PBF Energy Q2 2025 Earnings Report

PBF Energy EPS Results

• Actual EPS: -$1.03
• Consensus EPS: -$1.19
• Beat/Miss: Beat by +$0.16
• One Year Ago EPS: -$0.54

PBF Energy Revenue Results

• Actual Revenue: $7.48 billion
• Expected Revenue: $6.65 billion
• Beat/Miss: Beat by +$830.08 million
• YoY Revenue Growth: -14.40%

PBF Energy Announcement Details

• Quarter: Q2 2025
• Date: 7/31/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, July 31, 2025
• Conference Call Time: 8:30AM ET

PBF Energy (NYSE:PBF), Inc. is an independent petroleum refiner organized in 2008 and headquartered in Parsippany, New Jersey. The company began trading on the New York Stock Exchange in July 2012 under the ticker symbol PBF. Since its formation, PBF Energy has grown through acquisitions and operational optimization, positioning itself as a leading supplier of refined petroleum products in the United States.

The company owns and operates five refineries located along the U.S. Gulf Coast, East Coast and in the Pacific Northwest, with a combined crude oil processing capacity of approximately 900,000 barrels per day. These facilities convert a broad slate of domestic and imported crudes into a range of fuels and specialty products, including unleaded gasoline, ultra-low sulfur diesel, jet fuel, heating oil, asphalt and other petrochemical intermediates.

Complementing its refining operations, PBF Energy sponsors PBF Logistics LP, a publicly traded master limited partnership that owns and manages pipelines, storage terminals and marine docks. This logistics platform helps secure feedstock supply and product off-take, enhancing the company’s ability to deliver refined products to wholesale customers, distributors and regional markets throughout the United States.

Leadership at PBF Energy is anchored by Thomas J. Nimbley, who has served as President and Chief Executive Officer since January 2015. Under his stewardship, the company has focused on streamlining operations, reducing costs and expanding its asset footprint to capture margin opportunities across varied market conditions.

PBF Energy Q2 2025 Earnings Call Transcript

Key Takeaways

• Negative Sentiment: The Martinez refinery full restart is now expected by year‐end after expanded rebuild scope and permit timing delays, extending downtime and costs.
• Positive Sentiment: PBF’s Refining Business Improvement initiative is on track to exceed its $230 M 2025 and $350 M 2026 run‐rate savings targets, with $125 M already implemented.
• Positive Sentiment: Diesel margins remain strong as global distillate supply/demand balances are in deficit, and low inventories support attractive cracks and restocking challenges for refiners.
• Positive Sentiment: With 2.0–2.5 MMbpd of heavy barrels returning into the market this autumn, light‐heavy crude spreads should widen in Q3/Q4, lowering feed costs and boosting refining margins.
• Positive Sentiment: PBF received a $250 M insurance payment for the Martinez incident, recording a $189 M gain and working with underwriters on additional interim payments to offset related costs.

Presentation

[Operator]

Good day, everyone, and welcome to the PBF Energy Second Quarter twenty twenty five Earnings Conference Call and Webcast. At this time, all participants have been placed in a listen only mode and the floor will be open for questions following management's prepared remarks. Note this conference is being recorded. It is now my pleasure to turn the floor over to Colin Murray of Investor Relations. Sir, you may begin.

[Colin Murray, Vice President, Investor Relations at PBF Energy]

Thank you, Mike. Good morning, and welcome to today's call. With me today are Matt Lucey, our President and CEO Mike Lukowski, our Senior Vice President and Head of Refining Karen Davis, our CFO and several other members of our management team. Copies of today's earnings release and our 10 Q filing, including supplemental information, are available on our website. Before getting started, I'd like to direct your attention to the Safe Harbor statement contained in today's press release.

[Colin Murray, Vice President, Investor Relations at PBF Energy]

Statements that express the company's or management's expectations or predictions of the future are forward looking statements intended to be covered by the Safe Harbor provisions under federal securities laws. Consistent with our prior periods, we'll discuss our results excluding special items, which are described in today's press release. Also included in the press release is forward looking guidance information. For any questions on these items or other follow-up questions, please contact Investor Relations. For reconciliations of any non GAAP measures mentioned on today's call, please refer to the supplemental tables provided in the press release. I'll now turn the call over to Matt Lucey.

[Matthew Lucey, Director, President & CEO at PBF Energy]

Thanks, Colin. Good morning, everyone, and thank you for joining our call. While PBF's second quarter was a marked improvement over the prior few quarters, we definitively see constructive tailwinds ahead, specifically on the crude side. The Martinez refinery was partially restarted in late April. And now with much better discovery, we are working towards a full restart by the end of this year.

[Matthew Lucey, Director, President & CEO at PBF Energy]

The work our team in Martinez is doing is commendable. They continue to work diligently to maintain safe operations and produce much needed products for the California market, while at the same time managing the significant project to restore full operations. The rest of our refining system has largely operated to plan. Second quarter product margins were supported by strong demand, while the light heavy crude differentials continued to be a significant challenge. Close to 4,000,000 barrels of medium and heavy crude were taken off the market between 2022 and 2023 timeframe.

