Frontier Oil Reports Its Most Profitable Quarter Ever

Frontier Oil Corp. on Monday announced record quarterly net income of $143.3 million, or $1.26 per diluted share for the quarter ended June 30, 2006, compared to net income of $66.0 million or $0.58 per diluted share, for the quarter ended June 30, 2005. For the six months ended June 30, 2006, Frontier reported net income of $201.0 million, or $1.78 per diluted share, compared to net income of $100.4 million, or $0.89 per diluted share, for the six months ended June 30, 2005. All current and prior period share related numbers have been revised to reflect the 2-for-1 stock split effective June 26, 2006.

Frontier continues to benefit from outstanding product crack spreads as well as wide crude oil differentials. The diesel crack spread remained unseasonably strong increasing to $23.49 per barrel for the most recent quarter compared to $15.51 per barrel for the second quarter of 2005. The gasoline crack spread increased to $20.92 per barrel for the quarter ended June 30, 2006, compared to $12.50 per barrel for the same period in 2005. The Cheyenne Refinery light/heavy spread increased slightly to an average $15.19 per barrel for the second quarter of 2006 compared to $14.15 per barrel for the second quarter of 2005. Similarly, the WTI/WTS spread increased slightly to $5.04 per barrel for the recent quarter compared to $4.67 per barrel for the second quarter of 2005.

Frontier's crude oil charge for the second quarter of 2006 averaged 153,972 barrels per day (bpd), slightly below the average 156,352 bpd the Company charged in the second quarter of 2005. The most recent quarter's crude charge was reduced by approximately 4,200 bpd as a result of a diesel hydrotreater shutdown at the Cheyenne Refinery for the conversion to ultra-low sulfur diesel. Despite the reduced throughput, Frontier reported record operating income before depreciation of $232.3 million for the three months ended June 30, 2006.

Frontier's Chairman, President and CEO, James Gibbs, commented, "Our results continue to be outstanding. The second quarter of 2006 was our most profitable quarter ever, which allowed us to continue our share repurchase program and execute a 2-for-1 stock split during the quarter. Our crack spreads and crude oil differentials remain incredibly strong and we believe our third quarter 2006 results will be excellent."

For the three months ending June 30, 2006, Frontier generated $155.3 million in cash before changes in working capital and $211.9 million after changes in working capital, while investing approximately $37.7 million in capital expenditures and repurchasing approximately 1.1 million shares of its common stock. Frontier's cash balance of $350.0 million exceeded debt by $200.0 million as of June 30, 2006. There were no borrowings under the Company's revolving credit facility. For the six months ended June 30, 2006, Frontier generated $232.2 million in cash before changes in working capital and $162.1 million after changes in working capital, while investing $74.8 million in capital expenditures and repurchasing approximately 1.5 million shares of its common stock.

The second quarter 2006 results include an after-tax inventory gain of approximately $23.6 million or $0.21 per diluted share, compared to a loss of $1.0 million, or $0.01 per diluted share, for the second quarter of 2005. The six months ended June 30, 2006 include an after-tax inventory gain of approximately $23.6 million or $0.21 per diluted share compared to a gain of $18.4 million, or $0.16 per diluted share for the same period in 2005. The most recent quarter results also include a $5.0 million, or $0.03 per diluted share (after-tax) accrual for the cleanup of a wastewater treatment pond located on land historically leased from an adjacent landowner.

Events  SUBSCRIBE TO OUR NEWSLETTER

Our Privacy Pledge
SUBSCRIBE


Most Popular Articles


From the Career Center
Jobs that may interest you
CFO/ Senior Financial Manager
Expertise: Accounting|Financial Analyst
Location: Carrizo Springs, TX
 
Sr. Accounting Specialist- Revenue, Severance Tax
Expertise: Accounting
Location: Houston, TX
 
Business Development Analyst
Expertise: Business Analyst|Business Development
Location: Chesapeake, VA
 
search for more jobs

Brent Crude Oil : $55.49/BBL 2.45%
Light Crude Oil : $52.42/BBL 2.04%
Natural Gas : $3.2/MMBtu 5.04%
Updated in last 24 hours