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Genesis Energy, L.P. Reports Second Quarter 2020 Results

Genesis Energy, L.P. Reports Second Quarter 2020 Results HOUSTON, Aug. 05 /BusinessWire/ -- Genesis Energy, L.P. (NYSE:GEL) today announced its second quarter results. We generated the following financial results for the second quarter of 2020: Net Loss Attributable to Genesis Energy, L.P. of $326.7 million for the second quarter of 2020, inclusive of non-cash impairment charges of $277.5 million (as discussed later in this release), compared to Net Income Attributable to Genesis Energy, L.P. of $40.1 million for the same period in 2019. Cash Flows from Operating Activities of $62.6 million for the second quarter of 2020 compared to $81.6 million for the same period in 2019. Total Segment Margin in the second quarter of 2020 of $139.3 million. Available Cash before Reserves to common unitholders of $50.4 million for the second quarter of 2020, which provided 2.74X coverage for the quarterly distribution of $0.15 per common unit attributable to the second quarter. We declared cash distributions on our preferred units of $0.7374 for each preferred unit, which equates to a cash distribution of approximately $18.7 million and is reflected as a reduction to Available Cash before Reserves to common unitholders. Adjusted EBITDA of $130.7 million in the second quarter of 2020. Our bank leverage ratio, calculated consistent with our credit agreement, is 5.28X as of June 30, 2020 and is discussed further in this release. Grant Sims, CEO of Genesis Energy, said, "As we said in our first quarter call, we believed Genesis, and most other energy and industrial companies, would be facing generational economic headwinds from the widespread demand destruction resulting from shutting down large portions of the world's economies to slow the spread of Covid-19. This turned out in fact to be the case, especially for us in our Sodium Minerals and Sulfur Services segment. Nonetheless, during the quarter we still managed to reduce total Adjusted Debt (as defined in our existing senior secured facility) by approximately $33 million. In recent months, we have focused on taking the steps necessary to improve our financial flexibility and be cash flow positive even in such a difficult operating environment: We reduced our quarterly distribution resulting in approximately $200 million in annual cash savings to be used principally to reduce debt; We amended our agreements with GSO Capital Partners to allow us to delay the capital expenditures associated with our Granger Optimization Project by up to twelve months; We received permission from our banks to use revolver capacity to purchase up to $340 million of our outstanding senior unsecured notes; We implemented cost savings initiatives that are expected to generate approximately $38 million in annual savings beginning this quarter; and We amended, with the unanimous support of 19 banks, our senior secured credit facility to be able to add back $13.5 million in one-time charges associated with the $38 million of annual savings from our cost savings initiatives, to increase our Consolidated Leverage Ratio Covenant to 5.75X through 1Q 2021 and to lower our Consolidated Interest Coverage to 2.75X through 1Q 2021, both of the latter as defined in our existing senior secured credit facility. During the quarter, were it not for a $4-5 million negative effect to Offshore Segment margin from Tropical Storm Cristobal, our businesses performed as expected with the obvious exception of Sodium Minerals and Sulfur Services. Our historical refinery services business was negatively affected as mines in South America were mandated to be either closed or operated at significantly below capacity in order to address the spread of Covid-19. Most of such restrictions have subsequently been lifted, and generally speaking, we would expect our sales of sodium hydrosulfide to recover rather quickly as we go through the remainder of 2020. Beginning in May and accelerating into June, our domestic and international customers for soda ash began cancelling orders for the remainder of the year as they adjusted to the demand destruction associated with Covid-19 for their final products in which soda ash is used. In fact, since our last earnings call, we have received cancellations of orders for slightly more than 300,000 tons through the rest of this year alone. This physical demand destruction dwarfs the downdraft to our soda operations experienced during the financial crisis of 2008-2009. To respond to such imbalance, we made the decision to cold stack (meaning we could return to normal operations in 3-6 months) our existing operations at Granger, currently our highest cost facility, resulting in a reduction in our supplies to be sold by some 550,000 tons on an annual basis. We know other domestic producers have also reduced supplies, and we are aware of a major synthetic producer in China shutting down as the worldwide market for soda ash adjusts to the current environment. Additionally, we delayed our Granger expansion project by a full year and currently expect to bring on a fully expanded Granger facility in late 2023 at a full expanded capacity of 1.2 million tons a year and optimized such that it will join our Westvaco facility as one of the most economic soda ash production facilities in the world. The market for soda ash can tighten very quickly as demand recovers along with increases