[Matthew Lucey, Director, President & CEO at PBF Energy]

Based on announcements to date and projecting forward, we should see between 2,000,002,500,000 barrels per day coming back by this autumn, which will coincide with seasonal refinery maintenance. With this, we expect to see light heavy spreads widen out as we move deeper into the third and fourth quarters. Looking ahead, the product markets are looking attractive. Diesel in particular looks quite strong. Global distillate supply and demand balances remain in deficit.

[Matthew Lucey, Director, President & CEO at PBF Energy]

And with low inventory, distillate cracks should remain supported. With already high refinery utilization, it will be difficult for distillates to restock with continuing strong demand. Longer term, we continue to see incremental product demand growth exceeding net refining capacity additions. Recent research indicated only approximately 500,000 barrels a day of net refinery capacity additions in 2025. This does not keep up with growing global demand.

[Matthew Lucey, Director, President & CEO at PBF Energy]

And as we have seen, capacity rationalization can happen quickly and unexpectedly. We are seeing more rationalizations than expected in 2025 and 2026 with fewer new additions as we look further out. Europe recently lost 113,000 barrel a day Lindsay refinery in The UK, and we still have the pending shutdowns of Field 66 Los Angeles and Vallaro's Venetia plant over the next ten months or so. This is a constructive setup for the global refining environment. PBF remains focused on controlling the aspects of our business that we can control.

[Matthew Lucey, Director, President & CEO at PBF Energy]

As Mike will update shortly, I'm very pleased with our progress on the business improvement initiatives that we've initiated. This effort will result in improved efficiency and reliability across our system, which should, in turn, drive superior refining performance. To be successful and enhance value for our investors, we must operate safely, must operate reliably and responsibly, but we must do it as efficiently as possible. With that, I'll turn the call over to Mike Bukowski for comments on operations.

[Michael A. Bukowski, SVP & Head - Refining at PBF Energy]

Thank you, Matt. Good morning, everyone. Before updating on the progress we've made on our refining business improvement program, RBI for short, I'll provide a few comments on second quarter operations. On the West Coast, we continue to progress with the full repair and restart of Martinez. We are managing a number of work streams, including running the available elements of the refinery and building the damaged areas.

[Michael A. Bukowski, SVP & Head - Refining at PBF Energy]

At this point, we've completed the demolition of the damaged areas. As we progress through the demolition and deeper into those areas, we identified additional elements that need to be addressed in the rebuild process, which has expanded our previous scope of work and adjusted the timeline to reflect an expected restart by year end. Torrance is currently conducting a hydrocracker turnaround and we expect it to be complete by the September. Aside from a few minor issues, the rest of our system operated reasonably well in the quarter and we have no major turnaround work for the remainder of the year. Shifting topics to RBI.

[Michael A. Bukowski, SVP & Head - Refining at PBF Energy]

Last quarter, we announced that we expected to recognize $230,000,000 of annualized run rate savings by the 2025 and $350,000,000 of run rate savings by the 2026. We are currently on track to exceed those stated targets. We currently have over $125,000,000 of run rate savings implemented so far. The savings will materialize as we implement the programs in refining operating expenses, capital and turnaround budgets and general and administrative expenses. As a reminder, we will realize the full value of these savings in 2026 and a prorated portion in 2025 as we move through implementation.

[Michael A. Bukowski, SVP & Head - Refining at PBF Energy]

We started the process with the East Coast, Torrance, procurement and our top to bottom organizational review from headquarters to the refineries. This is a continuous improvement effort. In addition to the ongoing work streams, we are now working at Martinez and Chalmette to generate additional actionable IDs that will translate to real cost savings. We have a number of positive initiatives going on across our organizations, but our main priority will always be to focus on safe, reliable and responsible operations across our systems. I'll turn the call over to Karen Davis for our financial overview.

[Karen Davis, SVP & CFO at PBF Energy]

Thanks, Mike. For the second quarter, we reported an adjusted net loss of 1.03 per share and adjusted EBITDA of $61,800,000 Our discussion of second quarter results excludes the net effect of four special items, including $30,400,000 in incremental OpEx related to the Martinez refinery incident, a January gain on insurance recoveries, an $8,000,000 gain related to PBF's 50% share of SBR's lower of cost or market adjustment for the quarter, and approximately $13,600,000 of severance and other charges associated with the RBI initiative. The $189,000,000 gain on insurance recoveries related to the Martinez fire is a result of the initial unallocated payment of $250,000,000 that we received from our insurance underwriters in the second quarter. Dollars 61,000,000 of the total proceeds was applied to the insurance receivable that was recorded in Q1, and the remaining $180,000,000 was recorded as a gain on insurance recoveries for the quarter. We expect that we will negotiate additional interim payments.

