HF Sinclair Corporation (NYSE:DINO) Q3 2023 Earnings Call Transcript

Tim Go: No, that question has been asked yet, Matt. What I would tell you is, we are focused first on closing HEP, it’s been a transaction that we have started earlier in the year and that we are laser focused on completing. As Atanas mentioned earlier, we believe that we will be able to close here before the end of the year. Our priorities are internally focused. We have talked about that before we are really looking to improve our internal reliability as well as our integration and optimization across our assets. So that’s really where our main focus is. We don’t think that the time right now is right to be looking at large M&A as you kind of described it, both from a market standpoint, we like to look counter cyclically.

Right now, I think we are finding valuations [particularly] high but more importantly, from a internal perspective, we are really focused internally more than externally. Now I know there is some assets on the table that are starting to be marketed. We will take a look just like everyone else is, but it’s not a priority for us right now, Matt.

Operator: Your next question comes from the line of Roger Read from Wells Fargo Securities.

Roger Read: Just a couple things to catch up on. One, your comments about refining reliability getting that up. I am just curious if you were say over the last 12 to 24 months, what your available uptime has been and then maybe what the target is for available uptime, ex-turnarounds and all that as we think about a marker for where you’ve been and a marker for where you’re trying to go?

Tim Go: We don’t provide a lot of the internal measures that we use. We have a lot of internal measures that we’re tracking both at the refinery level as well as at the regional level. But we don’t disclose that. We are making progress. We’re feeling good about the progress that we’re making. Val’s talked about that. We are seeing progress. I think one of the biggest ways that we’re seeing progress is in just the improved safety and environmental performance of our assets, which we always believe is a leading indicator of how our reliability is doing as well and the rest of our business is doing. And I can tell you we’re on pace to set another record safety year, both on a process safety standpoint and a personnel safety standpoint. So we feel good about the internal indicators, we’re just not prepared to share any of those, Roger.

Roger Read: Well, if not absolute numbers, I mean, maybe a basis point improvement. I mean looking at 200, 300, 500, something along those lines, if I can dig a little deeper?.

Atanas Atanasov: I would just encourage you to stay tuned and you’ll see graduated process — progress along those lines, and we’re focused on improving reliability.

Roger Read: Switching gears slightly back to the renewable diesel business. So you went through with one of the earlier questions, you know all the things that helped. But I was just curious if you thought year-over-year or quarter-to-quarter maybe how that broke down market factors relative to things you were able to do about changing the mix, keeping control of costs, stuff like that? Just what might have helped out on the lubes front?

Atanas Atanasov: One of the first things that comes to mind is early on as we were getting this business up and running was working off high price feedstock in a backwardated market. So the team has done a lot of good progress with respect to managing inventory and ensuring that we’re focusing on using low CI feedstock. So that’s number one. Number two would be improvements around catalyst performance and optimization. Number three, as a result of our turnarounds and the technical focus on the team is improving hydrogen availability. And so those would be kind of the three things that come to mind and I could ask Steve or Val to add additional color.