in economic activity, especially given the supply responses we have already seen. The pace and scope of the recovery in the world's economies is unfortunately not abundantly clear and could well extend into 2021. However, based upon the steps we have already taken, we believe we are well positioned to weather the storm regardless of duration and will still be cash flow positive and be a net payer of debt this year and in subsequent years. For the full year of 2020, we would expect Adjusted Consolidated EBITDA, as defined by our banks and used to calculate compliance with our covenants, to be $570 to $610 million, or generally in line with current street expectations of around $600 million. More importantly, from our perspective, is the recognition of the significant operating leverage we have to produce increasing financial results in future periods as the world's economies re-open. There is no doubt that the demand for soda ash will ultimately rebound and that we will benefit from being one of the world's largest and lowest cost suppliers of such a critical industrial component. Additionally, we confirmed during the quarter the anticipated timing of several major offshore projects which are already contracted to our expansive infrastructure in the central Gulf of Mexico. Argos (formerly Mad Dog 2) and the King's Quay FPS (Khaleesi, Mormont & Samurai fields) are still scheduled for first production in late 2021 or early 2022 and early to mid-2022, respectively. These two fields alone, which required almost zero capital from us, are expected to generate well in excess of $100 million of annual segment margin to us when ramped up to anticipated full production. While challenges certainly remain, given the steps we have already taken and given our lack of future capital requirements, we believe we have positioned the company to comfortably live within its means and be able to harvest the benefits of its operating leverage from known and contracted opportunities as well as a general recovery in industrial activity worldwide. I would like to once again recognize our entire workforce, and especially our miners, mariners and offshore personnel who live and work in close quarters during this time of social distancing. I am extremely proud to say we have safely operated our assets under our own Covid-19 safety procedures and protocols with no impact to our business partners and customers with limited confirmed cases amongst our some 2,000 employees. As always, we intend to be prudent, diligent and intelligent and focus on delivering long-term value for everyone in our capital structure without ever losing our commitment to safe, reliable and responsible operations." Financial Results Segment Margin Variances between the second quarter of 2020 (the "2020 Quarter") and the second quarter of 2019 (the "2019 Quarter") in these components are explained below. Segment margin results for the 2020 Quarter and 2019 Quarter were as follows: Offshore pipeline transportation Segment Margin for the 2020 Quarter decreased $1.4 million, or 2%, from the 2019 Quarter, primarily due to lower volumes on our crude oil and natural gas pipeline systems. These lower volumes are attributable to planned downtime, which in some cases was extended due to the economic environment, certain producer shut-ins (specifically in May) that impacted the throughput on our crude oil systems, and weather interruptions from Tropical Storm Cristobal. For the most part, the production from these fields came back online during June at or near their normal levels. These lower volumes were almost fully offset by increased flow from the Buckskin and Hadrian North fields during the 2020 Quarter, which saw first production late in the 2019 Quarter. The Buckskin and Hadrian North fields are both fully dedicated to our 100% owned SEKCO pipeline, and further downstream, our 64% owned Poseidon oil pipeline system. Sodium minerals and sulfur services Segment Margin for the 2020 Quarter decreased $32.9 million, or 57%, from the 2019 Quarter. This decrease is primarily due to lower volumes and pricing in our Alkali Business and lower NaHS volumes in our refinery services business. During the 2020 Quarter, we experienced lower export pricing due to supply and demand imbalances that existed at the time of our re-contracting phase in December 2019 and January 2020, which is expected to continue, to some extent, for at least the rest of 2020. This was coupled with lower ANSAC and domestic sales volumes of soda ash during the 2020 Quarter due to the demand destruction from the worldwide economic shutdowns and uncertainty from the pandemic, which we expect to continue until restrictions are lifted globally. During the 2020 Quarter, we also made the decision to cold stack our existing Granger facility, removing approximately 550,000 tons of annual soda ash production to facilitate balancing supply with the significantly reduced demand worldwide resulting from Covid-19. As currently configured, Granger is our highest cost production facility. While we could resume operations at Granger within a 3-6 month period subject to market requirements, it is our intent at this point to keep it in cold stack mode and bring an optimized Granger facility, expanded to more than 1.2 million tons a year of production capacity, into full production mode in late 2023. Such optimized and expanded Granger facility will have production costs in-line with our Westvaco facility, which