[Karen Davis, SVP & CFO at PBF Energy]

However, the timing and amount of any agreed upon future payments will be dependent on the amount of covered expenditures that we actually incur plus calculated business interruption losses. Our Q2 P and L reflects incremental OpEx at Martinez of $30,400,000 that we are reflecting as a special item because it relates to construction of temporary equipment to restart undamaged units, costs incurred to address impacts to the fire on the units that were being prepared for turnaround and other fire related impacts. We anticipate recovering a portion of this amount through insurance, but the specific amount of the recovery will be determined as we progress further into the claims process. Generally speaking, any insurance proceeds that we receive in future periods will be reflected as gain on insurance recoveries on our income statement and reported as a special item. Shifting back to our normal quarterly results discussion, also included in our results is a $4,300,000 loss related to PBF's equity investment in St.

[Karen Davis, SVP & CFO at PBF Energy]

Bernard renewables. SBR produced an average of 14,200 barrels per day of renewable diesel in the second quarter after completing a planned catalyst change that began in March and ended in April. Third quarter renewable diesel production is expected to be 16,000 to 18,000 barrels per day. Cash flow from operations for the quarter was $191,100,000 which includes a working capital benefit of approximately $79,000,000 primarily related to an approximately 2,000,000 barrel reduction in inventory during the quarter as compared to March 31 levels when inventories were elevated as a result of the Martinez fire. This benefit was partially offset by a decrease in our payables position.

[Karen Davis, SVP & CFO at PBF Energy]

Also included in our operating cash flow is 118,000,000 of the $250,000,000 in total insurance proceeds received in the quarter. Cash invested in consolidated CapEx for the quarter was $154,700,000 which includes refining, corporate and logistics. This amount excludes second quarter capital expenses of approximately $104,000,000 related to the Martinez incident. Year to date, rebuild capital expenses at Martinez are approximately $132,000,000 Additionally, our Board of Directors approved a regular quarterly dividend of $0.02 $75 per share. We ended the quarter with approximately $590,700,000 in cash and approximately $1,800,000,000 of net debt.

[Karen Davis, SVP & CFO at PBF Energy]

Maintaining our firm financial footing and a resilient balance sheet remain priorities. At quarter end, our net debt to cap was 30% and our current liability, current liquidity is approximately $2,300,000,000 based on cash balances of approximately $590,000,000 and borrowing capacity under our ABL. Our liquidity position is ample. The anticipated receipt of a $70,000,000 tax refund plus the receipt of the proceeds from the pending sale of the Knoxville and Philadelphia terminals that we reported last quarter should bolster our liquidity position further this quarter. As we look ahead, we expect to use proceeds periods of strength to focus on deleveraging and preserving the balance sheet.

[Karen Davis, SVP & CFO at PBF Energy]

Operator, we've completed our opening remarks, and we'd be pleased to take questions.

[Operator]

We will open the call to questions. The company requests that all callers limit each turn to one question and one follow-up. You may rejoin the QE with additional questions. If you would like to ask a question, please press star one on your telephone keypad. You.

[Operator]

Pick up your handset before pressing the star keys. One moment please while we poll for questions. Your first question comes from Doug Leggate from Wolfe Research. Please go ahead.

[Doug Leggate, MD & Senior Research Analyst at Wolfe Research]

Thanks. Good morning, guys. I appreciate you taking my questions. Matt, the cost cutting targets are obviously gathering pace. I wonder if you could help us understand how to track those in terms of where it's going to show up, whether it be capital, operating cost, capture rate, because obviously, $250,000,000 run rate, I guess, it's about $0.75 a barrel, putting material if it's sustainable.

[Matthew Lucey, Director, President & CEO at PBF Energy]

The last you broke up the last second. Is it going to be sustainable?

[Doug Leggate, MD & Senior Research Analyst at Wolfe Research]

Yes. I'm basically saying that I'm trying to understand how we track it. How do we model it? How do we bake it into what we think is a go forward part of your valuation?

[Matthew Lucey, Director, President & CEO at PBF Energy]

I'll pass it over to Mike briefly. Just so we're clear, we are taking extensive steps to make sure that everything that we do is absolutely sustainable and resilient going forward. There is going to be some amount that isn't on the capital side and turnaround side. So it may, at times, be forensically difficult to tick and tie, but we're here to illuminate where it all resides. And so it will be in the dollars per barrel on the OpEx side, but also reduction on the capital side. But Mike, why don't you expand?

[Michael A. Bukowski, SVP & Head - Refining at PBF Energy]

Yes, Doug. Thanks for the question. At a high level, it's about 70% is going to be in OpEx and about 30% is going to be on the capital side. And with regard to I'll explain a little bit more about the sustainability piece and the reliability piece. So we've called this the refining business improvement initiative, not just cost reduction.

