Q4 2025 Par Pacific Holdings Inc Earnings Call

February 25, 2026

Speaker #2: After today's presentation, there will be an opportunity to ask questions, to ask a question you may press *1 on your telephone keypad. To withdraw your question, please press *2.

Speaker #2: Please note this event is being recorded. I would now like to turn the conference over to Ashimi Patel, Vice President of Investor Relations, please go ahead.

Speaker #2: Thank you, Drew. Welcome to PAR PACIFIC's 4th Quarter Earnings Conference Call. Joining me today are Will Monteleone, President and Chief Executive Officer; Richard Creamer, EVP of Refining and Logistics; and Shawn Flores, SVP and Chief Financial Officer.

Ashimi Patel: Thank you, Drew. Welcome to Par Pacific's Q4 earnings conference call. Joining me today are William Monteleone, President and Chief Executive Officer, Richard Creamer, EVP of Refining and Logistics, and Shawn Flores, SVP and Chief Financial Officer. Before we begin, note that our comments today may include forward-looking statements. Any forward-looking statements are subject to change and are not guarantees of future performance or events. They are subject to risks and uncertainties, and actual results may differ materially from these forward-looking statements. Accordingly, investors should not place undue reliance on forward-looking statements, and we disclaim any obligation to update or revise them. I refer you to our investor presentation on our website and to our filings with the SEC for non-GAAP reconciliations and additional information. I'll now turn the call over to our President and Chief Executive Officer, William Monteleone.

Speaker #2: Before we begin, note that our comments today may include forward-looking statements. Any forward-looking statements are subject to change and are not guarantees of future performance or events.

Speaker #2: They are subject to risks and uncertainties in actual results may differ materially from these forward-looking statements. Accordingly, investors should not place undue reliance on forward-looking statements and we disclaim any obligation to update or revise them.

Speaker #2: I refer you to our investor presentation on our website and to our filings with the SEC for non-GAAP reconciliations and additional information. I'll now turn the call over to our President and Chief Executive Officer, Will Monteleone.

Speaker #3: Thank you, Ashimi, and good morning, everyone. 2025 was a year of meaningful progress. We navigated challenges, advanced key strategic initiatives, and generated substantial profits along the way.

William Monteleone: Thank you, Ashimi, and good morning, everyone. 2025 was a year of meaningful progress. We navigated challenges, advanced key strategic initiatives, and generated substantial profits along the way. Full year Adjusted EBITDA was $634 million, and Adjusted Net Income was $7.56 per share. 2025 represents an excellent year for the enterprise and further validates the structural improvements we've made to the business. At the beginning of 2025, we laid out clear priorities for the year. One, execute major turnaround activity safely and on schedule. Two, minimize the impact from the Wyoming crude heater event. Three, advance and start up our Hawaii renewables unit. Four, deliver on our cost reduction commitments. Despite a volatile refining backdrop, we've largely achieved those objectives.

Speaker #3: Full year adjusted EBITDA was $634 million, and adjusted net income was $7.56 per share. 2025 represents an excellent year for the enterprise, and further validates the structural improvements we've made to the business.

Speaker #3: At the beginning of 2025, we laid out clear priorities for the year. One, execute major turnaround activity, y, safely and on schedule. Two, minimize the impact from the Wyoming crude heater event.

Speaker #3: Three, advance and start up our Hawaii Renewables unit. And four, deliver on our cost reduction commitments. Despite a volatile refining backdrop, we largely achieved those objectives.

Speaker #3: We executed the Montana turnaround work safely and effectively. Restored Wyoming to reliable operations. Advanced the Hawaii Renewables project into commissioning. While forming a joint venture with world-class partners at an attractive valuation, and strengthened our cost structure.

William Monteleone: We executed the Montana turnaround work safely and effectively, restored Wyoming to reliable operations, advanced the Hawaii Renewables project into commissioning, while forming a joint venture with world-class partners at an attractive valuation, and strengthened our cost structure. While no year is without challenges, the consistency of our execution reinforces our organization's commitment to excellence. In our business, financial success starts with operational reliability, and safety. Overall, we made strong progress during the year, achieving record annual refining throughput. However, the Wyoming event was a reminder to the organization that we are never finished when it comes to safely and reliably operating our facilities. One notable operational success was the sustained improvement in Hawaii throughput rates following several years of focused effort by the team. Hawaii throughput averaged 84,000 barrels per day, approximately 4% above the prior three-year average, reflecting sustained operational improvement by the team.

Speaker #3: While no year is without challenges, the consistency of our execution reinforces our organization's commitment to excellence. In our business, financial success starts with operational reliability and safety.