is one of the most economic soda ash production facilities in the world. In our refinery services business, we experienced a decline in NaHS volumes during the 2020 Quarter due to lower demand from certain of our mining customers, both domestically and in South America, and lower demand from our domestic pulp and paper customers. In South America (primarily in Peru), the lower volume demand is directly a result of customer shut-ins amidst the spread of Covid-19 and we expect these volumes to return to their normal levels later in 2020. Domestically, many of our pulp and paper customers' spring turnarounds and outages were pushed back or even cancelled due to Covid-19. We saw improvement near the end of the 2020 Quarter as it relates to these domestic customers with pulp mills back up and running at their normal capacity. Onshore facilities and transportation Segment Margin for the 2020 Quarter decreased by $14.7 million, or 40.9%, from the 2019 Quarter primarily due to the 2019 Quarter including the receipt of a cash payment of $10 million associated with the resolution of a crude oil supply agreement. Additionally, during the 2020 Quarter, we had lower volumes throughout our onshore facilities and transportation asset base, primarily in Louisiana at our Baton Rouge corridor assets and our Raceland rail facility. Due to the decline in crude oil prices and the collapse in the differential of Western Canadian Select (WCS) to the Gulf Coast, which has made crude-by-rail to the Gulf Coast uneconomic, the volumes at our Baton Rouge facilities were below our minimum take-or-pay levels and we were only able to recognize our minimum volume commitment in segment margin during the 2020 Quarter. We anticipate volumes will remain below our minimum take-or-pay levels at our Baton Rouge facilities throughout the remainder of 2020. These lower volumes were partially offset by our ability to use our available crude oil storage capacity to profit on contango opportunities during the 2020 Quarter. Marine transportation Segment Margin for the 2020 Quarter increased $4.2 million, or 30%, from the 2019 Quarter. During the 2020 Quarter, in our offshore barge operation, we benefited from the continual improving rates in the spot and short term markets coupled with increased utilization relative to the 2019 Quarter. In our inland business, we continued to see increased day rates throughout the period which offset the lower utilization. We expect to see continued pressure on our utilization, and to an extent, the spot rates in our inland business as refineries continue to lower their utilization rates to better align with overall demand as a result of Covid-19 and the current operating environment. We have continued to enter into short term contracts (less than a year) in both the inland and offshore markets because we believe the day rates currently being offered by the market have yet to fully recover from their cyclical lows. Other Components of Net Income In the 2020 Quarter, we recorded Net Loss Attributable to Genesis Energy, L.P. of $326.7 million compared to Net Income Attributable to Genesis Energy, L.P. of $40.1 million in the 2019 Quarter. As a result of lower current demand and the current outlook for our crude-by-rail logistics assets, we recorded a non-cash impairment expense of $277.5 million associated with our onshore facilities and transportation segment in the 2020 Quarter. Net Loss Attributable to Genesis Energy, L.P. in the 2020 Quarter was also negatively impacted, relative to the 2019 Quarter, by: (i) lower segment margin of $44.8 million; (ii) an unrealized (non-cash) loss from the valuation of the embedded derivative associated with our Class A Convertible Preferred Units of $21.8 million compared to an unrealized (non-cash) loss of $4.7 million during the 2019 Quarter (which is recorded within "other income (expense)" on the Unaudited Condensed Consolidated Statements of Operations); (iii) higher general and administrative expenses primarily due to a one-time charge of approximately $13 million associated with certain severance and restructuring costs; and (iv) lower non-cash revenues of $21.5 million within our offshore pipeline transportation and onshore facilities and transportation segments as a result of how we recognize revenue in accordance with GAAP on certain contracts. Additionally, the 2019 Quarter included positive changes in estimated abandonment costs for certain of our non-operating offshore gas assets of $15.7 million (which is included within "offshore pipeline transportation operating costs" on the Unaudited Condensed Consolidated Statements of Operations). These decreases were partially offset by cancellation of debt income of $18.5 million associated with the open market repurchase and extinguishment of certain of our senior unsecured notes and lower interest expense of $3.9 million during the 2020 Quarter. Earnings Conference Call We will broadcast our Earnings Conference Call on Wednesday, August 5, 2020, at 8:30 a.m. Central time (9:30 a.m. Eastern time). This call can be accessed at www.genesisenergy.com. Choose the Investor Relations button. For those unable to attend the live broadcast, a replay will be available beginning approximately one hour after the event and remain available on our website for 30 days. There is no charge to access the event. Genesis Energy, L.P. is a diversified midstream energy master limited partnership headquartered in Houston, Texas. Genesis' operations include offshore pipeline transportation, sodium minerals and sulfur services, onshore facilities and transportation and marine transportation. Genesis' operations are primarily located in Texas, Louisiana, Arkansas, Mississippi, Alabama, Florida, Wyoming and the Gulf of Mexico. This press release includes forward-looking statements as defined under federal law. Although we believe that our expectations are based upon reasonable assumptions, we can give no assurance that our goals will be achieved. Actual results may vary materially. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that we expect, believe or anticipate will or may occur in the future, including but not limited to statements relating to future financial and operating results, the impact of our cost saving measures and the amount of such cost savings, our expectations regarding the potential impact of the Covid-19 pandemic, and our strategy and plans, are forward-looking statements, and historical performance is not necessarily indicative of future performance. Those forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of uncertainties, factors and risks, many of which are outside our control, that could cause results to differ materially from those expected by management. Such risks and uncertainties include, but are not limited to, weather, political, economic and market conditions, including a decline in the price and market demand for products (which may be affected by the actions of OPEC and other oil exporting nations) and a reduction in demand for our services resulting in impairments of our assets, the outbreak or continued spread of disease (including Covid-19), the timing and success of business development efforts and other uncertainties, and the realized benefits of the preferred equity investment in Alkali Holdings by affiliates of GSO Capital Partners LP or our ability to comply with the Granger transaction agreements and maintain control and ownership of our Alkali Business. Those and other applicable uncertainties, factors and risks that may affect those forward-looking statements are described more fully in our Annual Report on Form 10-K for the year ended December 31, 2019 filed with the Securities and Exchange Commission and other filings, including our Current Reports on Form 8-K and Quarterly Reports on Form 10-Q. We undertake no obligation to publicly update or revise any forward-looking statement. NON-GAAP MEASURES This press release and the accompanying schedules include non-generally accepted accounting principle (non-GAAP) financial measures of Adjusted EBITDA and total Available Cash before Reserves. In this press release, we also present total Segment Margin as if it were a non-GAAP measure. Our Non-GAAP measures may not be comparable to similarly titled measures of other companies because such measures may include or exclude other specified items. The accompanying schedules provide reconciliations of these non-GAAP financial measures to their most directly comparable financial measures calculated in accordance with generally accepted accounting principles in the United States of America (GAAP). Our non-GAAP financial measures should not be considered (i) as alternatives to GAAP measures of liquidity or financial performance or (ii) as being singularly important in any particular context; they should be considered in a broad context with other quantitative and qualitative information. Our Available Cash before Reserves, Adjusted EBITDA and total Segment Margin measures are just three of the relevant data points considered from time to time. When evaluating our performance and making decisions regarding our future direction and actions (including making discretionary payments, such as quarterly distributions) our board of directors and management team have access to a wide range of historical and forecasted qualitative and quantitative information, such as our financial statements; operational information; various non-GAAP measures; internal forecasts; credit metrics; analyst opinions; performance, liquidity and similar measures; income; cash flow; and expectations for us, and certain information regarding some of our peers. Additionally, our board of directors and management team analyze, and place different weight on, various factors from time to time. We believe that investors benefit from having access to the same financial measures being utilized by management, lenders, analysts and other market participants. We attempt to provide adequate information to allow each individual investor and other external user to reach her/his own conclusions regarding our actions without providing so much information as to overwhelm or confuse such investor or other external user. AVAILABLE CASH BEFORE RESERVES Purposes, Uses and Definition Available Cash before Reserves, also referred to as distributable cash flow, is a quantitative standard used throughout the investment community with respect to publicly traded partnerships and is commonly used as a supplemental financial measure by management and by external users of financial statements such as investors, commercial banks, research analysts and rating agencies, to aid in assessing, among other things: We define Available Cash before Reserves ("Available Cash before Reserves") as Adjusted EBITDA as adjusted for certain items, the most significant of which in the relevant reporting periods have been the sum of maintenance capital