Jeff Morris, Alon's CEO, said, "In March 2010, Alon Refining Krotz Springs prepaid its revolving credit facility from a new $65 million bridge credit facility that is scheduled to terminate on June 15, 2010. In April 2010, Alon Refining Krotz Springs signed a multi-year agreement with a major financial institution that will allow us to retire [image-nocss] the obligations under this bridge credit facility and support the operation of the Krotz Springs refinery at 75,000 barrels per day. The structure of this new agreement is also expected to result in lower borrowing costs. The Krotz Springs refinery has been shut down since November 2009 for turnaround and capital projects work and is expected to be back in full operation in the second half of May 2010."
He added, "Also in March 2010, a U.S. bankruptcy court approved our purchase of the Bakersfield refinery from Big West of California, LLC, a subsidiary of Flying J, Inc. We are continuing our work to finalize this transaction. As I have noted before, we believe the Bakersfield refinery provides an alternative solution to convert our current vacuum gas oil production at our California refineries into gasoline and distillate products."
In Alon's retail and branded marketing segment, retail fuel sales gallons increased by 15.6% from 28.3 million gallons in first-quarter 2009 to 32.7 million gallons in first-quarter 2010. Branded fuel sales increased by 5.5% from 66.8 million gallons in first-quarter 2009 to 70.5 million gallons in first-quarter 2010.
Alon USA., Dallas, is an independent refiner and marketer of petroleum products, operating primarily in the South Central, Southwestern and Western regions of the United States. It owns four crude oil refineries in Texas, California, Louisiana and Oregon, with an aggregate crude oil throughput capacity of approximately 250,000 barrels per day. Alon is the largest 7-Eleven licensee in the United States and operates more than 300 convenience stores in Texas and New Mexico. Alon markets motor fuel products under the FINA brand at these locations and at approximately 625 distributor-serviced locations.
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Marathon Oil Corp., Houston, has reported first-quarter 2010 net income of $457 million or 64 cents per diluted share. Net income in first-quarter of 2009 was $282 million, or 40 cents per diluted share.
"Marathon delivered a strong operating performance across its businesses and solid financial results in the first quarter despite the largest amount of planned maintenance and turnaround activity in the company's history," said Clarence P. Cazalot Jr., Marathon's president and CEO. "With most of that work now behind us, the company is well positioned to benefit from the ongoing global economic recovery and, in particular, from much better oil prices compared to this time last year and improving margins for refined products."
Total segment income was $292 million in first-quarter 2010, compared to $245 million in first-quarter 2009. Exploration and production (E&P) segment income totaled $502 million in first-quarter 2010, compared to $83 million in first-quarter 2009. Refining, marketing and transportation (RM&T) segment reported a loss of $237 million in first-quarter 2010, compared to income of $159 million in first-quarter 2009. The refining and wholesale marketing gross margin per gallon was a negative 5.69 cents in first-quarter 2010 compared to a positive 7.92 cents in first-quarter 2009.
Primary factors contributing to the lower margin were incrementally higher crude oil costs relative to refined product values, quarter over quarter, due to lower sweet/sour differentials and a weaker Contango market structure; higher manufacturing costs resulting from a combination of increased planned turnaround/maintenance and depreciation expenses; and lower wholesale prices relative to applicable spot market values, quarter over quarter.
Speedway SuperAmerica LLC (SSA) gasoline and distillate gross margin per gallon averaged 11.95 cents in first-quarter 2010, compared to 10.68 cents in first-quarter 2009. SSA first-quarter 2010 same-store gasoline sales volumes were substantially unchanged compared to first-quarter 2009, while same-store merchandise sales increased by approximately 7% for the same period.
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And Western Refining Inc., El Paso, Texas, as reported a net loss of $30.7 million, or a loss of 35 cents per diluted share, for the first quarter ended March 31, 2010, versus first-quarter 2009 reported net earnings of $58.9 million, or 86 cents per diluted share.
The year-over-year decline in net income was primarily due to lower refined product margins driven by weakness in finished product prices relative to crude and feedstock costs. A major turnaround at the El Paso refinery and planned maintenance at the Gallup refinery also impacted net income for the quarter.
In 2009, Western announced that it would consolidate the operations of its two Four Corners refineries into the Gallup refinery resulting in a $25 million annual reduction in operating expenses. The Company also identified approximately $25 million in additional cost reduction initiatives. Through the first quarter of 2010, Western is ahead of schedule in realizing its 2010 cost reduction goal of $50 million and continues to pursue additional savings opportunities.
Jeff Stevens, Western's President and CEO, commented on the quarter, "We saw improvement in refining margins throughout the quarter, especially when compared to the extremely low margin environment of last October and November. During the quarter, we also continued to see a positive impact on earnings from our cost savings initiatives."
He added, "Based on what we are seeing in our business, the overall economy seems to be strengthening. Also, we have seen an increase in sales of diesel fuel to our industrial and commercial customers based on improvements in their businesses. As we enter the driving season, we are cautiously optimistic in our outlook for demand and margins for refined products. Additionally, with our continued focus on operational efficiencies, we believe we are well-positioned for improved results."
Western Refining is an independent refining and marketing company headquartered in El Paso, Texas. It operates refineries in El Paso, Gallup, N.M., and Yorktown, Va. Western's asset portfolio also includes refined products terminals in Albuquerque and Bloomfield, N.M., and Flagstaff, Ariz., and, gas stations and convenience stores in Arizona, Colorado and New Mexico, a fleet of crude oil and finished product truck transports, and wholesale petroleum products operations in Arizona, California, Colorado, Nevada, New Mexico, Texas and Utah.
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