Speaker #3: Overall, we made strong progress during the year, achieving record annual refining throughput. However, the Wyoming event was a reminder to the organization that we are never finished when it comes to safely and reliably operating our facilities.

Speaker #3: One notable operational success was the sustained improvement in the Hawaii throughput rates, following several years of focused effort by the team. Hawaii throughput averaged 84,000 barrels per day, approximately 4% above the prior three-year average.

Speaker #3: Reflecting sustained operational improvement by the team. The logistics organization progressed key initiatives throughout the year and generated record segment profits. And retail once again delivered growing results setting new financial records in 2025.

William Monteleone: The logistics organization progressed key initiatives throughout the year and generated record segment profits. Retail once again delivered growing results, setting new financial records in 2025. Full year Adjusted EBITDA increased approximately 13% versus 2024. In 2025, same-store fuel and in-store sales grew approximately 1.6% and 1.5%, respectively, reflecting continued traction in merchandising initiatives and food programs. In Hawaii, the renewable fuels project has progressed into commissioning and early start-up phases during Q4. We prioritized the readiness of the pretreatment unit and have successfully achieved on-specification feedstock with a range of inputs. We are in the final phases of operational readiness and expect to introduce post-treated feedstocks into the renewables unit in the next few weeks. While timing has extended modestly beyond original expectations, there have been no material operational issues.

Speaker #3: Full year adjusted EBITDA increased approximately 13% versus 2024. 2025 same-store fuel and in-store sales grew approximately 1.6 and 1.5% respectively. Reflecting continued traction and merchandising initiatives and food programs.

Speaker #3: In Hawaii, the renewable fuels project is progressed into commissioning and early startup phases during the 4th quarter. We prioritized the readiness of the pre-treatment unit and have successfully achieved on-specification feedstock with a range of inputs.

Speaker #3: We are in the final phases of operational readiness and expect to introduce post-treated feedstocks into the renewables unit in the next few weeks. While timing has extended modestly beyond original expectations, there have been no material operational issues.

Speaker #3: Our focus remains on safe startup, operational stability, and optimization towards steady state performance. We are constructive on the medium-term economic outlook as the policy backdrop continues to improve.

William Monteleone: Our focus remains on safe startup, operational stability, and optimization towards steady-state performance. We are constructive on the medium-term economic outlook as the policy backdrop continues to improve. A significant highlight for the year was the strengthening of our balance sheet. During Q4, we received proceeds from the Hawaii Renewables joint venture and began monetizing excess RIN inventory. Combined with solid underlying cash generation, these actions materially improved liquidity. We ended the year with approximately $915 million in liquidity and 49.7 million shares outstanding, improving liquidity by 49% and reducing our share count by 10%, while completing key growth and reliability projects. A stronger balance sheet provides flexibility to invest through cycles, execute high return internal projects, and opportunistically repurchase shares when appropriate.

Speaker #3: A significant highlight for the year was the strengthening of our balance sheet. During the 4th quarter, we received proceeds from the Hawaii Renewables joint venture and began monetizing excess rent inventory.

Speaker #3: Combined with solid underlying cash generation, these actions materially improved liquidity. We ended the year with approximately $915 million in liquidity and 49.7 million shares outstanding, improving liquidity by 49% and reducing our share count by 10%, while completing key growth and reliability projects.

Speaker #3: A stronger balance sheet provides flexibility to invest through cycles, execute high-return internal projects, and opportunistically repurchase shares when appropriate. We entered 2026 positioned to continue expanding the earnings power of the business and driving long-term shareholder value.

William Monteleone: We enter 2026 positioned to continue expanding the earnings power of the business and driving long-term shareholder value. Refining markets are cyclical, and our strategy is not to predict short-term movements, but to structurally improve our position within the cycle, increasing distillate yield, enhancing logistics integration, improving capture rates, and lowering our cost structure. Over time, these efforts expand our mid-cycle earnings profile and strengthen durability. Our priorities for the year are clear and consistent with our long-term strategy. 1, improve the mid-cycle earnings contribution of our Rocky Mountain assets through targeted high return projects that enhance flexibility and capture. 2, execute the Hawaii turnaround safely and on schedule. 3, successfully start up and optimize the renewable fuels unit. 4, maintain disciplined and opportunistic capital allocation. I'll now turn the call over to Richard to discuss refining logistics operations.

Speaker #3: Refining markets are cyclical, and our strategy is not to predict short-term movements, but to structurally improve our position within the cycle. Increasing distillate yield, enhancing logistics integration, improving capture rates, and lowering our cost structure.