utilized, net cash interest expense, cash tax expense, and cash distributions paid to our Class A convertible preferred unitholders. Disclosure Format Relating to Maintenance Capital We use a modified format relating to maintenance capital requirements because our maintenance capital expenditures vary materially in nature (discretionary vs. non-discretionary), timing and amount from time to time. We believe that, without such modified disclosure, such changes in our maintenance capital expenditures could be confusing and potentially misleading to users of our financial information, particularly in the context of the nature and purposes of our Available Cash before Reserves measure. Our modified disclosure format provides those users with information in the form of our maintenance capital utilized measure (which we deduct to arrive at Available Cash before Reserves). Our maintenance capital utilized measure constitutes a proxy for non-discretionary maintenance capital expenditures and it takes into consideration the relationship among maintenance capital expenditures, operating expenses and depreciation from period to period. Maintenance Capital Requirements Maintenance Capital Expenditures Maintenance capital expenditures are capitalized costs that are necessary to maintain the service capability of our existing assets, including the replacement of any system component or equipment which is worn out or obsolete. Maintenance capital expenditures can be discretionary or non-discretionary, depending on the facts and circumstances. Initially, substantially all of our maintenance capital expenditures were (a) related to our pipeline assets and similar infrastructure, (b) non-discretionary in nature and (c) immaterial in amount as compared to our Available Cash before Reserves measure. Those historical expenditures were non-discretionary (or mandatory) in nature because we had very little (if any) discretion as to whether or when we incurred them. We had to incur them in order to continue to operate the related pipelines in a safe and reliable manner and consistently with past practices. If we had not made those expenditures, we would not have been able to continue to operate all or portions of those pipelines, which would not have been economically feasible. An example of a non-discretionary (or mandatory) maintenance capital expenditure would be replacing a segment of an old pipeline because one can no longer operate that pipeline safely, legally and/or economically in the absence of such replacement. As we exist today, a substantial amount of our maintenance capital expenditures from time to time will be (a) related to our assets other than pipelines, such as our marine vessels, trucks and similar assets, (b) discretionary in nature and (c) potentially material in amount as compared to our Available Cash before Reserves measure. Those expenditures will be discretionary (or non-mandatory) in nature because we will have significant discretion as to whether or when we incur them. We will not be forced to incur them in order to continue to operate the related assets in a safe and reliable manner. If we chose to not make those expenditures, we would be able to continue to operate those assets economically, although in lieu of maintenance capital expenditures, we would incur increased operating expenses, including maintenance expenses. An example of a discretionary (or non-mandatory) maintenance capital expenditure would be replacing an older marine vessel with a new marine vessel with substantially similar specifications, even though one could continue to economically operate the older vessel in spite of its increasing maintenance and other operating expenses. In summary, as we continue to expand certain non-pipeline portions of our business, we are experiencing changes in the nature (discretionary vs. non-discretionary), timing and amount of our maintenance capital expenditures that merit a more detailed review and analysis than was required historically. Management's recently increasing ability to determine if and when to incur certain maintenance capital expenditures is relevant to the manner in which we analyze aspects of our business relating to discretionary and non-discretionary expenditures. We believe it would be inappropriate to derive our Available Cash before Reserves measure by deducting discretionary maintenance capital expenditures, which we believe are similar in nature in this context to certain other discretionary expenditures, such as growth capital expenditures, distributions/dividends and equity buybacks. Unfortunately, not all maintenance capital expenditures are clearly discretionary or non-discretionary in nature. Therefore, we developed a measure, maintenance capital utilized, that we believe is more useful in the determination of Available Cash before Reserves. Our maintenance capital utilized measure, which is described in more detail below, constitutes a proxy for non-discretionary maintenance capital expenditures and it takes into consideration the relationship among maintenance capital expenditures, operating expenses and depreciation from period to period. Maintenance Capital Utilized We believe our maintenance capital utilized measure is the most useful quarterly maintenance capital requirements measure to use to derive our Available Cash before Reserves measure. We define our maintenance capital utilized measure as that portion of the amount of previously incurred