[Michael A. Bukowski, SVP & Head - Refining at PBF Energy]

And so sustainability is just as important for us as the cost reductions. And because that's also going to drive business improvement in all facets and operational excellence and our safety performance and our reliability. So for instance, the turnaround capital side, there's extensive processes that we're putting in place that are helping us to optimize our scope when it comes to our sustaining capital, optimize our scope when it comes to turnarounds, improve our productivity when it comes to turnarounds and optimize our intervals. And so to making sure that where we spend our capital, we get the biggest bang for our buck with the highest return from a reliability perspective. Those things will drive sustainability.

[Michael A. Bukowski, SVP & Head - Refining at PBF Energy]

On the OpEx side, every initiative that's put in place has a sustainability plan. And so in other words, it's a set of KPIs. We're using some technology to help get that information out into the refineries. And so that those initiatives and those KPIs will be tracked on a routine basis. Some will be tracked on a daily basis depending upon what they are.

[Michael A. Bukowski, SVP & Head - Refining at PBF Energy]

Some will be tracked on monthly basis. But we will know where we are going forward and be able to keep our eye on the ball. And it also is a springboard for continuous improvement because we don't see this initiative really ever ending. It's just the start of a continuous improvement exercise.

[Doug Leggate, MD & Senior Research Analyst at Wolfe Research]

I appreciate it, guys. Thank you. So just to be clear, Mike, there's nothing in the capture rate. This is all OpEx OpEx and CapEx, I mean?

[Michael A. Bukowski, SVP & Head - Refining at PBF Energy]

This initiative so far is focused on OpEx and capital. Nothing in the capture rate.

[Doug Leggate, MD & Senior Research Analyst at Wolfe Research]

Got it. Thank you. Matt, I wonder if I could also just ask you to follow-up on your comments about the light heavy differential. Obviously, as you pointed out, there's supposedly a bunch of new barrels coming back onto the market. Chevron's back in Venezuela again.

[Doug Leggate, MD & Senior Research Analyst at Wolfe Research]

And but the punch line is we haven't seen the physical barrel show up. Are you seeing evidence of light heavy spreads widening on your feedstock opportunities or no?

[Matthew Lucey, Director, President & CEO at PBF Energy]

I think we're just starting to see it now. I'd sort of just back up. And when you think about light heavy differential and sort of the disruptions to the market, whether they were voluntary or involuntary through OPEC or other geopolitical events, there's been no refining company that's been impacted more than That's the bad news. The good news is going forward as these things correct and these barrels come back in the market, there's no bigger beneficiary of those that differential widening out. And so when I take a look at the refining market, the first thing you look at and the first thing you want to see is reasonable demand and that resides in attractive cracks, which we have.

[Matthew Lucey, Director, President & CEO at PBF Energy]

So I think the backdrop on and the real driver of the business on the demand side looks good and constructive. The big flywheel for PBF and a huge tailwind going forward as these barrels come into the market will be lowering our cost of feed, which has a dollar for dollar impact to our bottom line. But Tom, do you want to talk about specifics?

[Thomas O'Connor, SVP - Commodity Risk and Strategy at PBF Energy]

Doug, it's Tom. I mean just to expand a little bit, I mean, I think in terms of why it's been masked at this point is just really kind of a seasonality, right? We've got very high run environment and also combined with seasonal demand for crude and fuel burn in The Middle East. So as production has been increasing, it hasn't necessarily turned into increased exports yet. Certainly, our expectation is that, that would be seen in the next few waterborne trade cycles as we proceed into there.

[Thomas O'Connor, SVP - Commodity Risk and Strategy at PBF Energy]

And it obviously combines with just the seasonal aspect that turnarounds will start commencing in that time frame as well.

[Operator]

Your next questions come from Neil Mehta from Goldman Sachs. Please go ahead.

[Neil Mehta, Head - Americas Natural Resources Equity Research at Goldman Sachs]

Yes. Good morning, Matt and team. Thanks for all the color here. I just want to spend some time on the Martinez refinery. You got limited operations that were restored in the second quarter, but you talk a little bit about the path to restart different units.

[Neil Mehta, Head - Americas Natural Resources Equity Research at Goldman Sachs]

And so can you just go through the logistics between now and year end? What are the gating items? What are the things that we critical path items that we as an investment community should be monitoring?

[Michael A. Bukowski, SVP & Head - Refining at PBF Energy]

So first of all, thanks, Neil, the question. First of all, I just want to do a shout out to the Martinez folks. I mean, they've done tremendous work to be able to recover and get the units back up safely. And then all through the work that we've done so far with the demolition and clearing the getting access to the area has been done extremely well. So I just wanted to share that.

[Michael A. Bukowski, SVP & Head - Refining at PBF Energy]

So that actually was the first milestone was getting the demolition done and we're finished with that. And it's given us a clear pathway to understand and finalize the scope. We have some additional scope items that we need to finish. Most of our all of our long lead procurement activities have been completed at this point. We actually finished that prior to demolition because we knew kind of immediately what they were.