Speaker #3: Over time, these efforts expand our mid-cycle earnings profile, and strengthen durability. Our priorities for the year are clear and consistent with our long-term strategy.

Speaker #3: One, improve the mid-cycle earnings contribution of our Rocky Mountain assets through targeted high-return projects that enhance flexibility and capture. Two, execute the Hawaii turnaround safely and on schedule.

Speaker #3: Three, successfully start up and optimize the renewable fuels unit, and four, maintain disciplined and opportunistic capital allocation. I'll now turn the call over to Richard to discuss refining logistics operations.

Speaker #4: Thank you, Will. 2025 reflected significant operational progress and improvement across refining and logistics business. Reliability is a cornerstone to success, and last year's performance is representative of that.

Richard Creamer: Thank you, Will. 2025 reflected significant operational progress and improvement across refining and logistics business. Reliability is a cornerstone to success, and last year's performance is representative of that. We were challenged early in the year by the heater outage in Wyoming, and the team there delivered an exceptional recovery. Throughout the year, we executed disciplined operating and capital spending across the system. The refining and logistics team delivered another record throughput year of 188,000 barrels per day, led by Hawaii's increased production rates. I want to commend the Montana team for the execution of their largest-ever turnaround. Following this event, we reported record quarterly throughput of 58,000 barrels per day, demonstrating the site's potential. We continue to see the benefits of our reliability investments, and the team has made great strides in improving OpEx per barrel.

Speaker #4: We were challenged early in the year by the heater outage in Wyoming, and the team there delivered an exceptional recovery. Throughout the year, we executed disciplined operating and capital spending across the system.

Speaker #4: The refining and logistics team delivered another record throughput year of 188,000 barrels per day, led by Hawaii's increased production rates. I want to commend the Montana team for the execution of their largest-ever turnaround, following this event, we reported record quarterly throughput of 58,000 barrels per day, demonstrating the site's potential.

Speaker #4: We continue to see the benefits of our reliability investments and the team has made great strides in improving OPEX per barrel. I'd like to recognize the Wyoming team for safely restoring operations after the Q1 crude heater incident more than one month of head of schedule.

Richard Creamer: I'd like to recognize Wyoming team for safely restoring operations after the Q1 crude heater incident, more than one month ahead of schedule. Shifting to quarterly results, Q4 combined throughput was 191,000 barrels per day. In Hawaii, throughput was strong at 87,000 barrels per day. This represents Hawaii's efforts to deliver at maximum capacity through the team's focus on high reliability operations. Production costs were $4.15 per barrel. Washington throughput was 37,000 barrels per day, reflecting reduced rates ahead of the Q1 planned downtime, and production costs were $4.57 per barrel. Maintenance activities are now complete, and the plant restart is underway.

Speaker #4: Shifting to quarterly results, 4th quarter combined throughput was 191,000 barrels per day. In Hawaii, throughput was strong at 87,000 barrels per day. This represents Hawaii's efforts to deliver at maximum capacity through the team's focus on high reliability operations.

Speaker #4: Production costs were $4.15 per barrel. Washington throughput was 37,000 barrels per day, reflecting reduced rates ahead of the 1st quarter planned downtime, and production costs were $4.57 per barrel.

Speaker #4: Maintenance activities are now complete and the plant restart is underway. Shifting to Wyoming, throughput was 14,000 barrels per day and production costs were elevated at $13.27 per barrel, due to a third-party power outage in Northern Wyoming and lower seasonal throughput.

Richard Creamer: Shifting to Wyoming, throughput was 14,000 barrels per day, and production costs were elevated at $13.27 per barrel due to a third-party power outage in northern Wyoming and lower seasonal throughput. Finally, in Montana, Q4 throughput was 52,000 barrels per day, and production costs were $11.74 per barrel, elevated by approximately $1.50 per barrel due to coker maintenance. Looking ahead to the Q1, we expect Hawaii throughput between 85,000 and 89,000 barrels per day, and Washington between 24,000 and 28,000 barrels per day, reflecting the Q1 planned outage. Wyoming is expected to operate between 13,000 and 16,000 barrels per day, with Montana between 52,000 and 56,000 barrels per day, both reflective of Q1 seasonality. This results in a system-wide anticipated midpoint throughput of 182,000 barrels per day.

Speaker #4: Finally, in Montana, 4th quarter throughput was 52,000 barrels per day and production costs were $11.74 per barrel, elevated by approximately $1.50 per barrel due to Kocher maintenance.

Speaker #4: Looking ahead to the 1st quarter, we expect Hawaii throughput between 85 and 89 thousand barrels per day, and Washington between 24 and 28 thousand barrels per day, reflecting the Q1 planned outage.

