Category: PBF

PBF – The Big News That Sent PBF Energy Stock Soaring Friday

What happened

Shares of PBF Energy (NYSE:PBF) soared Friday, snapping its recent losing streak and closing the day up 12.5%. The downstream oil stock‘s peers barely budged, though, so what’s brewing? 

So what

Under the Environmental Protection Agency’s (EPA) Renewable Fuel Standard (RFS), oil refiners are required to blend a certain amount of renewables, specifically biofuels like ethanol and biodiesel, into the gasoline, diesel, and jet fuel they produce. Refiners either have to blend to meet yearly renewable volume obligation (RVO) as mandated under the RFS, or buy tradable renewable fuel credits called RINs in the open market.

A couple looking at a paper in surprise.

Image source; Getty Images.

Refiners have been opposing this biofuels-blending mandate for years, but discontent within the industry has fired up lately for two reasons: The EPA hasn’t fixed RVO for 2021 yet in the wake of the coronavirus, but prices of RINs shot up manifold in the past year or so as refiners have had to purchase RINs nonetheless based on 2020 RVO despite the broader slump in demand for fuel thanks to pandemic restrictions. That’s eaten away into refiners’ margins.

To make matters worse, refiners are now facing RIN shortage as higher RIN prices failed to boost ethanol production. Time and again, PBF Energy’s management has called RFS a “broken program” and stressed the importance of addressing the shortfall in RINs. In fact, refiners are now even setting up their own renewable-energy fuel facilities to mitigate RFS costs. PBF Energy is evaluating converting an idle hydrocracking unit into a renewable diesel-fuel producing plant, and recently selected Honeywell for the project.

News coming out this morning, therefore, was bound to send PBF Energy shares higher.

The EPA is reportedly about to send its 2021 biofuels-blending draft for initial review to the White House, post which it can set up RVO mandate for 2021, according to the latest update from Bloomberg.

Now what

Thanks to high RIN costs and shrinking margins, several analysts have downgraded PBF Energy stock in the past couple of months. Now, even a small cut in the EPA’s 2021 RVO mandate could boost the refiner’s prospects, so you’d definitely want to keep an eye out on this one.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

PBF – PBF Stock Fell 10.62%: Why It Happened

  • The stock price of PBF Energy Inc (NYSE: PBF) fell by 10.62%. This is why it happened.

The stock price of PBF Energy Inc (NYSE: PBF) fell by 10.62%. Investors are responding negatively to Northern California regulators announcing yesterday that it is now requiring two of the largest oil refiners to slash fine particulate air pollution — which is going to require costly modifications at the plants, according to Reuters.

The requirement was passed in a 19-3 vote by the Bay Area Air Quality Management District governing board. And refineries in the area like PBF Energy’s Martinez refinery and Chevon’s Richmond plant are going to have to set up wet gas scrubbers to reduce pollution from the gasoline-making fluid catalytic cracking units (FCCU) within 5 years. As a result, PBF’s particulate matter emissions from its cat crackers are expected to be reduced by about 70%. FCCUs are known for turning heavier crude oil into lighter petroleum products like gasoline are considered the largest polluters of fine particulate matter in the Bay Area.

As part of the amended rule, refineries with FCCUs have to limit annual emissions of particulate matter to 0.01 grain per dry standard cubic foot within the next 5 years. But PBF and Chevon are urging regulators to consider a 0.02 limit by 2023.

“We have been working closely throughout the rule-making process with BAAQMD staff and anticipated today’s outcome. Importantly, the rule-making requires refineries to meet a specific emissions standard by 2026, without requiring the installation of a wet gas scrubber or any other specific technology,” said Paul Davis, President of PBF Energy’s Western Region. “PBF has previously planned projects that will be implemented over the coming months that will allow our Martinez refinery to achieve emissions reductions significantly closer to the desired level in the first quarter of 2022. We will continue to work with the BAAQMD to arrive at our mutually desired goal of improving air quality and continuing to provide our vital products to one of the largest fuel markets in the world.”

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.

PBF – PBF Energy Comments on Bay Area Air Quality Management District Decision

PARSIPPANY, N.J., July 21, 2021 /PRNewswire/ — PBF Energy Inc. (NYSE:PBF) today commented on the Bay Area Air Quality Management District (BAAQMD) Board members’ decision to adopt Proposed Amended Rule (PAR) 6-5 related to particulate emissions from refinery Fluid Catalytic Cracking (FCC) units in the Bay Area.

Paul Davis, President of PBF Energy’s Western Region, stated, “We have been working closely throughout the rule-making process with BAAQMD staff and anticipated today’s outcome. Importantly, the rule-making requires refineries to meet a specific emissions standard by 2026, without requiring the installation of a wet gas scrubber or any other specific technology.”

