HOLLYFRONTIER 2017 ANALYST DAY December 7, 2017 W E L C O M E Craig Biery Director, Investor Relations Disclosure Statement Statements made during the course of this presentation that are not historical facts are "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are inherently uncertain and necessarily involve risks that may affect the business prospects and performance of HollyFrontier Corporation and/or Holly Energy Par ...

The near-term outlook for the Zacks Industrial Services ndustry appears encouraging, supported by rising e-commerce activity and a recent uptick in the production index. Industry participants are focused on strategic pricing, cost-reduction initiatives and enhancing productivity and efficiency to boost margins.Companies such as Siemens (SIEGY) , MSC Industrial Direct (MSM) and Eos Energy Enterprises (EOSE) are well-positioned to benefit from these trends. They are actively cutting costs, improving operation ...

Group 1 - BP plc is planning to sell its Castrol lubricants business, valued at approximately $8 billion, attracting interest from several high-profile bidders including Clayton Dubilier & Rice (CD&R) [1][3][8] - The sale of Castrol is part of BP's strategy to address pressures from activist investors like Elliott Management, who are advocating for cost reductions and improved returns [4][8] - Other bidders for the Castrol unit include Apollo Global Management, Lone Star Funds, and India's Reliance Industries, indicating a competitive auction process [3][4] Group 2 - Helge Lund, BP's current chairman, is an operating advisor to CD&R, which adds a unique dimension to the bidding process, although he is reportedly not involved in CD&R's interest in Castrol [2][6] - The auction for Castrol began earlier this year as BP faces scrutiny regarding its strategic direction and leadership succession, with potential successors having withdrawn from consideration [2][4] - CD&R's interest in Castrol aligns with its expansion strategy in the UK, where it already owns the Morrisons supermarket chain and Motor Fuel Group [6]

Investment Overview - Petrobras is investing R$33 billion ($6 billion) to enhance Brazil's downstream sector, focusing on refining, petrochemicals, and renewable fuels in Rio de Janeiro [1][11][14] - The investment aims to increase domestic fuel supply, support energy transition goals, and stimulate industrial synergy across the value chain [1] Key Projects - The Boaventura Energy Complex and Duque de Caxias Refinery (Reduc) represent a combined investment of R$26 billion, enhancing S-10 diesel output by 76,000 barrels per day (bpd) and increasing jet fuel production by 20,000 bpd [2][11] - Boaventura will feature a biojet fuel facility producing 19,000 bpd of sustainable fuels, alongside two gas-fired thermoelectric plants [3][11] Sustainability Initiatives - Reduc is exploring a lubricant oil re-refining unit with a capacity of 30,000 m (6,300 bpd) to align with circular economy practices [4] - A pilot project blending 1.2% corn oil into jet fuel has been completed, paving the way for 10,000 bpd commercial-scale production of renewable diesel [5] Infrastructure Modernization - Petrobras plans to invest R$860 million in modernizing on-site power infrastructure and R$2.4 billion on maintenance shutdowns from 2025 to 2029 [6] Petrochemical Expansion - Studies are underway for local production of acetic acid and monoethylene glycol at Boaventura, reducing Brazil's reliance on imports [7] - Braskem, a Petrobras affiliate, is expected to invest R$4 billion to expand its polyethylene plant, adding 230,000 tons per year of production capacity [8][11] Gas Supply Strategy - Petrobras is focusing on boosting domestic gas availability by reactivating shut-in gas wells and integrating with Argentina and Bolivia to lower prices and meet rising demand [12] Future Investments - Beyond Rio de Janeiro, Petrobras plans to invest R$8 billion in a second refining train at RNEST in Pernambuco and R$6 billion to resume fertilizer production [13]

Core Viewpoint - ExxonMobil is a significant player in the American energy sector with a market cap of nearly $500 billion, but its stock performance has lagged behind the S&P 500 in recent years [1][11]. Group 1: Bull Case for ExxonMobil - The company benefits from global scale and diversification, operating in numerous countries including Indonesia, Guyana, and Qatar [3]. - ExxonMobil has diversified revenue streams, with both upstream operations focused on energy exploration and downstream divisions refining and selling various products [4]. - The company generated $340 billion in revenue over the last 12 months, highlighting its importance to the global economy [5]. - Financially, ExxonMobil reported $33 billion in net income and $28 billion in free cash flow, supporting a $20 billion annual share buyback program and $17 billion in annual dividends [6]. Group 2: Bear Case for ExxonMobil - The energy sector is inherently risky due to volatile commodity prices, complicating growth and investment strategies [7]. - Geopolitical risks are significant, as the company's global operations expose it to potential conflicts, political instability, and natural disasters [8]. - ExxonMobil's stock has underperformed compared to the S&P 500, with a total return of 100% since 2015, compared to over 246% for the index [9][11]. - The stock's total return has been heavily reliant on dividend payments, with a current quarterly dividend of $0.99 per share, yielding 3.6% [11].