Speaker #4: Wyoming is expected to operate between 13 and 16 thousand barrels per day, with Montana between 52 and 56 thousand barrels per day, both reflective of Q1 seasonality.

Speaker #4: This results in a system-wide anticipated midpoint throughput of 182,000 over to Shawn to cover our financial results.

Richard Creamer: I'll now turn the call over to Sean to cover our financial results.

Speaker #5: Thank you, Richard. Fourth quarter adjusted EBITDA was $113 million, and adjusted net income was $60 million, or $1.17 per share. For the full year, adjusted EBITDA was $634 million, and adjusted net income was $390 million, or $7.56 per share.

Shawn Flores: Thank you, Richard. Q4 Adjusted EBITDA was $113 million, and Adjusted Net Income was $60 million, or $1.17 per share. For the full year, Adjusted EBITDA was $634 million, and Adjusted Net Income was $390 million, or $7.56 per share. The refining segment generated $88 million of Adjusted EBITDA in Q4, compared to $135 million in Q3, excluding the SRE impact. Our combined refining index averaged $13.13 per barrel in Q4, down approximately $1.60 from the prior quarter, reflecting seasonal conditions in the Rockies and the Pacific Northwest. System-wide refining capture was 93% for the quarter and 94% for the full year.

Speaker #5: The refining segment generated 88 million of adjusted, but on the 4th quarter, compared to 135 million in the 3rd quarter, excluding the SRE impact.

Speaker #5: Our combined refining index averaged 13.13 per barrel in the 4th quarter, down approximately $1.60 from the prior quarter, reflecting seasonal conditions in the Rockies and the Pacific Northwest.

Speaker #5: System-wide refining capture was 93% for the quarter, and 94% for the full year. In Hawaii, the Singapore 312 averaged 21.43 per barrel during the 4th quarter, and our landed crude differential was $6.05.

Shawn Flores: In Hawaii, the Singapore 3-1-2 averaged $21.43 per barrel during the Q4, and our landed crude differential was $6.05, resulting in a Hawaii index of $15.38 per barrel. Hawaii capture was 104%, including a net $7 million loss from product crack hedging and price lag. Excluding these items, Hawaii capture was 110%. In Montana, the Q4 index averaged $11.14 per barrel, with margin capture of 72%. Capture was impacted by elevated asphalt sales and a lighter, higher cross crude slate due to coker downtime, reducing margins by approximately $10 million. Montana production costs include approximately $7 million related to coker maintenance. In Wyoming, the Q4 index averaged $18.31 per barrel.

Speaker #5: Resulting in a Hawaii index of 15.38 per barrel. Hawaii capture was 104%, including a net $7 million loss from product crack hedging and price lag.

Speaker #5: Excluding these items, Hawaii capture was 110%. In Montana, the 4th quarter index averaged $11.14 per barrel, with margin capture of 72%. Capture was impacted by elevated asphalt sales, and a lighter, higher cross crude slate due to Kocher downtime, reducing margins by approximately $10 million.

Speaker #5: Montana production costs included approximately $7 million related to Kocher maintenance. In Wyoming, the fourth quarter index averaged $18.31 per barrel. Normalized capture was approximately 70%, excluding a $3,500,000 impact from declining crude prices.

Shawn Flores: Normalized capture was approximately 70%, excluding a $3 million FIFO impact from declining crude prices. As Richard mentioned, a regional power outage and subsequent maintenance activities reduced throughput and impacted both margins and production costs during the quarter. Lower diesel sales during the downtime impacted margins by approximately $4 million, while maintenance-related activity increased operating costs by $3 million. In Washington, our index averaged $8.60 per barrel. Margin capture was 97%, reflecting a normalization of jet-to-diesel spreads and favorable sales mix during the Olympic Pipeline outage in November. Looking to Q1, our combined refining index has averaged approximately $6.70 per barrel quarter to date, with February month to date improving by $2 per barrel versus January.

Speaker #5: As Richard mentioned, a regional power outage and subsequent maintenance activities reduced throughput and impacted both margins and production costs during the quarter. Lower diesel sales during the downtime impacted margins by approximately $4 million, while maintenance-related activity increased operating costs by $3 million.

Speaker #5: In Washington, our index averaged $8.60 per barrel, margin capture was 97%, reflecting a normalization of jet-to-diesel spreads in favorable sales mix during the Olympic pipeline outage in November.

Speaker #5: Looking to the 1st quarter, our combined refining index has averaged approximately $6.70 per barrel quarter to date, with February month to date improving by $2 per barrel versus January.