[Michael A. Bukowski, SVP & Head - Refining at PBF Energy]

We are starting to see some pressure on some of those delivery timings, which has added to our concern and has forced us to push that back start up time towards the end of the year. But we continue to monitor that on a continuous basis. We started operations like the civil work and we actually started receiving some modules and equipment and we're getting close to being ready to install them. And so we're just in the mode right now. This is not a normal project as you can understand.

[Michael A. Bukowski, SVP & Head - Refining at PBF Energy]

We're doing things in parallel as much as possible. So I'd say the next major milestone for us is the start of the major construction activities.

[Neil Mehta, Head - Americas Natural Resources Equity Research at Goldman Sachs]

That's really helpful. And then just in terms of some of those gating items, I guess you talked about regulatory permitting and approvals. Can you just remind us again what those are? And then the certain critical equipment and components, it sounds like based on the comments that you just made, some of those are coming to the site. But again, remind us what those are as well.

[Michael A. Bukowski, SVP & Head - Refining at PBF Energy]

So on the regulatory side, it's essentially a permit to operate, which is a typical permit for any project of this size. And we've maintained a real strong relationship with the Air District in the Bay Area, and they are working with us hand in glove to understand what we're understanding what their requirements are to give us a temporary approval to construct and we're making sure that we meet those requirements. And so we expect to get that permit very soon, which will allow all major activities to start. And again, our relationship has been really strong with that. In terms of the long lead items, I mean, there's it's like a handful of things, but they were driving schedule.

[Michael A. Bukowski, SVP & Head - Refining at PBF Energy]

I mean, ultimately, it comes down to some major process vessels and some major rotating equipment pieces of rotating equipment. But like I said, we knew based on where the damage was immediately where they were, and we got them on order real quick within about six weeks of the fire.

[Neil Mehta, Head - Americas Natural Resources Equity Research at Goldman Sachs]

Great. And then my follow-up is just around Delaware City. You guys have excess real estate. There's talk about potentially given the power length there, is that a natural place to build data centers and so on. So just your perspective on that? Is that something that we as an investment community should spend the time of?

[Matthew Lucey, Director, President & CEO at PBF Energy]

Thanks, Neil. Well, we've been talking about for quite some time. We're blessed with tremendous amount of land around our Delaware City refinery that has not been commercialized and it has not the value of which has not been maximized. And as everything we own, we want to maximize the value of it. So as I've discussed in the past, we're looking at ways to do just that.

[Matthew Lucey, Director, President & CEO at PBF Energy]

And we're exploring opportunities and to the extent that we can maximize value there, we're absolutely going to look to do it. And so we've been working with some counterparties, with some subject matter experts. And I do believe there's going to be an opportunity to really create win win win where you can have incremental investment, incremental jobs and incremental value created around a refinery in Delaware.

[Neil Mehta, Head - Americas Natural Resources Equity Research at Goldman Sachs]

Thanks, Matt.

[Operator]

You. Your next question comes from Manav Gupta from UBS. Please go ahead.

[Manav Gupta, Executive Director at UBS Group]

Hi, guys. So my first question is around the cash position. And I'm trying to understand, it looks like you did not burn any cash in 2Q. But going ahead 3Q, by the time you actually restart the refinery, what could be the cash position? And do you expect to be, within your means in terms of not look looking to raise more debt or any other form of financing?

[Manav Gupta, Executive Director at UBS Group]

And can you continue to work within the means by year end? Because most likely by year end, once Martinez comes back, you should be fine.

[Karen Davis, SVP & CFO at PBF Energy]

Thank you for the question Manav. We are always looking at ways to properly capitalize our company. And the $800,000,000 unsecured notes offering that we did earlier in the year, we think has positioned us well. We do believe that we have ample liquidity going forward. Our current net debt position is at 30%.

[Karen Davis, SVP & CFO at PBF Energy]

Or I'm sorry, net debt to cap position. We target being under 35%. At the moment, our cash burn, as you saw in the first quarter, was fairly neutral. So we believe we are well positioned to weather what comes.

[Matthew Lucey, Director, President & CEO at PBF Energy]

I'll just add that the relationship and the working relationship with the insurance market and providers has been very constructive so far. And so we've got a whole team that works with them hand to glove. And so any working capital swings as a result of expenditures and receipts from the Martinez project is mitigated to some degree to the extent that we can continue working as collaboratively as we have with the insurance providers.

[Manav Gupta, Executive Director at UBS Group]

Thank you. And going back a little, I think Leaf didn't miss this one, but there was a filing on Starboard Digital Ventures. Looks like they are looking to build a massive data center. And one of the companies they're working with is Newcastle campus development, which is an entity linked to you. So I'm just trying to understand this filing a little better, what opportunities it creates for you guys, and would you be only the land provider?

[Manav Gupta, Executive Director at UBS Group]

Could you be also providing some electricity? How can you collaborate with Starwood to bring forward this project? Thank you.