Key Takeaways PBF shares climbed 12.9% in 3 months, outpacing PSX's drop and MPC's 10.4% gain. Strong refining complexity and a $200M cost-saving plan aim to boost efficiency and margins. Despite trading at 0.48X P/B TTM, PBF lags peers in renewables, risking market share losses.PBF Energy Inc.’s (PBF) shares have gained 12.9% in the past three months, outperforming the Zacks Oil & Gas- Refining and Marketingindustry’s decline of 0.3%.Among other stocks from the same sector, Phillips 66 (PSX) has register ...

Financial Data and Key Metrics Changes - The company has transformed its operations over the past five years, achieving an annual growth in cash flow and earnings of 8% to 10% at constant prices and margins [8][10] - The company plans to grow earnings by $20 billion and cash flow by $30 billion by the end of the decade [17] - The enterprise value of the company is approximately $500 billion, with a total shareholder return of 11% last year [16][20] Business Line Data and Key Metrics Changes - The company is organized into three segments: upstream (oil and gas), product solutions (upgrading oil and gas to higher value products), and low carbon solutions [11][12] - The upstream segment is expected to triple the capacity of its Guyana operations and increase Permian assets by 50% over the next five years [9][56] - The company has doubled its earnings per barrel in upstream production over the last five years [57] Market Data and Key Metrics Changes - The demand for crude oil is at an all-time high, with expectations for continued growth despite economic concerns [42][44] - Natural gas prices in Europe have stabilized at around $12 to $13 per million BTU, following a spike due to supply disruptions [48] Company Strategy and Development Direction - The company aims to maintain an 8% to 10% growth rate in earnings and cash flow through the end of the decade, focusing on high-return investment opportunities [10][17] - The strategy includes a strong emphasis on carbon capture and sequestration, positioning the company as a leader in low carbon solutions [13][78] - The company is not participating in renewable energy but is focused on technologies that align with its core capabilities [13] Management's Comments on Operating Environment and Future Outlook - Management believes that achieving net zero emissions by 2050 is unrealistic and emphasizes the need for reliable and affordable energy [24][29] - The company anticipates that oil and gas will still represent 50% of the energy mix by 2050, despite efforts to reduce emissions [29] - The current regulatory environment is seen as inefficient, particularly regarding infrastructure permitting, which hampers operational efficiency [50][52] Other Important Information - The company has a consistent and growing dividend, having increased it for 42 consecutive years, and plans to repurchase $20 billion of stock this year [18][19] - The company has a strong balance sheet with a net debt to capital ratio of 7% and a double A credit rating [92] Q&A Session Summary Question: What is the nature of your energy outlook? - Management distinguishes between normative and predictive outlooks, asserting that their energy outlook is realistic and affordable, predicting a 15% increase in energy demand by 2050 [22][24] Question: How do you view the current oil price cycle? - Management describes the current oil price cycle as normal, with prices influenced by sentiment and supply-demand dynamics, noting that prices have softened recently [41][46] Question: What are your thoughts on the regulatory environment? - Management criticizes the lengthy permitting process for infrastructure projects in the U.S., calling for a more efficient system to facilitate energy production [50][52] Question: Can you provide an update on the arbitration proceedings with Hess? - Management confirms that arbitration is ongoing and expects a decision within two to three months, emphasizing that operational relationships remain strong regardless of the outcome [62][65] Question: How does the company plan to manage future cash flows? - Management expresses confidence in generating significant free cash flow by 2030, with a focus on maintaining a strong balance sheet and returning value to shareholders [97][98]