Speaker #5: In both the Rockies and the Pacific Northwest, prompt distillate margins have strengthened by roughly $15 per barrel compared to January averages. On the West Coast, tighter jet balances have driven jet fuel to trade at a premium to diesel, supporting margin capture in Washington.

Shawn Flores: In both the Rockies and the Pacific Northwest, prompt distillate margins have strengthened by roughly $15 per barrel compared to January averages. On the West Coast, tighter jet balances have driven jet fuel to trade at a premium to diesel, supporting margin capture in Washington. In Hawaii, Singapore distillate cracks remain firm. We expect our Q1 crude differential to be in the range of $4.75 and $5.25 per barrel, reflecting easing backwardation and favorable access to waterborne crude supply. Moving to the logistics segment, Adjusted EBITDA was $30 million in Q4, compared to $37 million in Q3. Full-year logistics Adjusted EBITDA reached a record $126 million, reflecting strong system utilization and a $6 million reduction in annual costs. Retail delivered $22 million of Adjusted EBITDA in Q4, in line with Q3.

Speaker #5: In Hawaii, Singapore distillate cracks remain firm, and we expect our 1st quarter crude differential to be in the range of $4.75 and $5.25 per barrel, reflecting easing backwardation in favorable access to waterborne crude supply.

Speaker #5: Moving to the logistics segment, adjusted EBITDA was $30 million in the fourth quarter compared to $37 million in the third quarter. Full-year logistics adjusted EBITDA reached a record $126 million, reflecting strong system utilization and a $6 million reduction in annual costs.

Speaker #5: Retail delivered $22 million of adjusted, but on the 4th quarter, in line with the 3rd quarter, for the full year, retail achieved a record $86 million in adjusted, but I up from $76 million in 2024, driven by favorable fuel and inside store margins and a $4 million reduction in operating costs.

Shawn Flores: For the full year, retail achieved a record $86 million in Adjusted EBITDA, up from $76 million in 2024, driven by favorable fuel and inside store margins, and a $4 million reduction in operating costs. Turning to cash flow, full year cash from operations was $568 million, excluding working capital outflows of $21 million and deferred turnaround costs of $101 million. Cash from ops in Q4 was $134 million, excluding working capital outflows of $40 million and deferred turnaround costs of $1 million. Q4 working capital outflows were primarily related to prepaid annual insurance premiums and trade credit timing in Hawaii, partially offset by RIN proceeds. At year-end, we had monetized less than half of the SRE-related excess RIN inventory, providing favorable working capital visibility into 2026.

Speaker #5: Turning to cash flow, full-year cash from operations was $568 million, excluding working capital outflows of $21 million, and deferred turnaround costs of $101 million.

Speaker #5: Cash from ops in the 4th quarter was $134 million, excluding working capital outflows of $40 million, and deferred turnaround costs of $1 million. Q4 working capital outflows were primarily related to prepaid annual insurance premiums and trade credit timing in Hawaii, partially offset by REN proceeds.

Speaker #5: At year-end, we had monetized less than half of the SRE-related excess REN inventory, providing favorable working capital visibility into 2026. Full-year crude capex, including deferred turnaround costs, totaled approximately $246 million, or $6 million above our prior guidance.

Shawn Flores: Full-year accrued CapEx, including deferred turnaround costs, totaled approximately $246 million, or $6 million above our prior guidance. Cash used in financing activities totaled $64 million, driven by an ABL paydown of $163 million, share repurchases of $28 million, partially offset by $100 million in proceeds from the Hawaii Renewables joint venture. For the full year, we repurchased 6.5 million shares, reducing shares outstanding by 10%, while lowering gross debt by $310 million. Total liquidity was a record $915 million at year-end. Gross term debt was approximately $640 million, positioning us at the low end of our leverage targets. During the quarter, we re-repriced our existing term loan, reducing the spread by 50 basis points and lowering our annual cash interest by over $3 million.

Speaker #5: Cash used in financing activities totaled $64 million, driven by an ABL paydown of $163 million, share repurchases of $28 million, partially offset by $100 million in proceeds from the Hawaii Renewables joint venture.

Speaker #5: For the full year, we repurchased 6.5 million shares, reducing shares outstanding by 10%, while lowering gross debt by $310 million. Total liquidity was a record $915 million at year-end. Gross term debt was approximately $640 million, positioning us at the low end of our leverage targets.

Speaker #5: During the quarter, we repriced our existing term loan, reducing the spread by 50 basis points and lowering our annual cash interest by over $3 million.

Speaker #5: With improving market conditions and reduced capital requirements, we are entering 2026 from a position of financial strength, with the flexibility to invest in growth, maintain a strong balance sheet, and opportunistically repurchase shares.