Mr. Davis concluded, “PBF has previously planned projects that will be implemented over the coming months that will allow our Martinez refinery to achieve emissions reductions significantly closer to the desired level in the first quarter of 2022. We will continue to work with the BAAQMD to arrive at our mutually desired goal of improving air quality and continuing to provide our vital products to one of the largest fuel markets in the world.”

Forward-Looking Statements
Statements in this press release relating to future plans, results, performance, expectations, achievements and the like are considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors, many of which may be beyond the company’s control, that may cause actual results to differ materially from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors and uncertainties that may cause actual results to differ include but are not limited to the risks disclosed in the company’s filings with the SEC, as well as the risks disclosed in PBF Logistics LP’s SEC filings and any impact PBF Logistics LP may have on the company’s credit rating, cost of funds, employees, customer and vendors; risk relating to the securities markets generally; risks associated with the East Coast refining reconfiguration and the acquisition of the Martinez refinery, and related logistics assets; our ability to make, and realize the benefits from, acquisitions or investments, including in renewable diesel productions; the effect of the COVID-19 pandemic and related governmental and consumer responses; our expectations regarding capital spending and the impact of market conditions on demand for the balance of 2021; and the impact of adverse market conditions affecting the company, unanticipated developments, regulatory approvals, changes in laws and other events that negatively impact the company. All forward-looking statements speak only as of the date hereof. The company undertakes no obligation to revise or update any forward-looking statements except as may be required by applicable law.

About PBF Energy Inc.
PBF Energy Inc. (NYSE:PBF) is one of the largest independent refiners in North America, operating, through its subsidiaries, oil refineries and related facilities in California, Delaware, Louisiana, New Jersey and Ohio. Our mission is to operate our facilities in a safe, reliable and environmentally responsible manner, provide employees with a safe and rewarding workplace, become a positive influence in the communities where we do business, and provide superior returns to our investors.

PBF Energy Inc. also currently indirectly owns the general partner and approximately 48% of the limited partnership interest of PBF Logistics LP (NYSE: PBFX).

SOURCE PBF Energy Inc.

Related Links

http://www.pbfenergy.com

PBF – Why Is PBF Energy (PBF) Up 88.7% Since Last Earnings Report?

A month has gone by since the last earnings report for PBF Energy (PBF Free Report) . Shares have added about 88.7% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is PBF Energy due for a pullback? Before we dive into how investors and analysts have reacted as of late, let’s take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

PBF Energy Posts Huge Q4 Loss on Weak Refining Margin

PBF Energyreported fourth-quarter 2020 loss of $4.53 per share, wider than the Zacks Consensus Estimate of a loss of $3.41. The company reported earnings of 60 cents per share in the year-ago quarter.

The weak quarterly earnings can be attributed to lower crude oil and feedstock throughput volumes, significantly reduced gross refining margin, as well as increased refinery operating expense.

Total revenues decreased to $3,655.1 million from $6,301.5 million in the prior-year quarter. However, the top line beat the Zacks Consensus Estimate of $3,522 million.

Energy demand destruction caused by coronavirus-induced lockdowns and travel bans massively affected refining and marketing companies’ 2020 bottom line.

The pandemic forced PBF Energy to reduce refinery rates in second-half 2020. Importantly, its refineries are expected to run at reduced utilization rates until demand is adequate. Near-term throughput volumes will likely be in the range of 675-725 thousand barrels per day (bpd).

Looking forward, the company’s East Coast refining reconfiguration and other favorable moves are expected to lead to $200-$225 million of cost savings per annum. Its refining capital expenditure for the first half of 2021 is now expected to be $150 million.

Segmental Performance

The company’s operating loss at the Refining segment was $311.6 million against profit of $184.9 million a year ago.

It generated a profit of $41.9 million from the Logistics segment, which reflects a decrease from the prior-year quarter’s $42.9 million.

Throughput Analysis

Volumes:

For the quarter under review, crude oil and feedstocks throughput volumes were 677.3 thousand bpd, lower than the year-ago figure of 843 thousand bpd.

East Coast, Mid-Continent, Gulf Coast and West Coast regions accounted for 33.8%, 16.5%, 17.5%, and 32.2%, respectively, of total oil and feedstock throughput volume. 

Margins:

Company-wide gross refining margin per barrel of throughput — excluding special items — was recorded at 98 cents, significantly lower than the year-earlier quarter’s $9.31.

Refining margin per barrel of throughput was 9 cents in the East Coast, down from $8.16 in the year-earlier quarter. Realized refining loss was $1.64 per barrel in the Gulf Coast against a profit of $6.05 in the prior-year period. Moreover, the metric was $2.72 and $2.17 per barrel in the West Coast and Mid-Continent, down from $14.85 and $9.42, respectively, a year ago.

Refinery operating expense per barrel of throughput was $7.25, higher than $5.28 in the year-ago quarter.

