Q1 2022 Delek US Holdings Inc Earnings Call
Approximate presentation materials used during today's call can be found on the Investor Relations section of the Delek U S website. As a reminder, this conference call may contain forward looking statements as that term is defined under federal securities laws.
Please see slide two for the Safe Harbor statement. In addition to reporting financial results in accordance with generally accepted accounting principles or GAAP. We report certain non-GAAP financial results investors are encouraged to review the reconciliation of these non-GAAP financial measures to the comparable GAAP results, which can be found in the press release posted on the Investor Relations.
Section of the website, our prepared remarks are being made assuming that the earnings release has been reviewed and we are covering less segment and market information that is incorporated into the press release.
On today's call Ruben will review financial performance I will cover capitalization and guidance Todd will cover operations and Capex and Uzi will offer a few closing strategic comments with that I will turn the call over to Ruben.
Thank you Blake on an adjusted basis for the first quarter of 2020 to Delek U S and a net income of $42 9 million or <unk> 58 per share compared to a net loss of $80 million or $1 <unk> per share in the prior year period, our adjusted EBITDA was $172 8 million in the first quarter compared to <unk>.
$12 6 million in the prior year period.
I would like to highlight that during the quarter. The Tyler refinery inventory was retrospectively converted from LIFO accounting basis to FIFO. This puts all our refineries on the same basis with FIFO inventory accounting. This is an opportune.
Time to improve the communication of our results.
The street in an effort to simplify messaging, we plan to discuss underlying performance on an adjusted EBITDA and EPS basis going forward and will no longer highlight the impact of other inventory and hedging within our discussion of results.
Moving to slide four we provide the cash flow waterfall in the first quarter of 2022, we had a positive cash flow of approximately $27 million from continuing continuing operation, which includes a working capital detriment of $77 million. Please note that the financing activities bucket includes 64 million share purchase from icon grouping.
March with that I will turn it over to Blake. Thanks, Ruben Slide five highlights our capitalization. We ended the first quarter with $854 million of cash on a consolidated basis and one $3 6 billion of net debt.
Excluding net debt at Delek logistics of $903 million, we had net debt of approximately 456 million at March 31 of this year moving to slide six we provide first quarter guidance for modeling operating costs are forecasted to be in the range of $165 million to $175 million.
Regarding the 64 million share purchase from the icon group on May seven this represented four 7% of our shares outstanding.
Given that the transaction occurred fairly late in the first quarter the full impact of our share count will not be witnessed until the second quarter results. Finally, the planned acquisition of <unk> places us well on track to achieve our longer term midstream EBITDA target of.
365 million to $395 million across our segments. This transaction should help transform <unk> into a larger more scalable entity with approximately 40% of pro forma contribution margin coming from third parties on a fixed fee basis.
Along with broader diversification within the Permian basin, and expanded product mix into natural gas and water collectively these attributes should further propel detail towards becoming a true standalone entity and enhance the underlying value of decay as interest in the company with that I will turn the call over to Todd discuss operations and Capex.
Blake during the first quarter, our total refining system crude oil throughput was approximately 272000 barrels per day.
In the second quarter of 'twenty, two we expect crude oil throughput to average between 280 and 290000 barrels per day or approximately 94% utilization at the midpoint.
With no major turnaround activity planned for the balance of the year, we are in a strong position to capture the elevated margin environment.
On slide seven capital expenditures during the first quarter were $33 million.
Full year 'twenty two capital program is expected to be in the range of $250 million to $260 million on a consolidated basis. This excludes capital spending associated with the planned three bear acquisition that is expected to close around mid year.
Before turning it over to <unk> I would like to highlight the significant growth being witnessed in our Permian gathering system.
Growing producer demand drove a significant ramp up in volumes with a 20% increase sequentially and we expect volumes to at least double from <unk> 21 to <unk> 22.
With that I'll turn the call over to <unk> for his closing comments. Thank you Todd and good morning, everybody.
