Par Pacific Holdings, Inc.

Good morning and welcome to the PAR Pacific first quarter 2022 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. To withdraw from the question queue, please press star then two. Please note this event is being recorded. I would like to turn the conference over to Ashimi Patel, Director of Investor Relations. Please go ahead.

Thank you, Kate. Welcome to Power Pacific's first quarter earnings conference call. Joining me today are William Pate, President and Chief Executive Officer, Richard Creamer, EVP of Refining and Logistics, Matt Vaughn, EVP of Retail, and Will Monteleone, Chief Financial Officer. Before we begin, note that our comments today may include forward-looking statements. Any forward-looking statements are subject to change and are not guarantees of future performance or events. They are subject to risks and uncertainties, and actual results may differ materially from these forward-looking statements. Accordingly, investors should not place undue reliance on forward-looking statements, and we disclaim any obligation to update or revise them. I refer you to our investor presentation on our website and to our filings with the SEC for non-GAAP reconciliations and additional information. I'll now turn the call over to our President and Chief Executive Officer, Bill Pate.

Bill Pate Thank you, Ashimi. Good morning, everyone. Our first quarter adjusted EBITDA was $8 million, and adjusted net loss was 53 cents per share. These results included a $5 million non-cash mark-to-market expense for our 2019 and 2020 RFS compliance. First quarter results reflected lost profit opportunities associated with our Washington turnaround the impact of rapidly rising crude oil prices in Hawaii and off-season conditions in Wyoming. Market conditions improved significantly in the second quarter. With the Washington turnaround behind us, we're focused on maximizing production in a highly profitable market environment. Over the past two months, refined product cracks surged to all-time highs due to increasing physical crude costs, increasing demand, and reduced supply from Russia. In addition, record natural gas prices have driven up production costs for refineries reliant on natural gas for utilities and hydrogen. Consequently, the April Singapore 312 Index is well above historical norms, averaging almost $30 per barrel, compared with a 2021 average of $6.22 per barrel. Cracks are also at high levels in Wyoming and Washington. The war and related trade sanctions sparked rapid increases in crude oil prices during the first quarter and then stabilized above $100 per barrel during April. Higher prices have increased steam and electricity expenses and consequently our refinery production costs. Market structure continues to be highly backwardated, which offsets a portion of the record product cracks. Notwithstanding these adverse impacts, all our refinery units are currently highly profitable Several of the factors affecting our first quarter capture rate in Hawaii and Washington have improved as oil prices stabilized and our refinery throughput increased. With sales volumes up, our logistics systems are also generating strong profits. We made considerable progress this quarter on our organic growth capital initiatives. In conjunction with the turnaround in Washington, several units were de-bottlenecked and the refinery is operating at record throughput levels. We also completed work in Wyoming that should allow us to run at record levels this summer. We're completing the engineering for co-feeding in Washington to create renewable production optionality as the low-carbon fuel standard and cap-and-trade regulations emerge in that state. We also view this capability as a hedge against rising RIN prices. We were pleased with the recent EPA decision, recognizing that delayed decisions on small refinery exemptions have a significant adverse impact on petitioners although we did not agree that the agency should reverse prior grants of relief. The EPA should recognize the adverse impact of delayed decision-making as it considers our outstanding 2019 and 2020 SRE petitions. In closing, I want to introduce Richard Creamer, our new Executive Vice President of Refining and Logistics. Richard has a wealth of experience in refining and petrochemical operations and management. He joins us from HF Sinclair, and previously worked for Flint Hills Resources, Lyondell, and Invista. He also served a four-year stint with us as the head of our Hawaii refining operations. We're delighted to have him rejoin us. Richard, welcome back.