Mike Hennigan: Yes. Sam, here’s the way I think about it. As you know, we don’t control the margins. So, as the quarter progresses, we don’t have a specified amount that says we’re going to do x in this quarter, other than we’ve been trying to be as aggressive as we possibly can within the constraints that the SEC puts on us, such as daily volume traded limitations or blackout periods, et cetera, et cetera. So, we’ve been — because it kind of looks like it’s been consistent just because we’ve been trying to be as aggressive as possible, once we generate the cash, as we talk to Paul’s question, we have our dedication that we want to invest capital in. And then we want to be returning capital to shareholders as quickly as we can.
At the same time, I will tell you that we also still try to beat the market. One of our goals is to be as aggressive as we can return capital, but take advantage of the volatility that’s within the quarter. And since we started this program, we’ve ended up reducing the share count by about 40%. It’s a rough number. And during that process, we’ve kind of beat the market by about $4. So, if you say, hey, we’ve reduced somewhere around 270 million shares at around $4, it’s roughly about $1 billion of value creation just in our execution. But it starts with, obviously, generate cash, figure out how much we can return to shareholders as quickly as we can within those constraints and then try our best to beat the market during that execution.
I hope that helps.
Sam Margolin: Yes, very much so. Thanks. And my follow-up is just more of a straightforward ops question, but it’s about the West Coast. And TMX has been delayed. But once it starts up, it might be impactful to fundamentals on the West Coast. And it seems noteworthy because of your comments about how the Midwest is this integrated system with shipper status for WCS and you’re able to move things around. And so I wonder in the context of TMX, if there’s — if you see any analogs there with building out sort of a full value chain or commercial integrated platform.
Rick Hessling: Sam, it’s Rick. Your analogy is spot on. So when TMX comes on line, we’ll not only see benefits in the Pacific Northwest, specifically at Anacortes and at L.A. So, the way we look at it is you’re going to get access to an advantaged barrel more so than what you do today. And we believe that barrel will compete very well, especially on the West Coast. We believe TMX will have some start-up issues. They have some well-publicized marine hurdles they need to get over. And with that being said, having that barrel clear all the way to Asia will be difficult. And sitting on the West Coast, we have a structural advantage from a transportation cost perspective. So, we do see that playing into both of our assets, one in the Pacific Northwest and L.A. on the West Coast.
Operator: Next, you will hear from Roger Read with Wells Fargo.
Roger Read: All right. I’d like to come back around on the renewable diesel. We heard from others and seen some stories about permit issues. Just curious you can kind of walk us through the way we should be thinking about that as we head into start-up kind of year-end and in early part of ‘24.
Jim Wilkins: Roger, this is Jim Wilkins. We’re working with the county on one issue related to our land use permit. That issue, we expect will get resolved in the upcoming months, and it’s related to our odor mitigation plan. The resolution of that matter won’t impact our ability to construct or operate the facility.
Roger Read: Does it change at all the feedstock that you’d be able to use early on?
Jim Wilkins: No.
Roger Read: I’m not terribly experienced with this, but I know that some of the feedstocks are — well, let’s just say, they’re not what you would want to smell, I guess.
Jim Wilkins: No, Roger. So, we actually have an approved odor mitigation plan with the Air Quality Division. And actually, what we’re doing is circling back to the land use permit where we said we’d develop an order mitigation plan and embedding the plan that’s already been approved.
Roger Read: Okay. Perfect. And just to be absolutely clear, no other regulatory hurdles that need to be cleared for startup?
Jim Wilkins: Correct.
Operator: Our next question comes from John Royall with JPMorgan.
John Royall: So I had — my first one is a follow-up on the buyback. You’ve now gotten through another quarter with a really solid crack environment in 3Q and another quarter where you aren’t drawing any cash. And in fact, you build cash by about, I think, $1.5 billion which I wouldn’t characterize as a problem by any stretch, but you’ve talked about getting that cash balance down closer to $1 billion longer term. And Mike talked about the constraints to doing more on the buyback. And now, we’re seeing a worsening environment in 4Q. So, my question is, given all your excess cash, should we think about the buyback as not particularly sensitive to the crack environment? And would you expect to start drawing cash from here?
Maryann Mannen: Hey John, it’s Maryann. So, a couple of things. Yes, you’re absolutely right. As you see, we said a little over $13 billion at the end of the quarter, and again, just keeping in mind, about $1 billion of that belongs to MPLX. And then obviously, there is some working capital sensitivity as we have timing of our liability payments. We would expect to see a bit of that unwind as normal. We’ll see some of that happen in the fourth quarter and then again in the first quarter. Having said that, your point is accurate. We’ve said we’re quite comfortable with $1 billion on our balance sheet. The nice part about having the cash on the balance sheet today versus if we were sitting here a year ago is we’re generating close to $0.5 billion in interest income as we’re holding on to that cash.
Certainly, when we are looking at the amount of share buyback that we want to do in any particular period of time, and I think Mike articulated it as well, we’re looking at several factors. The fact that we’ve got cash on the balance sheet to allow us to take advantage of volatility, I think, is a plus. We remain committed to share repurchase and the return of capital. We’ve got some priorities, obviously, safe and reliable operation of our assets gets it first. We’re committed to our dividend, as we just shared with you. And we’re looking for opportunities to put that capital to work in order to be able to grow the business and particularly earn the types of returns that you all expect. And we continue to see share buyback as an efficient return of capital.
So again, we’ll look at all factors as we head into any particular quarter and try to be as opportunistic as we can and be sure that we are doing our best to beat the market and taking advantage of the volatility where we can.
John Royall: Great. Thank you. And then Maryann called out some turnaround work pulled in from next year to the second half of this year. And so just thinking about next year, any early look on what 2024 could look like from a turnaround perspective. I think you had some catch-up over the past two years, and now this work pulled into ‘23. So, is it reasonable to think it might be kind of a below average year?
