at Cushing on Bakken and we saw some tightening towards the end of the quarter on because of DAPL that we will readjust as we move forward and replace with other grades as per the LP.
Speaker 6
And then just a very quick one on lubes. The data pack you've put out has a bump in margins in March. Is that just the seasonality you're referring to for the 2Q peak? Or is that just decline in oil prices and some stickiness on the base oil prices relative to oil? Just trying to get a sense of how
Speaker 2
these Yes, prices play more attributable to the seasonality.
Speaker 6
Okay. Thank you.
Speaker 2
Yes, thank you.
Speaker 0
Your next question comes from Phil Gresh from JPMorgan. Your line is open.
Speaker 4
Hey, good morning. First question is just a follow-up on the RINs. I believe in the first quarter of last year, was $46,000,000 And I know you mentioned the 15,000,000 to $20,000,000 difference using weighted average cost. I just want to get a sense of how you think the rest of the year would progress based on the current RINs price relative to what the full year cost was for last year?
Speaker 2
So Phil, I think, look, we're going to shy of given how absurd this market is, we can't even pretend to give you guidance on what RINs are going to do going forward.
Speaker 4
Okay. So I mean, I guess okay, so moving on to my next question then. So for HFC, how are you thinking about the droppable EBITDA at this point to HEP? And do you anticipate this year potentially having any drops?
Speaker 2
So I think, Phil, we're not anticipating a dropdown in 2017. Obviously, did an outsized dropdown with the Woods Cross processing units last year. We think we've probably got a little more runway in the dropdown of the processing units. Obviously, we've done all the traditional logistics in terms of pipes and tanks. But really, what we'd like to do and this gets to the IDR discussion is we'd like to see HEP continue to grow externally, if you will.
I think the major area where we still have opportunities to leverage HFC for HEP's benefit is replacing other third party service providers with HEP. Again, we spend about $1,000,000,000 a year moving things around at HFC, not meaning to imply that all of that is addressable through this strategy, but there's still opportunities for us to give some of that business to HEP.
Speaker 4
If I go back to the Analyst Day, I believe you had talked about $200,000,000 of drop proceeds per year and I know you had a larger one last year, so maybe nothing in the queue for this year, but I thought that there were more there was more in the backlog, I guess.
Speaker 2
Yes. So Phil, we at the time we mentioned that those were going to be lumpy. So the 200,000,000 was not meant to be ratable by year, but it was the easiest way to portray the math. It's also somewhat related obviously to pace of projects and projects that fit the model, if you will, at HollyFrontier. So obviously, we've cut capital spending back a little bit.
So I think we'd expect that again, we've got some more runway there, so we wouldn't expect to do anything in 2017.
Speaker 4
Sure. Okay. And just last question just on the CapEx. Can you remind us how much is the sustaining capital requirements underlying that those numbers you gave? And just the turnaround piece of that, how much of that was for turnarounds and whether you consider this a normal number or a higher than normal number?
Speaker 2
So, think our turnaround number this year is, call it, 150 to 165, that's higher than normal this year just based on timing of maintenance. Sustaining capital on a run rate basis, call it about $100,000,000 a year.
Speaker 4
Okay, thanks.
Speaker 0
Your next question comes from Roger Read from Wells Fargo. Your line is open.
Speaker 2
Yes, thanks. Good morning. Good morning, Roger. Guess maybe following up a
Speaker 7
little bit on the PCLI piece here. You've obviously highlighted not a lot of volatility in the business,
Speaker 2
a little better
Speaker 7
March. Curious as you look forward though and maybe a little bit back from the time you acquired it on pricing and some of the moves in crude, because we had the big move in crude kind of December and January. Has the company has the business caught up with that move in crude and so we're okay from this point assuming no major price moves? Or is there still more catch up to occur and that feeds into some of the guidance for the full year?
Speaker 2
I think as you're hinting at, there's generally a lag between crude moves and lubricant price moves. So to the extent that crude prices have moved up in the last few months, I think there's still some catch
Speaker 3
up to
Speaker 2
be done on the lubes price side.
Speaker 7
And is there a rule of thumb you think we can use in that, I mean sixty, ninety, one hundred and twenty
Speaker 2
days or There really is no one number, but I would say somewhere between two to four months, so maybe ninety days on average.
Speaker 7
Okay, great. I'm sorry. Go ahead. I mean
Speaker 2
to cut you off, George. That's all right, Roger. It's just tough to give specific guidance here because there's so many different products that are produced and so many different pricing relationships. So we'll be able to provide more color as we get further into the details of the business as well.
Speaker 7
Sure, absolutely. And then back to I think it was Ed's question about EBITDA out of the refineries post some of these improvements. Maybe if you don't want to talk about EBITDA guidance, can you give us an idea of maybe Navajo huge turnaround as you said, kind of expectations for either higher run rates or higher level of utilization and maybe also with some of the other units here?
Speaker 2
Yes, I think the highest level again, I think we expect to get about 5,000 barrels per day more crude capacity at Navajo. So we've typically run-in the low 100,000 somewhere 100,000, 305,000 barrels per day. We hope to be pushing as high as 110,000 with the modifications that were made during this turnaround.