[Matthew Lucey, Director, President & CEO at PBF Energy]

Thanks. As I said, we're exploring ways which we can maximize value for our shareholders. We have been working with Starwood, who has been an excellent subject matter expert. They've done such projects in the past. We don't have anything formal to announce at the moment.

[Matthew Lucey, Director, President & CEO at PBF Energy]

But we'll continue to develop opportunities at Delaware and do it in a way in which we can, like I say, absolutely drive the best value for our shareholders. And so we are actively working that project, but we don't have anything definitive to report at this time.

[Manav Gupta, Executive Director at UBS Group]

Thank you so much.

[Operator]

Thank you. Your next question comes from Brian Todd from Piper Sandler. Please go ahead.

[Ryan Todd, MD & Senior Research Analyst at Piper Sandler Companies]

Great, thanks. Maybe one on the West Coast after a very strong second quarter margins on the West Coast have softened a little bit of late. Can you maybe talk about what you're seeing in terms of market dynamics there in the Western Half Of The U. S. And any outlook from there going forward?

[Matthew Lucey, Director, President & CEO at PBF Energy]

Yes. Again, from a very high level. And we're just in the midst of a refinery shutting down in Los Angeles that I think will sort of happen over the next six, eight weeks. Indeed, I think we're actually having some new employees from that facility. But structurally looking at California sort of in a post LAR shutdown, even ignoring the reduction from Martinez, you're going to be short gasoline by upwards of 150,000 barrels a day.

[Matthew Lucey, Director, President & CEO at PBF Energy]

And then other announced closure in San Francisco will increase that by another 100,000 barrels a day. It's upwards of 250,000 barrels a day. When you rely on imports, they do not come in perfectly ratable. And so you do have periods where significant amount of product is brought in and so you have a little bit of a up and down where the market has to escalate to a point where it's going to attract those imports. And then they'll arrive in sort of a large size and then it brings the market off.

[Matthew Lucey, Director, President & CEO at PBF Energy]

Going forward, it's our belief that the market is going to be very constructive just based on the amount of product that they have to import, That our refineries are very well positioned to be the low cost provider for California who will be desperate to be able to attract the fuels necessary for their society to prosper as it has. So I think California is set up in a very constructive manner. Paul, do you want to talk to the micro in regards to what we're seeing now?

[Paul Davis, Senior Vice President of Supply, Trading & Optimization at PBF Energy]

Yes, sure. I mean, Ryan, I mean, you take a look at what came in during the second quarter, it's about 120,000 barrels a day of products. That's about where the market's short currently with all the refinery activity that's going on. But Matt mentioned it, right? It comes in all at once and then it bleeds into the systems across a given month.

[Paul Davis, Senior Vice President of Supply, Trading & Optimization at PBF Energy]

And so there's a tremendous amount of pricing volatility that that we see in that marketplace because of that. Ours are opening and closing based on that volatility. So aside it just as an example, I take a look at August, we're gonna have a very limited import market into the state during the course of August because of the closed arbitragers, to support, you know, the business there. End of the day, the market's gonna price itself the balance. We we anticipate that.

[Paul Davis, Senior Vice President of Supply, Trading & Optimization at PBF Energy]

It costs a lot of money to bring products into that state from from abroad. Molecules will show up. They will they will get there, but it will it will be an expensive adventure for everybody to balance.

[Ryan Todd, MD & Senior Research Analyst at Piper Sandler Companies]

Great. Thank you. And then maybe one question on on the renewable diesel side. Can you talk about during during the second quarter, how much were you able to monetize in terms of in terms of credits from the PTC? And should we expect further tailwinds from that as we look into the 2025? And maybe any any broader thoughts on what you're seeing in terms of, the macro on the near term there on renewable diesel?

[Karen Davis, SVP & CFO at PBF Energy]

Hi, Brian. We don't give details on on specific credits. I will tell you that we did approve, 45 z revenue to during both the the first and the second quarters based on the preliminary treasury guidance and in conjunction with our qualifying sales of renewable diesel. What we did see in Q2 though is with RINs pricing increasing, we did come close to offsetting the decline in revenue from BTC to PTC switch.

[Ryan Todd, MD & Senior Research Analyst at Piper Sandler Companies]

Okay. Great. Thank you.

[Operator]

Thank you. Your next question comes from Joe Wyatt from Morgan Stanley. Please go ahead.

[Joe Laetsch, Executive Director - Energy Equity Research at Morgan Stanley]

Hey, good morning, Matt and team. Thanks for taking my questions. So on the California landscape, can you talk to how recent discussions have been with the state? It seems like at least from a headline perspective, government officials have begun to realize the importance of refined product and impact of upcoming refinery closures. Thank you.

[Matthew Lucey, Director, President & CEO at PBF Energy]

Yeah. You could be more spot on in that regard and it's the famous, you know, nothing focuses in line like a pending crisis, I guess. But quite honestly, our outreach with the state of California over the last couple years, there's been a definitive shift and it's been a real focus for us. Quite honestly, we've been spending a fair amount of time over the last couple of years simply trying to educate all the different sort of regulatory agencies and groups that you work with within the state, not only the importance of our products, but also the costs of what market disruptions look like and such. And so there has been some constructive dialogue with the state.

