This information and associated comments made during the course of this conference call may include forward-looking statements concerning the company. These may include statements of plans and objectives for future operations, statements of future economic performance or assumptions or estimates.The accuracy of these forward-looking statements is subject to a wide range of business risks and changes in circumstances that are described in the company’s reports that are filed from time to time with the Securities and Exchange Commission. Actual results and outcomes often differ from expectations. Please note, our call today does not constitute an offer to buy or sell any securities related to our recently announced merger with Holly Corporation. All solicitations to buy or sell securities and to secure shareholder proxy votes will be made under current SEC rules and regulations. I would now like to turn the call over to our Chairman, President and CEO, Mike Jennings. Michael Jennings Great. Thanks, Kristine. Good morning. Thanks for joining us. We're proud to present our first quarter results to you today, which represents our first quarter record for our company. This morning, Frontier reported $140 million in net income or $1.32 per diluted share for the first quarter of 2011. This compares with the first quarter 2010 net loss of $40 million or negative $0.39 a share. This quarter's achievement follows another quarter of significant improvement in inventory refining fundamentals and strong operations at both our plans to capitalize on this opportunity. Frontier's average diesel crack spread increased by more than $18 over the first quarter of 2010 to $25.53 per barrel in the most recent quarter. And Frontier's average gasoline crack spread increased by more than $9 over the first quarter of the prior year to $15.43 per barrel in the first quarter of 2011. Crude differentials also improved substantially in the most recent quarter compared to 2010. Our average light/heavy differential increased to $18.60 per barrel in the recent quarter, up from $4.91 per barrel in the same period of 2010, while the average sweet/sour differential increased to $3.58 per barrel, up from $1.77 in the first quarter of 2010.
The net effect of these improvements in crack spread and crude differentials was more than a $16 improvement in our gross refining margin of $19.84 per barrel in the first quarter of 2011, which compares to $3.30 per barrel in the same period of 2010. Refinery operating expenses increased on an absolute basis to $75.8 million in the most recent quarter compared to $68.9 million in the first quarter of 2010 due in part to weather-related outages and necessary maintenance. However, with the 26,000 barrel per day increase in product sales, operating cost fell on a per barrel basis to $4.24 per barrel, down from $4.44 in the first quarter of the prior year.The El Dorado Refinery has seen good results from the new Gofiner gasoil hydrotreater, which we installed at the end of 2010. And Jim will have more discussion on the light product yield improvements from that project later in this call. The Cheyenne Refinery accomplished the FCC and out key turnarounds during April and is returning to full utilization this week. Cheyenne will be completing the science for its LPG recovery project in the third quarter and remains on course to complete the final phases of the profitability improvement initiative by year end. Today at the second quarter, Frontier continues to experience advantage crude pricing caused by the surplus of mid-continent crude relative to takeaway capacity. The average spread between WTI and the Gulf Coast equivalent barrel LLS was over $13 in the first quarter and is nearly $16 in the second quarter to date. While the average spread between our heavy sour barrel WTS and the Gulf Coast equivalent my end [ph] barrel was over $17 in the first quarter and is about $14 quarter to date. Read the rest of this transcript for free on seekingalpha.com