Speaker 7
And then I guess really I was kind of trying to get to maybe like a reliability aspect. I mean do you I know until you run it, you can't say for certain, but is there an expectation that reliability has improved here and at some of the other units, including Tulsa, following some of this work?
Speaker 2
Yes. I would say that Navajo has been one of our more solid performers from a reliability perspective. They can get locked into 105 for extended periods of time and we look forward to getting them locked into the 110 for extended periods of time.
Speaker 7
Okay, great. Thank you.
Speaker 2
Thank you, Roger.
Speaker 0
Your next question comes from Chi Chao from Tudor, Pickering, Holt. Your line is open.
Speaker 4
Thank you. George, you mentioned that you've undertaken focused efforts to improve operations the Rockies. Can you provide some specific details on those initiatives? And what results have you seen so far?
Speaker 2
Yes. We've dedicated a lot of our talent across our refining system, that's corporate resources from Dallas as well as resources from our other refineries, especially our El Dorado refinery. So our thanks go to all those dedicated people that are spending time in Cheyenne, Wyoming versus with their families in the evenings to get this done. We've been at this since our last earnings call in earnest and we're very encouraged by what we've seen. I think I can't remember the exact number, but from the fourth quarter of last year, we ran roughly in the mid-30s.
And as Tom said in his prepared remarks, in March, we ran 48,000 barrels per day. There's a lot of days where we're hitting 50,000 barrels per day. And that's where we need Cheyenne to be in that high 40s to 50,000 barrel per day range. That fills up all the downstream units. And we're looking at the downstream units, especially the DHT and the FCC to get another 1,000 or two barrels per day more throughput through those units.
So it's a very focused effort. It's led by Tom Chettina, who heads up our reliability group here corporately in Dallas. So kudos to Tom and many, many others that are making that sacrifice to get this done for us.
Speaker 4
George, can you talk about operating costs in that region? Any sort of guidance going forward, what we can expect on OpEx?
Speaker 2
Ashish, I think we look, we'd expect to see continued improvement to George's point, certainly on a per barrel basis on a total on an aggregate number. Two things to highlight there, that should remain relatively stable at that point. And keep in mind that our Rockies OpEx includes tariffs associated with the drop down to AGP. So that's if you want to think about that's not true or clean operating cost. So look, we expect to see continued improvement certainly on a per barrel basis as throughputs continue to rise.
So as Rich is getting, our improvements are going come more from the denominator, Chi, as we get the barrels up. And we would like to get the Rockies to seven dollars per barrel. And that excludes HEP types of drop downs that really we can't hang on our operating group, that's more of a corporate finance decision.
Speaker 4
Great, thanks. And then Rich, what was the working capital change in the quarter?
Speaker 2
We did draw working capital, I want to say around the number right in front of me, 50,000,000 and $100,000,000 this quarter.
Speaker 4
Okay. And is that something that reverses out here in Q2 or balance of the year?
Speaker 2
Yes, I would expect over the next couple of quarters. So, most a lot of that was driven by the Navajo turnaround. We stored up a lot of refined products, so we could supply our customers during that time period. We also typically do a lot of time trades during that period, storing barrels early in the first quarter for subsequent sale in the second quarter.
Speaker 4
Okay. And your cash balance was pretty low at quarter end. Do you have a more current cash balance figure and what sort of minimum cash levels are you comfortable with on running the business?
Speaker 2
So order of magnitude, the cash balances remain basically the same. Obviously, there's a lot of volatility intra month with timing of crude payments. Generally speaking, look, our liquidity is very comfortable at 1,000,000,000 point dollars I don't know that we necessarily think about it as a cash balance. It's more of
Speaker 4
a liquidity question than anything. Okay, great. Thanks. Appreciate it, Rich.
Speaker 2
Thanks, Chi.
Speaker 0
The next question comes from Paul Cheng from Barclays. Your line is open.
Speaker 5
Hey, guys. Two quick follow ups. In terms of the RIN carryover from last year, Richard, by the end of the first quarter, should we assume that it's already over so that the second quarter forward that your win cost will essentially be based on the spot?
Speaker 2
Yes. Paul, I don't think we want to get into that detail because it starts getting into the commercial side of our business, and I don't think we want to tip our hand to the market there.
Speaker 5
All right. That's fine. The second one is that with all the turnaround plan and unplanned, do you have any rough estimate that what's the opportunity cost associated with each one, the plan and the unplanned, including the loss of opportunities?
Speaker 2
Yes, I would probably put it in the $40,000,000 range, Paul. That's excluding the large turnaround at Navajo, because we don't typically look at LPO associated with large planned turnarounds like that.
Speaker 5
So the $40,000,000 is essentially for the unplanned downtime?
Speaker 2
That's essentially for Tulsa and El Dorado, for the planned downtime at El Dorado for the vacuum tower and the unplanned outage at the Tulsa CCR.
Speaker 4
Okay, very good. Thank you.
Speaker 0
At this time, I will turn the call over to Mr. Barry.
Speaker 2
Thanks, everyone. We appreciate you taking the time
Speaker 1
to join us on today's call. If you have any follow-up questions, as always, reach out to Investor Relations. Otherwise, we look forward to sharing our second quarter results with you in August.
Speaker 0
Thank you. This does conclude today's teleconference. Please disconnect your lines at this time and have a wonderful day.