Adjusted EBITDA reflected a significant improvement and we expect ongoing momentum into the second quarter based on prevailing margin and no planned maintenance.
5% share purchased in March.
Moving to be solid investment based on recent equity performance as we generated free cash flow. We will continue to look for opportunities to enhance our balance sheet and returning cash to shareholders.
The increase in the Permian activity.
Providing multiple benefits to our company.
Legacy PPG system, where single opportunities for organic growth.
Not only does this provide.
Provide an avenue for incremental earnings in our gathering business, but should ultimately lead to more attractive crude discount in our refining system.
Additionally, strong producer nominations gave us the confidence to pursue the announced Ribera acquisition.
Strategic opportunity will help springboard dk to be more competitive among midstream peers.
And provides a platform for further growth into the future.
After a challenging third quarter through the pandemic led downturn our.
Our company is firing on all cylinders and well positioned to capture opportunities that exist in the market.
Operator would you please open the call for questions.
Thank you.
Now begin the question and answer session.
You ask a question you May press Star then one on your telephone keypad.
Thank you speakerphone, please pick up your handset before pressing the keys.
Your question. Please press Star then two.
At this time, we will pause momentarily to assemble our roster.
Our first question comes from Carly Davenport with Goldman Sachs. Please go ahead.
Hey, good morning, Thanks for taking the questions here I wanted to just start on the refining side. The <unk> volume guide that you provided looks quite strong. So I guess can you just talk a bit about how operations have been trending so far this quarter and really if you can run while at these utilization rates, where could you see cash flow or EBITDA power trending for the quarter.
Given what we're seeing on the margin side.
Good morning Collyn.
Thanks for taking the time to ask US these questions. So.
We said all along that.
That would be not the other one doing this.
No major turnarounds.
<unk> couple of things in the fourth quarter, but the reason you see the 272.
Number actually.
Right now over 100% nameplate running for quite some time.
So I don't want to commit on behalf of all of our.
Our lead operator media server will just got nominated I want him to <unk>.
The expectations about it looks pretty strong right now.
Great I appreciate that color and then the follow up was just kind of on capital allocation, you've reduced some shares outstanding with the repurchase during the first quarter. So just wanted to get the latest temperature around potential for further capital returns from here, if you consider something sustainable or if the preference is to be more opportunistic.
We saw in the first quarter.
Got it.
I've said to the guys here that I'm going to be.
To give reality the way we see it.
The module, we see now.
And I've been doing it long long time.
I've never seen any margins like that in my entire career.
And the market have changed dramatically and we positioned ourselves we didn't know that the margins will be strong.
<unk>.
No.
With no major NOI.
Sure.
Maintenance.
Obviously took the opportunity to buy your idea of share from the icon group up 18, 18000 change we're already at 40%, 45% on that investment.
Your investors expect from us and Thats, what we do.
The.
Our dividend as well as the buyback is certainly one.
On the table.
Our mall will look on doing that.
Towards.
Second quarter or the third quarter, when we announced the second quarter, we thought we think.
There's no reason to believe that we won't look at both.
In doing that depends on what.
The market looks like but right now the margins are so strong and operation.
Good so.
Bullish about returning cash to shareholders on top of it.
Other investments similar to what we did with.
We don't have anything on the horizon with acquisition, we just did this one so.
Cash to shareholders. It certainly on the table.
Great. Thanks for that and last just wanted to congratulate you on your retirement and thank you very much for all of the value perspective.
Thank you so much thanks for your cardboard colleagues.
Our next question comes from Roger read with Wells Fargo. Please go ahead.
Yes, good morning, Uzi and <unk>.
I assume this is going to be your last major call with this if so then.
For my congratulations as well, although I know you're.
We're not leaving the company altogether.
Honestly this is going to be.
The one before the last one my last one will be the second quarter.
This.
I want this quarter could be the prior quarter. If you will so we'll see maybe we'll do a winning lap over this quarter.