Shawn Flores: With improving market conditions and reduced capital requirements, we are entering 2026 from a position of financial strength, with the flexibility to invest in growth, maintain a strong balance sheet, and opportunistically repurchase shares. This concludes our prepared remarks. Operator, we'll turn it back to you for Q&A.

Speaker #5: This concludes our prepared remarks, Operator. We'll turn it back to you for Q&A.

Speaker #1: We will now begin the question and answer session. To ask a question, you may press * than 1 on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys.

Operator: We will now begin the question-and-answer session. To ask a question, you may press Star, then 1 on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press Star, then 2. At this time, we will pause momentarily to assemble our roster. The first question comes from Alexa Petrick with Goldman Sachs. Please go ahead.

Speaker #1: If at any time your question has been addressed, and you would like to withdraw your question, please press * than 2. At this time, we will pause momentarily to assemble our roster.

Speaker #1: The first question comes from Alexa Petric with Goldman Sachs. Please go ahead.

Speaker #4: Hey, good morning, team, and thanks for taking our question. I wanted to start on capital allocation. You talked about starting to monetize the excess REN Bank.

Alexa Petrick: Hey, good morning, team, and thanks for taking our question. I wanted to start on capital allocation. You talked about starting to monetize the excess RIN bank. How should we expect that cash to be used? How are you thinking about share repurchases, particularly with the stock at these levels?

Speaker #4: How should we expect that cash to be used, and then how are you thinking about share repurchases, particularly with the stock at these levels?

Speaker #3: Sure. Good morning, Alexa. Yeah, I think our capital allocation framework remains consistent with how we've approached it in the past. I think we are looking at a mix of both the opportunity to repurchase our shares, as well as internal growth opportunities and even potentially external opportunities.

William Monteleone: Sure. Good morning, Alexa. Yeah, I think our capital allocation framework remains consistent with how we've approached it in the past. I think we are looking at, you know, a mix of both the opportunity to repurchase our shares, as well as internal growth opportunities and even potentially external opportunities. I think if you look at our past, you'll see that we've used really all of the above, when appropriate, to try and generate shareholder returns, and I think we'll continue to deploy a dynamic approach to that. Given our strong excess capital position, we have a lot of flexibility.

Speaker #3: So I think if you look at our past, you'll see that we've used really all the above when appropriate to try and generate shareholder returns and I think we'll continue to deploy a dynamic approach to that given our strong excess capital position.

Speaker #3: We have a lot of flexibility.

Speaker #4: Okay, that's helpful. And then maybe just to follow up, can you talk a little about Q4 on captures? I think Rockies was a little softer than maybe what we think about mid-cycle captures.

Alexa Petrick: Okay, that's helpful. Maybe just a follow-up. Can you talk a little about Q4 on captures? I think Rockies was a little softer than maybe what we think about mid-cycle captures. Can you kind of walk us through some of the moving pieces there, how Q1 is shaping up so far?

Speaker #4: Can you kind of walk us through some of the moving pieces there and then how one Q is shaping up so far?

Speaker #3: Hey, Alexa. Shawn. Yeah, I think in my prepared remarks, I touched on the softness that we saw in the Rockies and Montana. We had 72% capture, relative to our sort of annual guidance of 90 to 100%.

Shawn Flores: Hey, Alexa, it's Shawn. Yeah, I think, you know, in my prepared remarks, I touched on the softness that we saw in the Rockies. In Montana, we had 72% capture relative to our sort of annual guidance of 90% to 100%. You know, I think it's really driven by the coker downtime. We lined up our crude slate while the coker was offline, and it also results in incremental asphalt sales. We estimate about a $10 million margin impact. That translates to about 19% capture. I think when you normalize for that, you're back within sort of that 90% to 100% range. I think a similar story in Wyoming.

Speaker #3: And I think it's really driven by the Coker downtime. We lightened up our crude slate while the Coker was offline, and it also results in incremental asphalt sales and we estimate about a $10 million margin impact.

Speaker #3: That translates to about 19% capture. So I think when you normalize for that, you're back within sort of that 90 to 100% range. And then I think a similar story in Wyoming.

Shawn Flores: We, you know, as Richard referenced, we had the regional power outage that impacted most of the state for a few days and led to a multiple-week downtime. Ultimately, I think it impacted diesel sales.

Speaker #3: As Richard referenced, we had the regional power outage that impacted most of the state for a few days, and led to a multiple-week downtime.

Speaker #3: And ultimately, I think it impacted diesel sales which was about $4 million and I think adjusting for that margin loss Wyoming capture would have been in the high 80s.

