Previous Statements by WNR
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And then the other business we have is a retail business about 206 retail stores throughout the Southwest, mostly concentrated in the Four Corners region of the Southwest. Again, we view it as an outlet, a ratable outlet for our refined product everyday to sell it. We also have an asset idled now in Yorktown, Virginia, a refining asset. We idled it a little over a year ago. We've been in conversations to dispose of that asset. I'll talk about that a little bit. We still have a wholesale marketing business in the Mid-Atlantic, where we are selling about 35,000 barrels a day to our customers of refined product in the Mid-Atlantic region. So, that's our asset base. The major markets we serve, the cities we serve are El Paso and Juarez, Mexico and Northern Mexico, Flagstaff, Albuquerque, Phoenix, and Tucson. That's basically our markets. So, we are a smaller independent refining company.Next page is an infrastructure of the product disposition in the Southwest. So, what I show on here are all the product pipelines that gives refined product, where it needs to go throughout the Southwest. And why we think this is important is because of the location of our two refineries. We think we are in pretty good location geography wise to serve the markets we are in versus our competitors, because as you can see all these product pipelines are falling from east to west all product or the majority of product passes through El Paso before it goes to Tucson and Phoenix. And why that's important is because a number of these markets that we serve have very difficult gasoline specifications. A gallon of gasoline sold in Phoenix is not the same as a gallon of gasoline sold in Tucson or Flagstaff. And that helps us from a location advantage, because we can blend components into a gallon of gasoline and supply that gallon better and more efficiently perhaps than some of our competitors in West Texas or on the Gulf Coast. So, we like these assets, the logistics nature of these assets, the location of these assets.
Again, hard to read, you can see it better in the pages in front of you, but Macquarie Bank does a regular quarterly ranking, this is all publicly available information of all the independent refineries out there that publish by refinery operating margins. So, this is gross margin minus operating cost on a per barrel basis. And you can see that over the last two years we have ranked pretty high towards the top of the list. The interesting thing about this list though is that if you have been in this industry or following this industry for a while, the old paradigm was the refineries that were based on a coast, access to water-borne crudes, big complex refineries, those were the refineries that we are going to make money. And those smaller refineries, inland, difficult to access, those were the refineries that we are going to go out of business or struggle.And clearly, that's not the case over the last couple of years. The refineries that make money today in good margins sit on top of their crude source are basically inland refineries, very little coastal refineries, have reasonable operating costs and have interesting little niche markets for which they service. That's the commonality that we see for the refineries that are posting good margin results today. So, that's a little bit about the company and our asset base. Read the rest of this transcript for free on seekingalpha.com