Alright.
Ultimate here and then.
The Cuda drive next time.
I just had a couple of questions one.
Historically Delek has had a fairly high distillate yield as a refiner and certainly among what we consider the.
Smaller mid smid cap refiners. So I was curious how thats still appears assuming that still is intact. How that's running through the system and then as you look at <unk>.
Environment today, that's very different than what we've typically seen when we think of.
Outsized earnings power for Delek, it's always been more of a crude feedstock driven this is very much a crew.
Crack spread and capture driven event.
How do you all plan to run things to take advantage of that.
Well.
Certainly you saw in the past the four handle.
With crack spread.
And when I say, 40% or more 41, 42% to 43% for distillate with Grasberg being $80 for distillate or $70. We're pushing everywhere. We can through the DHT is different the acute into different places and.
Gladly or Luckily, we have we have some room for days like that both in El Dorado Adient.
So we are trying to even buy some pizza.
Feedstock that you don't see in the numbers.
These two systems are obsolete.
We're planning to be.
With the four handle 40 40 something percent for the quarter obviously.
Higher than 42, 43, you would be would be just.
Great achievements.
Okay and then.
As we think about the.
I think big spring is a little more gasoline a little less diesel then the rest is there any are there any tweaks you're doing there or is it just let's assume that runs as is as we think about sort of capture issues here.
That is all about.
That's all we want to point for the third quarter.
And maybe I don't know if you want to say something about that but we did well.
Opportunity to fix a couple of things on the DHT in big spring during the during the fourth quarter.
We can clean it up maybe I don't know if you want to add anything to that yes, we did some preemptive maintenance and the plants running full now and reliably.
So the DHT in Big Spring you should look at the historic numbers running.
We're running it full.
Okay, Great and then just a final follow up question on that is there anything you will change in terms of the crude youre running too.
Put a higher distillate cut into the system or the downstream units enough for that meeting is there any reason to search for Canadian barrel or any other heavy barrel out there.
Roger.
Bold and this during times like that or do you want us to run with.
What you're annoying reliable everywhere that we can.
Pushed through the system.
Is very viable so we're not trying any new types of group.
I'm going to tell you, though that because of our experience and because of the work we've done over the last few quarters, we do Rob as I said more than 100% utilization.
Loud and clear thank you.
Our next question comes from Manav Gupta with Credit Suisse. Please go ahead.
Good morning, I, just wanted to say that I don't have been covering this space. It's been about 10 years I know people on the call I have been covering it for longer but over these last 40 earnings season also.
I've always looked forward to your comments on macro and refining Uzi. So I would say boost to the refining earnings season would just not be the same without your insights.
I appreciate that one that we have been we've known each other for a long long time and your support and other support.
Something that I Couldnt do it without you so really really thank you for the for the nice words.
So a quick question here is over the last 10 years.
Let's go back.
Okay.
We'll see.
Permian Refiner, who was also trying to build its midstream infrastructure to maximize the Permian crude usage androids earnings now as the company has evolved particularly in the last two or three years.
The perception that is here is that now delek.
Permian Midstream company that also happens to run Permian crude so.
But still has inverted a little.
And your midstream earnings of continuously growing so if you can talk about a little about how people perceive delek today versus what they perceived as probably seven or eight years ago.
I'd rather leave it at that thank you.
Thank you Mike.
Let me take it that way, we always said and I remember one of Youll note, saying that this is.
Debt.
We are changing the company.
Always say that the midstream is a key component of our strategy.
The.
Additional thoughts.
We certainly feel that we achieved our target of $375 million EBITDA.
We're going to integrate that into our system.
Probably.
Need to remember that we still have wink to Webster.
And note that.
That's something that.
We'll have a lot of value in it, especially in light of the activity that within the Permian That's an opportunity for me to say that we actually saw gathering going too if you remember manav.
80000 barrels by the end of last year.