William Monteleone: which was about $4 million. I think adjusting for that margin loss, Wyoming capture would have been in the high 80s. I think that the story is as simple as that.

Speaker #3: So, I think that the story is as simple as that.

Speaker #4: Thank you, guys. That's helpful. I'll turn it back.

Operator: Thank you, guys. That's helpful. I'll turn it back. The next question comes from Matthew Blair with Tudor, Pickering Holt. Please go ahead.

Speaker #1: The next question comes from Matthew Blair with Tudor Pickering Holt. Please go ahead.

Speaker #3: Great. Thank you. And good morning, everyone. Will, maybe to just follow up on your comment there about looking at external growth opportunities, could you talk a little bit more about what opportunities that might be?

Matthew Blair: Great. Thank you. Good morning, everyone. You know, Will, maybe to just follow up on your comment there about looking at external growth opportunities. Could you talk a little bit more about what opportunities that might be? Would that include, you know, retail integration, additional retail integration, or are you also open to refinery acquisitions or even corporate acquisitions?

Speaker #3: Would that include retail integration, additional retail integration, or are you also open to refinery acquisitions or even corporate acquisitions?

Speaker #5: Yeah, Matthew. Happy to talk a little bit more about it. I think the best way to think about our framework is probably to look at our track record.

William Monteleone: Yeah, Matthew, happy to talk a little bit more about it. You know, I think the best way to think about our framework is probably to look at our track record, and to think about how we've operated in the past is a pretty good indicator of, you know, how we'll approach the future. I think, you know, from our perspective, you know, I think we are focused on growing the scale of the business when it's accretive. Again, I think we're trying to find opportunities that are synergistic with our existing portfolio, where we can really generate an edge. That's our focus. I think we hold, you know, two things to be true at the same time.

Speaker #5: And to think about how we've operated in the past is a pretty good indicator of how we'll approach the future. And so, I think from our perspective, we are focused on growing the scale of the business when it's accretive.

Speaker #5: And again, I think we're trying to find opportunities that are synergistic with our existing portfolio, where we can really generate an edge. And so that's our focus.

Speaker #5: And I think we hold two things to be true at the same time. I mean, if you look at our history, we've grown this business through M&A.

William Monteleone: I mean, if you look at our history, we've grown this business through M&A, but I think we also fully understand that if you pursue growth at any price, you can destroy shareholder value very quickly. Being disciplined is important. You know, I think what we found on the retail side is generally we can be competitive in small acquisitions, you know, one to five store, and then, we can be competitive on, you know, new builds, and generate real returns in that area. Given the current market, you know, larger scale M&A in retail, is less likely and more challenging given our competitors' cost of capital versus our own.

Speaker #5: But I think we also fully understand that if you pursue growth at any price, you can destroy shareholder value very quickly. So being disciplined is important.

Speaker #5: And I think what we found on the retail side is generally we can be competitive and small acquisitions. One to five store and then we can be competitive on new builds.

Speaker #5: And generate real returns in that area. Given the current market, larger scale M&A and retail, is less likely. And more challenging given our competitors' cost of capital versus our own.

Speaker #3: Sounds good. And then, Will, you also mentioned the cash coming in from the REN sales. Do you have any update on potentially monetizing the Hawaii land, the excess land out there?

Matthew Blair: Sounds good. Will, you also mentioned the cash coming in from the RIN sales. Do you have any update on potentially monetizing the Hawaii land, the excess land out there, or potentially monetizing the Laramie EMP investment? Thank you.

Speaker #3: Or, potentially, monetizing the Laramie E&P investment? Thank you.

Speaker #5: Sure. So on the land position in Hawaii, we're continuing to progress the redevelopment of that. And again, I think we're nearing completing getting the equipment to grade.

William Monteleone: Sure. On the land position in Hawaii, we're continuing to progress the redevelopment of that. Again, I think are nearing, completing, getting the equipment to grade and are again, working through the process to rehabilitate that and get it back into I'll say, into commerce. I wouldn't plan on that being an immediate benefit. I think this is a long-term project for us that's gonna take us several years, but I do think it's an attractive asset. With respect to Laramie, you know, I think the business there has continued to do well and has generated cash with its existing production, improved its balance sheet, and has continued to improve.

Speaker #5: And our again, working through the process to rehabilitate that and get it back into I'll say into commerce. And so I wouldn't plan on that being an immediate benefit.

Speaker #5: I think this is a long-term project for us that's going to take us several years. But I do think it's an attractive asset. With respect to Laramie, I think the business there is continued to do well.