Financial Data and Key Metrics Changes - In 2024, the company reported earnings of $34 billion and cash flow from operations of $55 billion, which were utilized to fund profitable growth, maintain financial strength, and reward shareholders [14][26] - The total shareholder return, which includes share price appreciation and dividends paid, was industry-leading over one, three, and five years [14][26] - The company has consistently increased its dividend for 42 consecutive years, marking it as a significant commitment to shareholders [14][34] Business Line Data and Key Metrics Changes - In the Upstream segment, the company achieved the highest liquids production in 40 years, with a focus on value rather than volume, resulting in unit profitability doubling since 2019 [15][16] - The acquisition of Pioneer is expected to deliver annual synergies averaging $3 billion over the next ten years, enhancing the company's position in the Permian Basin [17][65] - In Product Solutions, record sales of high-value products were driven by new advantaged projects, contributing to earnings power improvement [18] Market Data and Key Metrics Changes - The company anticipates a 15% increase in overall global energy use by 2050, with oil and natural gas demand expected to grow by 4% and 39% respectively [21] - Demand for chemical products is projected to grow from around 200 million tons per year to nearly 400 million tons by mid-century [21] Company Strategy and Development Direction - The company is focused on leveraging its competitive advantages to deliver industry-leading value across its businesses, emphasizing technology and innovation [8][12] - The strategy includes a commitment to low-carbon solutions, with expectations of contributing $3 billion to earnings by 2030 from these initiatives [24][55] - The company aims to maintain a strong balance sheet and lean cost base, having cut $13 billion in structural costs since 2019 [40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to excel in any market environment, having prepared for challenging conditions through strategic planning [40][42] - The company views the energy transition as an opportunity rather than a threat, with plans to invest in profitable growth and advantaged investment opportunities [21][23] - Management highlighted the importance of maintaining dependable shareholder distributions while navigating market fluctuations [42] Other Important Information - The company has no shareholder proposals on the ballot for the first time in nearly 70 years, attributing this to its strong financial performance and proactive engagement with investors [24][39] - The company has invested over $43 million in community projects in Guyana, focusing on education, health care, and economic diversification [61] Q&A Session Summary Question: Will there be an increase in dividends this year? - The company recently increased the dividend to $0.99 per share, reflecting a commitment to a sustainable and growing dividend [33][34] Question: Where are the shareholder proposals? - The absence of proposals is attributed to the company's strong performance and willingness to engage with shareholders directly [36][39] Question: How does the company plan to adapt if oil prices decline? - The company has a robust strategy and low-cost supply portfolio, allowing it to maintain capital allocation priorities even at lower oil prices [40][42] Question: Why has the stock price been range-bound despite strong fundamentals? - The company has led its industry in total shareholder return and believes its stock is undervalued compared to its performance and opportunities [43][46] Question: What is the company's stance on current administrative policies? - The company maintains a long-term view and engages with governments to support policies that ensure energy security and responsible operations [47][48] Question: How has the Denbury acquisition progressed? - The integration of Denbury has strengthened the company's carbon capture and storage capabilities, with significant synergies expected from the acquisition [63][65]

Core Insights - BP plc has initiated the sale of its Castrol lubricants business as part of a strategy to raise $20 billion by 2027 through asset divestments [1][2] - The sale is expected to streamline BP's portfolio and enhance its financial stability under CEO Murray Auchincloss [1][6] - Analysts estimate that the Castrol sale could generate between $10 billion and $11 billion, making it one of the largest divestments in BP's current pipeline [4] Company Strategy - BP has engaged Goldman Sachs to manage the sale process and has circulated an information memorandum to potential bidders [2] - The divestment of Castrol is part of a broader restructuring effort that includes evaluating other non-core assets such as the Gelsenkirchen refinery in Germany and a 50% stake in Lightsource bp [5] - The decision to sell assets follows pressure from activist investor Elliott Management for strategic changes and operational efficiencies [6] Market Interest - Early interest in the Castrol business has been noted, with reports indicating that Saudi Aramco has expressed interest [7] - The formal sale process and the involvement of Goldman Sachs suggest increasing momentum in BP's divestment program [7]

Shell plc’s (SHEL) Indonesian affiliate has taken a bold step in reshaping its business strategy by divesting fuel retail operations to a joint venture between Citadel Pacific Limited and Sefas Group. This transaction includes the transfer of around 200 gas stations and a fuel storage terminal located in Gresik, with completion expected by next year.Despite this move, Shell remains firmly rooted in Indonesia. The company emphasized that it will continue to operate under brand licensing agreements, maintaini ...