The combination of them.
Bob and talking now is exceeding 150 and counting.
The activity in the Permian is certainly picking up.
And we are going to continue with this midstream our strategy all along you thought that we are.
We saw some units and the EBITDA is growing at the same time we are.
We want to capitalize on refining during.
During the downturn there were some talks about different there we find it to be sharp.
I felt and still feel that your inbound tons. If you just think youll build.
And you stick to it and then all of a sudden when the often it comes in spades. So.
I would.
Say that the midstream.
Certainly a big component of our strategy, but we're fighting for sure is something that we will continue to look up and make sure that this is the bread and butter of our company.
Thank you so much.
Our next question comes from Doug Leggate with Bank of America. Please go ahead.
Thank you.
Good morning, everyone.
<unk>.
I guess I'll add my congratulations I think you are retiring I thought you were just becoming the chairman, but maybe I got that wrong anyway. Congratulations.
I guess, it's a long time since we first met back in 2004, so I'll put myself.
Doug.
I'm going to have some.
So one of US, though is I'm not sure which one.
Yes.
Yes.
So is the I did want to ask you a big picture question.
When we when we did meet that was during the original Golden age didn't last very long I guess, it seems to us with a lot of structural changes. So I'm just wondering if you could offer your perspective.
And how you see the U S.
As a generic refining center.
Wilco.
The bike seats.
Do you think we've moved to a sustainable cost advantage with the capacity closures in gas and so on I'm just curious on your view.
That's a great one.
<unk>.
And by the way I read your note about the new Golden age I would even call it that one <unk>.
We are going to show our ages now.
But when we spoke about Rita and Katrina, we thought Hey, Wow. This is crazy and then profit three four weeks now we are into this thing and I don't know $80.
Correct.
No.
Sure.
The wall in Ukraine.
In my mind is not going to.
And tomorrow morning.
Tomorrow morning.
Yes.
There would be some time before.
Things pick up.
In Ukraine.
In Russia Im sorry.
The same time, there were a lot of closures of refineries, including here in the U S and.
The.
Good situation didn't get much.
There because of the downturn and because of the lack of investments.
I think what will happen now is.
Producers still we hear a capital discipline, but how do you.
Ill say, one day capital discipline, the second day and then after we start to loosen up and so on that's what we see immediately from the small guys on our gathering so what we would see in the.
<unk> is picking up in our mind picking off of.
Drilling and that will lead to a differentials.
Widening up.
On top of the ESG movement, which we all know exist.
EOG and we all know that.
If you run like with Bell.
Mission Youre greenhouse emission is much lower.
Then when you run the heavy sour crude I think that would be pushed for that that well in the U S. So overall I think that Youll note in your timing, we'll just spot on.
Looking at the industry I think we're right.
12 to 18 months ahead of us.
Well as I think is longer than that but thank you for the comments.
As always though I do have to challenge you on.
On something right, so I'm going to challenge you on.
On the stock over that alone most of that period.
<unk>, obviously been up and done with the cycle, but in absolute terms, it's pretty much been range bound for almost 10 years.
And when I look at things like the cost of the industry. Your G&A is about.
Thirds of modest on but the company is about a 10th of the size of the model and just use that as an example, I'm just kind of curious how you see the future for for Delek US is our refinery focused on the way you're focused on the lower 48, and one could this guidance, which have obviously tightened some.
Is that a still a rule do you think for $2 billion to $3 billion refiner or do you see delek ultimately as part of a broader longer term consolidation story.
Okay. So you have two different questions, but I'm going to challenge you bet. If you will.
The combined operating cost to go with G&A, you would see that would not only we're in line, but can we embed in August and happy to share that data with you as we can.
Tickets on a quarterly basis, we want to challenge ourselves on that but I'll leave it to that youre asking much bigger question than the G&A because the G&A is just allocation between.
Buckets.
Yes, Sir decay decay and I've said it in our board in the past.