[Matthew Lucey, Director, President & CEO at PBF Energy]

I think there's some of it has yet to be proven. Nice conversations are nice, but actual reality is an important thing. And so as the legislature sort of works through some things in August, as the governor's staff works through things and the CEC and all the different constituents, I think there is a recognition of the potential crisis that lies ahead. And we, as I said, work with them very, very closely. I've been pleased with the collaborative nature of that discussion.

[Matthew Lucey, Director, President & CEO at PBF Energy]

It does have to result in tangible improvements and that still lies ahead.

[Joe Laetsch, Executive Director - Energy Equity Research at Morgan Stanley]

Thanks, Matt. That's helpful. And then shifting gears a little bit, there's been several refinery closures that have occurred or been announced in Europe. Could you give your perspective on the East Coast market here and implications that you're seeing on Transatlantic flows? Thank you.

[Matthew Lucey, Director, President & CEO at PBF Energy]

Yes. It's a developing story to some degree, but we've seen a real drop off in imports from Europe where historically PADD one was a dumping ground. Europe would send product to The US East Coast because they needed to get rid of it. And now it would appear that The U. S.

[Matthew Lucey, Director, President & CEO at PBF Energy]

East Coast has to elevate to a point to attract barrels as opposed to simply receiving them regardless of the market. So to say it's a developing story is somewhat of an understatement. We had that refinery in The UK shutter just last over the last couple of weeks. That was somewhat of a surprise. But yes, it's there's the tides are shifting to a great deal, whether you're talking about California or Europe.

[Matthew Lucey, Director, President & CEO at PBF Energy]

And we've seen much less imports coming over from Europe recently.

[Joe Laetsch, Executive Director - Energy Equity Research at Morgan Stanley]

Great. That's helpful. Thank you.

[Operator]

Thank you. Your next question comes from Paul Cheng from Scotiabank. Please go ahead.

[Paul Cheng, Analyst at Scotiabank]

Hey, guys. Good morning. Hey, Matt, on the RPI, if we look at trying to put you together and see how that is going to look like in your refining OpEx going forward. And so can you give us some idea that by the end of this year, what will be a reasonable refining OpEx we can assume using a $4 natural gas price? And by the end of 02/2006, what that number may look like? That's the first question.

[Matthew Lucey, Director, President & CEO at PBF Energy]

Well, I think Mike alluded to it before. If you take what we're saying is run rate savings, dollars $240,000,000, 70% should reside in OpEx.

[Paul Cheng, Analyst at Scotiabank]

And that but I mean, is there any other factor that offsetting like the inflation and all the other factor that we should take So you think that that would be a net saving on that?

[Matthew Lucey, Director, President & CEO at PBF Energy]

Yes.

[Paul Cheng, Analyst at Scotiabank]

Okay. Second question real quick on SBIO is a little bit surprised that you will be targeting thousand to 18,000 barrel per day run. Given the current market condition, I think a lot of your competitor is talking about reduced run. So trying to understand that what is the rationale behind and how the decision making process on that?

[Matthew Lucey, Director, President & CEO at PBF Energy]

It's no different than anything else we run. We run to maximize profit. And so you can't look at all RD manufacturing the same. Obviously, your location plays a significant part of it. And so one of the things that we touted when we got SPR off the ground was the optionality that exists for the plant with its location in the Gulf Coast and specifically at the mouth of the Mississippi River.

[Matthew Lucey, Director, President & CEO at PBF Energy]

And so for us, we have great optionality in regards to feedstocks and then also great optionality in regards to where the product is destined coming out of the plant. We completed a catalyst change in Q2. And so every day in the third quarter, we'll run to an optimized economic outcome. And, you know, as you said, you have estimate our going forward.

[Paul Cheng, Analyst at Scotiabank]

Hey, Matt. Are you guys making money right now in SPR?

[Matthew Lucey, Director, President & CEO at PBF Energy]

It's it's I would characterize it as somewhat breakeven.

[Paul Cheng, Analyst at Scotiabank]

I see. Okay. Thank you.

[Matthew Lucey, Director, President & CEO at PBF Energy]

I mean the market is and there's obviously a longer RFS story, but you've had a big uptick. RINs have essentially doubled, but feedstock costs have gone up. And then you've got much of unanswered questions on the RFS side as one could possibly imagine.

[Paul Cheng, Analyst at Scotiabank]

Thank you.

[Operator]

Thank you. Your next question comes from Conor Fitzpatrick from Bank of America. Please go ahead.

[Conor Fitzpatrick, Vice President at Bank of America Merrill Lynch]

Hi, everybody. I wanted to follow-up on The U. K. Closures, specifically Rangemouth and now Lindsay. Between the two refineries, Transatlantic capacity should be down about 57 kbpd of FCC capacity and 12 kbpd of calculation, which are similar numbers to the capacity you have idling at Paulsboro.

