Valero Energy Corporation (NYSE:VLO) Q4 2022 Earnings Call Transcript

Page 6 of 6

Matthew Blair: Hey, thanks for taking my question. Good morning everyone. Do you have any early thoughts on the Q1 2023 refining capture rate? It seems like we might want to be just a little conservative here. I think you’re refining guidance implies like 86% to 89% utilization. So, probably a heavier turnaround period. And then some other factors like butane blending and octane spreads still good, but looks like they’re coming down from Q4 levels. So, I guess, directionally, does that make sense that we want to be more conservative on capture in Q1 and anything else we should consider there?

Lane Riggs: Yes, I don’t know that you need to be more conservative on capture rates. Obviously, we have seasonal maintenance. We’d have to look at the material balance and figure out how that actually impacts the sort of the dollars per barrel capture rates. So, I wouldn’t jump to conclusion of changes, but appreciably from Q4 to Q1, both quarters, you’re blending butane both quarters, you have fairly wide sour discounts. So, I don’t — we’ll just have to see how that plays out. But obviously, we have some maintenance occurring, our turnaround were occurring in Q1 and that’s normal for us. That’s — when we do turn around, this is a heavy quarter for us versus the rest of the year.

Matthew Blair: Got it. And then for DGD, how should we think about the feedstock mix going forward? Your old guidance was one-third fat, one-third corn oil, one-third uco , but you started up DGD 3 and your partners acquired production. So, it seems like we might want to inch up maybe a little bit on the fat compared to that one-third guidance, maybe inch down on the uco, is that fair? And do you have anything more specific on that?

Rich Walsh: Well, I guess, we don’t normally get into that level of detail on feeds. What I would say is the whole DGD platform is big for waste oils. And so it’s always going to favor the and tallows and inedible corn oil over other feeds from a CI standpoint. So how each of those individual feedstocks play is always €“ that’s very dynamic. And the thing I’d say is what we do see, maybe just to add some color, is we are running a lot more of international feedstocks, both coming from Darling as well as just more broadly in the world. So €“ and those are waste oils. We ran some veg oil in the fourth quarter because as we spoke earlier, the prices of it became attractive. But going forward, I think it’s always going to be some mix of those three waste oils as the most attractive feeds.

Matthew Blair: Great. Thank you.

Operator: Thank you. We’re showing no additional questions in queue at this time. I’d like to turn the floor back over to Mr. Bhullar for closing comments.

Homer Bhullar: Thanks, Donna. I appreciate everyone joining us today. Obviously, if you have any additional questions, please feel free to reach out to the IR team. Thanks, everyone, and have a great week.

Operator: Ladies and gentlemen, thank you for your participation. This does conclude today’s event. You may disconnect your lines or log off the webcast at this time, and enjoy the rest of your day.

Follow Valero Energy Corp (NYSE:VLO)

Page 6 of 6