Dk as well as other more companies don't need to be Standalone companies.
It's not a secret that during the pandemic.
With CVI buying shares I thought that.
It's better to be.
Together.
You can't force somebody to merge with another company if they don't want to do that I still think that.
More companies.
Not only on the refining side also on the midstream side.
We see that the.
The market favors the big name of <unk>.
MPC the market also favorite midstream big guys, even though <unk> performed very very well.
Enterprise.
IPD.
Magellan and other name Kinder Morgan So I think the.
The industry, especially in light of these Gordon agents or our diamond.
The last 12 to 18 months 20.
24, 36 months this industry is ripe and should be consolidated.
Good luck as you I appreciate your comments.
Thank you.
Our next question comes from Carlos <unk> with Bank of <unk> resources. Please go ahead.
Yes.
Good morning.
<unk>.
Busy perhaps you or maybe you could talk about the.
The outlook for your cash return structure your thoughts on Q1 about 800 to 900 million of EBITDA as being a mid cycle view.
Youre, obviously way above that you're planning to put.
Some sort of framework and the way that so many other companies now have.
Absolutely.
The capital allocation of the capital return as you said these are really extraordinary time and Theres no reason to believe that over the years you have been with us long long long time.
We increased the dividend on a quarterly basis.
<unk>.
With the times the way they are today and the amount of free cash flow.
Our cash.
Returning cash to shareholders is certainly funding on the on the.
On the radar to be honest, we consider to do it even this quarter, but we decided not to do it just to be prudent and to see how things shake shake up but the way its growing our board certainly.
It looks like very favorably.
Got it.
Could you just see your usual roundup.
Well, we know that demand in your region is a bit different but obviously, what we're looking at is demand destruction pricing levels.
Again, given given your location.
Maybe.
Somewhat misleading, but nevertheless could you just talk a little bit about the macro which is to say what you're seeing on the demand side and then it's always interesting to hear your perspective on what's happening in the Permian on the.
Supply side, Thank you Lucy and Im sorry, Im not being very jokey, but I did enjoy your line about being old intensive.
Well.
As we say.
With the Permian activity picking up the demand is certainly there I'll say that we're running wide open.
<unk>.
Nowadays.
And we put them.
Something that I think are in the mid <unk>.
Point is that 94% so demand is certainly there for.
For our product.
I do want to say.
Demand that will begin in my mind with prices being where they are demand destruction. However, I think that the loss of.
These are 4 million barrels of refining capacity as well as the things that are happening in Russia.
More than offset the demand disruption.
And presumably you're still seeing strong demand through you through your system.
That is correct.
Just finally from me, we will see year over year on a climate, which same store comp.
Paul It's up <unk>, 8%, if you look at the retail footprint on a same store sales basis.
Thanks, guys.
Rob.
Our next question comes from Paul Cheng with Scotiabank. Please go ahead.
Hey, guys good afternoon.
Mr. Chen will give me a hard time.
None of them, leaving.
Is that just wish you have a wonderful time in retirement.
Beyond to actually fully repaid so.
And so what that means.
See you again some form.
That's also that wish you'd be able to spend a lot more time.
Families that way so that.
Certainly David.
Certainly there is somebody over there waiting for me.
Yes.
And on that.
Several questions.
In the.
First Pat I mean, do you guys expect to have any.
<unk> came to be received in the second quarter.
Hey, Paul It's Blake.
We are expecting some additional proceeds to come in I think you probably noticed that in the <unk>. We have just under $10 million of business interruption that is adjusted out of the result.
The other income line item.
The bulk of what we expect to continue coming in we will also be business interruption treated the same way.
I see.
And that just <unk> is that once that now everything is vital.
One of your competitors CVR they trip.
<unk> passed that special item.
Do you guys intend to do that and so with that exclude Diana just going forward or that this is going to be pent up there.
Lending.
All the the approach we're taking is that it will not be adjusted out.
