Frontier Oil Reports Profitable First Quarter 2002
James R. Gibbs, Chairman, President, & CEO, said, "We are pleased to report a profit in spite of very difficult market conditions as crack spreads were much weaker than last year and crude oil differentials were less than half their 2001 levels. We believe this was caused by OPEC production cuts, which tend to most affect sour heavier crude oils. Although we do not expect crude oil differentials to improve significantly in the near term, we do believe they will return to much higher levels when OPEC increases oil production. We were partially able to offset the lower product margins and weak crude oil differentials with significantly lower operating expenses and higher sales volumes at both refineries."
The light/heavy crude oil spread was $3.75 per barrel for the first quarter of 2002 compared to $8.20 for the same period in 2001. The WTI/WTS crude oil spread was $1.53 for the first quarter of 2002 compared to $3.73 for the first quarter of 2001. Operating expenses decreased to $3.64 per sales barrel at Cheyenne from $4.17 for the first quarter of 2001, while at El Dorado operating expenses decreased to $2.92 from $4.10 for the first quarter of 2001. Total sales barrels at Cheyenne increased to 40,530 barrels per day (bpd) for first quarter 2002 from 36,497 bpd for the first quarter of 2001. At El Dorado, sales barrels increased to 113,349 bpd in the first quarter of 2002 from 102,272 bpd for the same period 2001.
Gibbs continued, "These short-term conditions are expected from time to time and do not temper our optimistic longer term outlook for our industry or our Company. Gasoline margins have already improved. We anticipate that distillate margins will improve later on in the year as the inventory overhang declines, and that oil price differentials will widen sometime afterward."
A conference call is scheduled for this afternoon at 2 p.m. (EDT). To access the call, which is open to the public, please dial (800) 997-8642 several minutes prior to the call. For those individuals outside the United States, please call (973) 694-6836. A recorded replay of the call may be heard through May 14, 2002 by dialing (800) 428-6051 (international callers (973) 709-2089) and entering the code 239353. In addition, the real-time conference call and a recorded replay will be webcast by PR Newswire. To access the call or the replay via the Internet, go to http://www.frontieroil.com and register from the Investor Relations page of the site.
Frontier operates a 110,000 barrel-per-day refinery located in El Dorado, Kansas, and a 46,000 barrel-per-day refinery located in Cheyenne, Wyoming, and markets its refined products principally along the eastern slope of the Rocky Mountains and in other neighboring plains states.
CONTACT: Doug Aron of Frontier Oil Corporation,