Costs & Expenses

Total costs and expenses for the reported quarter were $3,983.2 million, significantly lower than $6,178.5 million in the year-ago period. Cost of sales — which includes operating expenses, cost of products and others — amounted to $3,835.6 million, lower than the year-ago level of $6,066.3 million. General and administrative expenses fell to $61.5 million from $108.1 million in the year-ago period.

Capital Expenditure & Balance Sheet

Through the fourth quarter, the company spent $45.7 million capital on refining operations and $2.7 million on logistics businesses.

At quarter-end, it had cash and cash equivalents of $1,609.5 million, up from the third-quarter level of $1,282.6 million. As of Dec 31, PBF Energy had a total debt of $4,661 million, up from the third-quarter level of $4,411.1 million. This resulted in total debt to capitalization of 68%. 

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended upward during the past month. The consensus estimate has shifted 6.69% due to these changes.

VGM Scores

Currently, PBF Energy has a nice Growth Score of B, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren’t focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, PBF Energy has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

PBF – PBF Energy to Participate in the Bank of America Refining Conference

PARSIPPANY, N.J., March 5, 2021 /PRNewswire/ — PBF Energy Inc. (NYSE:PBF) today announced that members of its management team will participate in the Bank of America Refining Conference on March 10, 2021.

About PBF Energy Inc.
PBF Energy Inc. (NYSE:PBF) is one of the largest independent refiners in North America, operating, through its subsidiaries, oil refineries and related facilities in California, Delaware, Louisiana, New Jersey and Ohio. Our mission is to operate our facilities in a safe, reliable and environmentally responsible manner, provide employees with a safe and rewarding workplace, become a positive influence in the communities where we do business, and provide superior returns to our investors.

PBF Energy Inc. also currently indirectly owns the general partner and approximately 48% of the limited partnership interest of PBF Logistics LP (NYSE: PBFX).

SOURCE PBF Energy Inc.

Related Links

http://www.pbfenergy.com

PBF – PBF Energy to Participate in Virtual Investor Conferences

PARSIPPANY, N.J., Dec. 30, 2020 /PRNewswire/ — PBF Energy Inc. (NYSE:PBF) today announced that members of its management team will participate in the Sankey Research Virtual Refining Conference on January 4, 2021, the 3rd Annual Mizuho Virtual Refining Conference on January 5, 2021, and the Goldman Sachs Global Energy Conference 2021 on January 6, 2021.

About PBF Energy Inc.

PBF Energy Inc. (NYSE:PBF) is one of the largest independent refiners in North America, operating, through its subsidiaries, oil refineries and related facilities in California, Delaware, Louisiana, New Jersey and Ohio. Our mission is to operate our facilities in a safe, reliable and environmentally responsible manner, provide employees with a safe and rewarding workplace, become a positive influence in the communities where we do business, and provide superior returns to our investors.

PBF Energy Inc. also currently indirectly owns the general partner and approximately 48% of the limited partnership interest of PBF Logistics LP (NYSE: PBFX).

SOURCE PBF Energy Inc.

Related Links

http://www.pbfenergy.com

PBF – Downturn in PBF Energy Stock Could Be an Opportunity

Oil refiner PBF Energy (NYSE:PBF) was formed in 2008 when private equity experts Blackstone Group (NYSE:BX) saw opportunity in the decade’s energy shortage. PBF stock began trading in 2012.

oil stocks

Source: Shutterstock

Now, after falling in price by over 76% in 2020, a victim of the pandemic’s falling demand, investment managers at Blackrock (NYSE:BLK) see opportunity. They’ve bought 14% of the shares.

This is good news for PBF, which is fighting for its life. It’s burning through $100 million in cash each month in refining oil and has just $2 billion in liquidity. PBF hopes to cut the burn in half, but Blackrock obviously sees an end to it.

If Blackrock is right, PBF is a bargain.

The PBF Story

At $7 per share, PBF has a market cap of just $840 million. During the third quarter alone, it had revenues of nearly $3.7 billion, but lost $417 million, $3.49 per share, on those sales.

PBF was formed with east coast refinery assets. In mid-2019 it agreed to buy Shell’s (NYSE:RDS.A) Martinez, California refinery, near San Francisco, for $1.2 billion. The deal closed in February, right before the pandemic stalled the economy. At the time PBF called Martinez “a top-tier asset.”

The deal gave PBF growth, but at the price of volatility. The company lost $8.93 per share during the March quarter, earned $3.23 per share during the June quarter, then swung to another loss.

The profit came after it sold five hydrogen plants to Air Products & Chemicals (NYSE:APD) for $530 million and cut its capital spending by $240 million. It suspended the dividend, cut headquarters staff, and then shut most production at a New Jersey refinery, laying off 250.