Speaker #5: And has generated cash with its existing production and improved its balance sheet. And has continued to improve I would say like I've mentioned in the past, we own 46% of Laramie.

William Monteleone: I would say, like I've mentioned in the past, you know, we own 46% of Laramie, so we have influence, but we don't have control. Our view is that the best way to generate maximum value for our stake is to align with the other shareholders who have different time horizons than we do, and ensure that we maximize the value of the business when they're ready to monetize. Again, I think the gas business is non-core to us. At the end of the day, though, we need to, I think, ensure that we are aligned with our partners to maximize the value and aren't selling a minority, non-controlling position.

Speaker #5: So, we have influence, but we don't have control. And our view is that the best way to generate maximum value for our stake is to align with the other shareholders who have different time horizons than we do.

Speaker #5: And ensure that we maximize the value of the business when they're ready to monetize. And so, again, I think the gas business is non-core to us.

Speaker #5: At the end of the day though, we need to I think ensure that we are aligned with our partners to maximize the value and aren't selling a minority non-controlling position.

Speaker #3: Got it. Thank you.

Matthew Blair: Got it. Thank you.

Speaker #1: Again, if you have a question, please press star, then one. The next question comes from Manav Gupta with UBS. Please go ahead.

Operator: Again, if you have a question, please press Star, then one. The next question comes from Manav Gupta with UBS. Please go ahead.

Speaker #6: Good morning, I have a quick clarification. Can you remind us of your sensitivity to the WCS differential? I think it was about $14 million per $1 of widening, but if you could reflect on that and then your view on the WCS differential itself, with more Venezuelan crude coming into the United States.

Manav Gupta: Good morning. I had a very quick clarification. Can you remind us of your sensitivity to the WCS differential? I think it was about $14 million by $1 of widening. If you could reflect on that, and then your view on the WCS differential itself with more Venezuelan crude coming into the United States.

Speaker #3: Sure, Manav.

William Monteleone: Sure, Manav. Yeah, I think kind of at mid-cycle, you know, we're roughly running between 40 and 50 thousand barrels a day of WCS, it's basically every $1 is worth around $15 to $16 million a year. That's, I think, the best way to think about our sensitivity on that. I think at the end of the day, you know, we are an indirect beneficiary of incremental Venezuelan barrels on the Gulf Coast, really, as it cascades and pushes Canadian barrels back up into the Mid-Continent.

Speaker #5: Yeah, so I think kind of a mid-cycle. We're roughly running between 40,000 and 50,000 barrels a day of WCS. And so it's basically every dollar is worth around $15 to $16 million a year.

Speaker #5: So, that's, I think, the best way to think about our sensitivity on that. And I think, at the end of the day, we are an indirect beneficiary of incremental Venezuelan barrels on the Gulf Coast.

Speaker #5: Really as it cascades and pushes Canadian barrels back up into the mid-continent. And so we're seeing less volume flowing out of Vancouver and West Ridge to the Far East.

William Monteleone: You know, we're seeing less volume flowing out of Vancouver and Westridge to the Far East, more barrels in Canada, and increasing apportionment on the lines, which is all favorable for crude differentials, you know, moving back out towards our mid-cycle range of, you know, let's call it $15 to $16 under WTI.

Speaker #5: More barrels in Canada, and increasing apportionment on the lines, which is all favorable for crude differentials. Moving back out towards our mid-cycle range of, let's call it, $15 to $16 under WTI.

Speaker #6: Thank you so much, I'll turn it over.

Manav Gupta: Thank you so much. I'll turn it over.

Speaker #1: This concludes our question and answer session. I would like to turn the conference back over to Will Monteleone for any closing remarks.

Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Will Monteleone for any closing remarks.

Speaker #5: Thank you, Drew.

William Monteleone: Thank you, Drew. 2025 was a year of meaningful progress. We set clear objectives, and we largely achieved them. We strengthened the balance sheet, we expanded the structural earnings power of the portfolio, and we continued to build a more diversified and durable business. Our objective remains constant, to increase the mid-cycle earnings power and grow the free cash flow per share over time through disciplined execution. I want to thank all of our employees across the organization for their continued focus on safe and reliable execution. Thank you all, and have a great day.

Speaker #3: 2025 was a year of meaningful progress. We set clear objectives and we largely achieved them. We strengthened the balance sheet. We expanded the structural earnings power of the portfolio.

Speaker #3: And we continued to build a more diversified and durable business. Our objective remains constant to increase the mid-cycle earnings power and grow the free cash flow per share over time through disciplined execution.

Speaker #3: I want to thank all of our employees across the organization for their continued focus on safe and reliable execution. Thank you all and have a great day.

Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

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