Our SEC group's opinion as it is.
We should not be stripping that out of our adjusted results and so going forward, our communication with yourself and your peers is largely going to be around what adjusted EBITDA is going to be that will be inclusive of movements in the other inventory so that will swing up and down but on a full year basis that will even out so on a full year basis.
The number should look fairly fairly comparable with peers.
And final question, you say Jim.
Importantly.
We have presented.
And is that the last several years.
Sure.
And then the focus to the.
So the midstream and so retail yes.
You just continue to run with and at some point with the projects group.
Trying to exit or want that this would be considered that part of the longer term coal quoting.
As you know Paul when you look to the back half Mapco.
We are going to continue to invest in retail, but if the opportunity comes then for sure.
Something that.
I'm sure the new management will look.
And.
Say to them, so am I getting the multiples and the return from retail as you know building a store Corp.
Well, it's a $6 million.
Conservative EBITDA for that store is one to one.
Midland <unk> five times.
There's not a lot of projects that you can do that especially with the free.
Free cash flow that is coming our way but.
The same time, if we can get.
Not multiple and it makes sense for somebody else to take it then for sure we will look at that.
Yes, I think <unk> been saying that for some time, but do you think that.
Southern critical mass before you would consider a sale.
Thank you.
Sufficient critical mass for Ya.
Well, if you remember Mapco we had.
35 ntis.
The forecast if you will.
<unk> as I said generated $1 2 million, so youre talking about another $40 million.
<unk> $45 million of EBITDA.
On top of the 50 that we have right now. So if you are approaching $100 million than you probably you have a great chain.
That you can.
Monetize if you decide to do so.
Thank you and congratulation then with your debt.
The most fun retirement.
Thank you thanks, so much.
Our next question comes from Phil Gresh with J P. Morgan. Please go ahead.
Hey, guys. This is actually John .
Are you.
So just had a quick one on the balance sheet.
You should be generating a lot of cash going into the period.
Coming out of refining but.
It sounds like returns of capital or looking into that.
Do you have an outflow coming up to the acquisition.
What are your current thoughts around leverage targets on a consolidated basis, and then related we have a minimum cash balance that you guys think thats operate the business.
So that's a great question, if you look up.
<unk>.
Midstream, obviously delivered will go up now because we're going to find.
Of the three deals are mainly through debt.
But long term, we always said.
Between three and three in alpine.
Our time.
On the midstream.
Midstream side makes sense and then if you look at the Standalone.
The other business, if you will a refining retail and renewable.
We don't want to be more than one time on that obviously with the EBITDA.
We will be.
Something lower than that so we are pretty comfortable where we are we used to have.
A target of $1 billion, we are now at 850 and so.
So we will shore up the balance sheet.
We see that.
Honestly with the amount of cash that is being generated.
We can do several things.
Sure up the balance sheet, making sure that we have money for.
Investment and at the same time, returning cash to shareholders.
Okay.
Okay. Thanks, and is there a minimum cash balance you guys operate the business.
We used the thing thats been a good number and the other thing that we change that much.
Okay, Great and then just a quick follow up I don't think you guys have gotten much into Midland differentials on this call. So.
It will be great. If you could just give some color around your updated expectations. There in your view of Permian production growth.
I guess over the gas.
I'll, let Bob take that one.
Sure John .
As I'm sure you're aware the Midland differentials have been bouncing around kind of.
At 50 premium to about $1 50 premium right now theyre pretty much somewhere right in the middle of that at a dollar.
We go out the curve.
Because of exactly what you just mentioned the fact that we see incredible growth in the Permian, especially around our Midland gathering system.
We see that differential between Midland and the coastal markets widening out significantly.
In addition to that Brent Ti is also fairly wide on a recent history basis in the backs of the curve cell.
A $5 differential so we feel good about where we're at we feel good that as he said earlier differentials will continue to erode that's a big tailwind for the refining system and then in addition to that with the incremental growth that we're seeing that's a big tailwind for the detail piece of the business as we start to load into.