During the third quarter, cash flow turned negative. Morgan Stanley (NYSE:MS) recently downgraded PBF to “underweight” and it was forced to pay interest of 9.25% to sell $250 million in notes.

What Blackrock Sees

Oil refineries produce a variety of products, from tar and fuel oil at the bottom of their crackers to gasoline and jet fuel near the top. In July, PBF told analysts it would have to shut down production, despite rising gas prices, because it couldn’t sell the jet fuel.

In the short term there’s a major crisis in the refinery business. No one wants refineries. Some are just shutting down.

PBF remains the fourth-largest U.S. refiner, running at less than 80% of its capacity. But the end of the pandemic, and rising demand for transportation, could mean a quick return to profits next year.

Over the longer run the situation looks bleak. China should become the world’s largest refiner in 2021. India will double its refining capacity over the next five years.

The Bottom Line

Blackrock is getting in at what it sees as a bottom. PBF did $24 billion of business in 2019 and, if estimates are correct, should do $16.7 billion in 2020.

If Blackrock is seen as a strong hand, PBF profits could rise sharply in 2021, along with the stock price.

But this is institutional speculation. Refining is moving to where demand is strongest, which is Asia. U.S. demand for gasoline should drop as electric cars take hold. PBF could export some of that gasoline to Latin America and the Caribbean. But the long-term future looks bad and there’s over $5.5 billion in debt. That’s why PBF’s new debt cost so much.

If you do follow Blackrock into PBF stock, make sure you have an exit strategy. My guess is they do.

On the date of publication, Dana Blankenhorn did not have (either directly or indirectly) any positions in any of the securities mentioned in this article.

Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of the environmental thriller Bridget O’Flynn and the Bear,  available at the Amazon Kindle store. Write him at danablankenhorn@gmail.com or follow him on Twitter at @danablankenhorn.

PBF – PBF Energy Announces Pricing of $250 Million Add-on Offering of 9.25% Senior Secured Notes Due 2025

PARSIPPANY, N.J., Dec. 16, 2020 /PRNewswire/ — PBF Energy Inc. (NYSE:PBF) (“PBF Energy”) today announced that its indirect subsidiary, PBF Holding Company LLC (“PBF Holding”), priced an add-on offering of $250.0 million in aggregate principal amount of 9.25% senior secured notes due 2025 (the “Notes”) at an issue price of 100.25% of their face value. The Notes will be co-issued by PBF Finance Corporation, a wholly owned subsidiary of PBF Holding. The Notes will be issued as additional notes under the existing indenture pursuant to which PBF Holding and PBF Finance Corporation previously issued $1,000.0 million aggregate principal amount of 9.25% Senior Secured Notes due 2025. The offering is expected to close on December 21, 2020, subject to customary closing conditions. PBF Holding intends to use the net proceeds from the offering for general corporate purposes.

The Notes will be offered in a private placement and are expected to be resold by the initial purchasers to qualified institutional buyers under Rule 144A and to non-U.S. persons outside the United States pursuant to Regulation S under the Securities Act of 1933, as amended (the “Securities Act”). The offer of the Notes will be made only by means of an offering memorandum to qualified investors and has not been registered under the Securities Act or any applicable state securities laws, and the Notes may not be offered or sold in the United States absent registration under the Securities Act or an applicable exemption from the registration requirements of the Securities Act.

This press release is being issued pursuant to Rule 135c under the Securities Act, and is neither an offer to sell nor a solicitation of an offer to buy any securities and shall not constitute an offer to sell or a solicitation of an offer to buy, or a sale of any securities in any jurisdiction in which such offer, solicitation or sale is unlawful.

Forward-Looking Statements
Statements in this press release relating to future plans, results, performance, expectations, achievements and the like are considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, the company’s expectations with respect to the timing and amount of the offering and the anticipated use of proceeds therefrom. These forward-looking statements involve known and unknown risks, uncertainties and other factors, many of which may be beyond the company’s control, that may cause actual results to differ materially from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors and uncertainties that may cause actual results to differ include but are not limited to the risks disclosed in the company’s filings with the SEC. All forward-looking statements speak only as of the date hereof. The company undertakes no obligation to revise or update any forward-looking statements except as may be required by applicable law.

About PBF Energy Inc.
PBF Energy Inc. (NYSE:PBF) is one of the largest independent refiners in North America, operating, through its subsidiaries, oil refineries and related facilities in California, Delaware, Louisiana, New Jersey and Ohio. Our mission is to operate our facilities in a safe, reliable and environmentally responsible manner, provide employees with a safe and rewarding workplace, become a positive influence in the communities where we do business, and provide superior returns to our investors.

PBF Energy Inc. also currently indirectly owns the general partner and approximately 48% of the limited partnership interest of PBF Logistics LP (NYSE: PBFX).

SOURCE PBF Energy Inc.

Related Links

http://www.pbfenergy.com