The raise in earnings for the three months ended March 31, 2009, compared in the year-ago quarter, was mainly because of stronger refining margins. The higher margins were the result of improved market conditions and a decrease in the cost of Western Refining’s crude oil, mainly the result of processing a lower-cost, heavier crude oil slate.
For the first quarter of 2009, Western Refining generated cash flow from operations of $96.8 million. As of March 31, 2009, there were no cash borrowings outstanding under Western Refining revolving credit facility, and since that date, the company has not made any cash borrowings.
Paul Foster, Western Refining chief executive officer, said, “We are pleased with our first quarter results. This was one of the most profitable first quarters in the history of our company. Our earnings growth reflects the operational improvements we have made as well as strong refining margins in January and February.”
“We are taking a number of actions to continue this momentum,” Foster continued. “In addition to raising sour crude throughput, the recent start-up of our gasoline hydrotreater unit at the El Paso refinery also gives us the capability to increase our production of Phoenix grade gasoline from approximately 12,000 barrels per day to in excess of 20,000 barrels per day. Historically, Phoenix has been one of our best markets in terms of both product demand and gross margin.
“In the past year, we have significantly improved our refining operations. The
improvements we made have positioned us to process a wide range of crude oils and intermediate feedstocks at our refineries. This flexibility should contribute to continued earnings and cash flow growth in the future.”
Commenting on current market conditions, Foster said, “As we begin the spring and summer driving season, we are cautiously optimistic in our outlook for margins as a result of inventory draws, increased gasoline demand, and continued low refinery utilization rates. In our southwest market, several refineries will be undergoing major maintenance turnarounds in the second quarter. Additionally, as we approach the summer paving season, asphalt margins at the El Paso refinery are significantly better this year than last year.”