Wink to Webster and also just on the on the Delek Permian gathering system. So.
Do you have any follow ups, we can go deeper, but I think that covers it.
That's great. Thank you.
Okay.
Our next question comes from Jason <unk> with Cowen. Please go ahead.
Hey, thanks.
Just wanted to echo the comments that others have made some great listening to your commentary over the years.
I wish you all the best moving forward.
The first.
Yes, the first.
Question I have is on this three there.
Acquisition and I was wondering if you could discuss some of the benefits if there are any.
That the acquisition brings massively MLP, but to C Corp from an operational synergy standpoint, and then kind of more broadly if there is the ability to deploy additional capital in.
Midstream and the three bear.
Acquisition, given theres going to be robust cash flow generation.
Thanks.
You often actually three questions, Jason So I'll try to answer we will try to answer them.
In the sequence that you asked.
Yes.
Getting into <unk>, we felt that that's the right timing, we actually have been working on.
A couple of opportunities in that area and the moment, we felt that the market is changing that was the time that we put the trigger similar to what's happened with the with the icon group.
<unk> been working with them for a while and.
When we thought that the time was why we pulled the trigger to buy those shares I hope they are happy as much as we are so the timing is because of what is the things that are happening in the activity in the Permian, we felt that we need to complement what the TPG.
System that we have with another Delaware system, if you will.
One thing the second thing is obviously.
The timing is.
With everything that is happening in the Permian.
We hope the producer will continue to.
Two.
And accelerate that.
Got into this business because it has.
Two other areas of interest in natural gas and water and we feel that.
Natural gas would be a constraint in the in the Permian and also.
We are with the lack of water in the Permian.
We're going to move.
As an industry from.
First of all to produce work, which we've been know how to do very well.
We'll open up the opportunity for us to lend up to.
Two lines of business not explicitly not too expensive entry point and maybe to apply it to the CPG into the existing producers that we have.
Got it great.
Really helpful.
My second question is just on the SPR.
At lease end.
I'm wondering if you've seen any movement in the Brent Ti differentials or maybe more.
More broadly.
A result of that.
SPR release, and if you are able to access and benefit from those balance. Thanks.
Hey, Jason it's Todd.
Dress that one and then Susie has any other comments he can he can jump in on the backend.
The most recent SPR portion of the release was about 30 million barrels $27 million of it ish was sour.
$3 million to $4 million of it with suites.
Those barrels cleared it quite expensive differentials relative to the benchmarks that theyre marked against the suites mark against the MGH.
So the government clearly looking at.
Export type barrel, we saw quite a bit of volume actually loaded across the dock.
So for US we were involved in the process.
But those barrels look relatively expensive to us the benefit that we see is the fact that as those barrels come out of the STR we have seen.
I'd see a couple of weeks after the fact, when they started hitting the market that Brent Ti spread widening out.
Cushing differentials come off both of those are tailwind for the business and in addition to that.
We also saw the differentials come off which I think is.
By and large a product of the fact that a number of those barrels out of the SPR release went offshore and satisfy some of that demand and that left some of the inland barrels hunting for for home. So again that was extremely advantageous for us.
That was our view so that's how we expressed ourselves in the market.
Great. Thanks.
This concludes our question and answer session I would like to turn the conference back over to <unk> Amin for any closing remarks.
Well I'd like to thank Mike.
Colleagues around the table with the new nominations of.
We've also Rick.
Are you CEO Miley as our COO and president of refining I think we have a very experienced and very capable.
Our management team.
I know all of them for many many years and I believe that.
They will do excellent job for our company.
Also I'd like to think.
You investors and believing in us the analyst Braskem question the board of directors obviously.
Sticking with us during the downturn, but mainly in mostly I'd like to thank each one of the.
Of the employees of this great company will makes it what it is.
Thank you have a great day.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.