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3 Companies Winning Big Thanks to America’s Oil Boom
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3 Companies Winning Big Thanks to America’s Oil Boom

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Valero, Tesoro and Phillips 66 are all winning thanks to America’s energy boom.

Valero, Tesoro and Phillips 66 are all winning thanks to America’s energy boom.

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  • http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MjE0NjYzfENoaWxkSUQ9LTF8VHlwZT0z&t=1
  • http://www.phillips66.com/EN/investor/presentations_ccalls/Documents/2014%20Analyst%20Presentation%20web%20version.pdf
  • http://www.phillips66.com/EN/investor/presentations_ccalls/Documents/2014%20Analyst%20Presentation%20web%20version.pdf
  • file:///C:/Users/Owner/Downloads/UBS+Conference_5-21-14_Final.pdf
  • file:///C:/Users/Owner/Downloads/UBS+Conference_5-21-14_Final.pdf
  • file:///C:/Users/Owner/Downloads/2014%20Simmons%20Energy%20v2.pdf
  • file:///C:/Users/Owner/Downloads/2014%20Simmons%20Energy%20v2.pdf
  • file:///C:/Users/Owner/Downloads/UBS+Conference_5-21-14_Final.pdf

3 Companies Winning Big Thanks to America’s Oil Boom 3 Companies Winning Big Thanks to America’s Oil Boom Presentation Transcript

  • 3 Companies Winning Big Thanks to America’s Oil Boom
  • America’s energy boom is creating a disconnect with oil prices as America’s West Texas Intermediate (WTI) oil trades at a discount to the global benchmark Brent. Source: Tesoro Investor Presentation
  • This disconnect is a profitable opportunity for refiners. Photo credit: Phillips 66
  • Many are investing to rid themselves of foreign oil and replace it with cheaper American oil. Photo credit: Phillips 66
  • For example, by 2016 Phillips 66 is expected to completely eliminate Brent priced crude from its mix.
  • The company sees refining advantaged crude oil as a big key to improving its return on capital employed.
  • Meanwhile, 27% of Valero’s 2014 capital budget is to be spent to increase its ability to process lighter crude oils, up from 7% last year.
  • The goal is to effectively double its capacity to refine light crude oil derived from shale plays.
  • Tesoro is also investing to access more price advantaged crude oil at all its refineries.
  • In addition to being cheaper, another advantage to refining this oil is that it yields more higher valued products per barrel.
  • Increased distillate yields are important because of higher margins and demand growth.
  • Bottom line: Refiners are one of the biggest winners of America’s oil boom…
  • …and all three are well positioned to continue winning as the boom shows no end in sight. Photo credit: Phillips 66
  • This is becoming OPEC’s Worst Nightmare