[Conor Fitzpatrick, Vice President at Bank of America Merrill Lynch]

Do you think the option to restart those units has become more attractive? VGO feed cost was a barrier last time this possibility was discussed in, I think, 2022, but that cost has eased a bit since then. And are there other opportunities to take advantage of PADD one tightness?

[Matthew Lucey, Director, President & CEO at PBF Energy]

At the moment, we're not exploring a restart of units at Paulsboro. We're happy with the system and the equipment we have in place. Obviously, as markets develop, we can look at things in the future. But as of right now, we're we're not evaluating the restart of any units.

[Conor Fitzpatrick, Vice President at Bank of America Merrill Lynch]

And what's your decision making? What's the what are the leading factors for not looking into that?

[Matthew Lucey, Director, President & CEO at PBF Energy]

I didn't say we're not looking into it. I said that we don't have any plans to restart it at the moment. We always evaluate every option that we have, but we have no intention at the moment to restart those units. As markets evolve, other assets that we own and to the degree that they can be optimized and create long term value, we'll certainly look to do that.

[Operator]

Thanks. That's all I had. Thank you. Your final question comes from Jason Gabelman from TD Cowen. Please go ahead.

[Jason Gabelman, MD - Energy Equity Research at TD Cowen]

Yes. Hey, good morning. Thanks for taking my question. I wanted to ask on the sequencing of insurance proceeds and just make sure I understand it correctly. It looks like on the cash flow from investing side, insurance is going to offset on a one to one basis, capital expenditures to fix Martinez.

[Jason Gabelman, MD - Energy Equity Research at TD Cowen]

But then can you just kind of describe on the cash from operating side, the insurance proceeds that come in? How much has come in so far to cover the past quarter's lost profit opportunity? And then should we expect to see that roll in on kind of a one quarter in arrears basis?

[Matthew Lucey, Director, President & CEO at PBF Energy]

Yeah, I would answer it a couple of different ways. So one, we received $250,000,000 in the second quarter. That essentially amounts to $280,000,000 because we retained the first $30,000,000 It is a fool's errand to try to go through and forensically dissect the property versus the business interruption. I would characterize our collection from insurance to our economic cost of the incident as not being ahead or behind. And you have aspects of the property side and aspects of the business interruption side.

[Matthew Lucey, Director, President & CEO at PBF Energy]

And so it's one policy with two discrete ways of calculating sort of loss, but we're not going to be able to sort of forensically dissect. Well, this is for business interruption and this is for property. It's like I said, it's one policy. And from a a very high level, I would say, to date, our collections have have sort of matched the the impact from the incident.

[Jason Gabelman, MD - Energy Equity Research at TD Cowen]

Okay. So is it fair to say in totality, the inflows on one quarter delay should kind of cover those two buckets, the lost profit and the capital component?

[Matthew Lucey, Director, President & CEO at PBF Energy]

We're working with the insurance company. Obviously, we got a payment last quarter. There's not definitive guidelines in regards to must pay dates with the insurance policy. But like I said, we've been working collaboratively with them and we expect to receive interim payments as we did in the second quarter going forward.

[Jason Gabelman, MD - Energy Equity Research at TD Cowen]

Okay. That was it for me. Thanks.

[Operator]

Thank you.

[Matthew Lucey, Director, President & CEO at PBF Energy]

Have a Please

[Operator]

go ahead.

[Matthew Lucey, Director, President & CEO at PBF Energy]

Yes. I think I was going we were to say the same thing, which is we've reached the end of the question. So I greatly appreciate it. As I said, we look forward to bright days ahead. We're very encouraged with obviously on the product side, but going forward, it looks like the crude side will be much more beneficial.

[Matthew Lucey, Director, President & CEO at PBF Energy]

So we appreciate everyone's attention. Look forward to talking to you next quarter. Thank you.

[Operator]

This concludes today's conference, and you may disconnect your line at this time. Thank you for your participation.

Participants

Executives

• Colin Murray, Vice President, Investor Relations
• Matthew Lucey, Director, President & CEO
• Michael A. Bukowski, SVP & Head - Refining
• Karen Davis, SVP & CFO
• Thomas O'Connor, SVP - Commodity Risk and Strategy
• Paul Davis, Senior Vice President of Supply, Trading & Optimization

Analysts

• Doug Leggate, MD & Senior Research Analyst at Wolfe Research
• Neil Mehta, Head - Americas Natural Resources Equity Research at Goldman Sachs
• Manav Gupta, Executive Director at UBS Group
• Ryan Todd, MD & Senior Research Analyst at Piper Sandler Companies
• Joe Laetsch, Executive Director - Energy Equity Research at Morgan Stanley
• Paul Cheng, Analyst at Scotiabank
• Conor Fitzpatrick, Vice President at Bank of America Merrill Lynch
• Jason Gabelman, MD - Energy Equity Research at TD Cowen