maintenance capital expenditures that we utilize during the relevant quarter, which would be equal to the sum of the maintenance capital expenditures we have incurred for each project/component in prior quarters allocated ratably over the useful lives of those projects/components. Because we did not initially use our maintenance capital utilized measure, our future maintenance capital utilized calculations will reflect the utilization of solely those maintenance capital expenditures incurred since December 31, 2013. ADJUSTED EBITDA Purposes, Uses and Definition Adjusted EBITDA is commonly used as a supplemental financial measure by management and by external users of financial statements such as investors, commercial banks, research analysts and rating agencies, to aid in assessing, among other things: We define Adjusted EBITDA ("Adjusted EBITDA") as earnings before interest, taxes, depreciation and amortization (including impairment, write-offs, accretion and similar items, often referred to as EBITDA) after eliminating other non-cash revenues, expenses, gains, losses and charges (including any loss on asset dispositions), plus or minus certain other select items that we view as not indicative of our core operating results (collectively, "Select Items"). Although, we do not necessarily consider all of our Select Items to be non-recurring, infrequent or unusual, we believe that an understanding of these Select Items is important to the evaluation of our core operating results. The most significant Select Items in the relevant reporting periods are set forth below. The table below includes the Select Items discussed above as applicable to the reconciliation of Adjusted EBITDA and Available Cash before Reserves to net income: SEGMENT MARGIN Our chief operating decision maker (our Chief Executive Officer) evaluates segment performance based on a variety of measures including Segment Margin, segment volumes where relevant and capital investment. We define Segment Margin as revenues less product costs, operating expenses, and segment general and administrative expenses, after eliminating gain or loss on sale of assets, plus or minus applicable Select Items. Although, we do not necessarily consider all of our Select Items to be non-recurring, infrequent or unusual, we believe that an understanding of these Select Items is important to the evaluation of our core operating results. 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Gran Tierra Energy Inc. Announces Second Quarter 2020 Results

Gran Tierra Energy Inc. Announces Second Quarter 2020 Results Achieved Significant Reductions in Operating and G&A Costs Resumption of Production, Development and Workover Activities in Second Half 2020 Strengthened Financial Position and Liquidity Profile with Attractive Outlook for 2021 CALGARY, Alberta, Aug. 04, 2020 (GLOBE NEWSWIRE) -- Gran Tierra Energy Inc. ("Gran Tierra" or the "Company") (NYSE American:GTE)(TSX:GTE)(LSE:GTE) today announced the Company's financial and operating results for the quarter ended June 30, 2020 ("the Quarter"). All dollar amounts are in United States ("U.S.") dollars and production amounts are on an average working interest before royalties ("WI") basis unless otherwise indicated. Per barrel ("bbl") of oil equivalent ("BOE") amounts are based on WI sales before royalties. For per BOE amounts based on net after royalty ("NAR") production, see Gran Tierra's Quarterly Report on Form 10-Q filed August 4, 2020. Key Highlights: Production: The Quarter's production averaged 20,165 BOE per day ("BOEPD"), down 32% from first quarter 2020 ("the Prior Quarter"); with the unprecedented impact of the COVID-19 pandemic and the related crash in world oil prices, Gran Tierra took decisive actions during the Quarter to protect the Company's balance sheet and liquidity; as a result, oil production was impacted by deferred development drilling, shut-in of higher cost production and wells that were left off-line awaiting routine mechanical workovers; the suspension of production at the Suroriente and PUT-7 Blocks in the southern Putumayo region due to force majeure related to a local farmers' blockade also reduced volumes; current production is approximately 19,000 BOEPDAchieved Significant Reductions in Costs: Since March 2020, in response to the global economic downturn and lower commodity prices, Gran Tierra rapidly implemented cost saving initiatives throughout the Company; significant progress has been made on lowering costs through the renegotiation of vendor contracts and optimization of personnel and rental equipment; as a result, Gran Tierra has reduced operating costs and cash general and administrative ("G&A") costs by 43% and 30%, respectively, from the Prior Quarter; the majority of the cost reductions are structural reductions in the Company's operations, which are expected to be maintained even if oil prices recover further; as a result of ongoing cost saving initiatives, the Company also expects per well drilling and completion capital costs to be reduced by approximately 30% at Acordionero and 18% at Costayaco compared to 2019Successful Redetermination of the Credit Facility & Covenant Waiver Until October 2021: During the Quarter, Gran Tierra successfully completed the semi-annual redetermination of the Company's bank-syndicated credit facility; the borrowing base limit was re-determined to $225 million from the prior limit of $300 million and the Company was granted relief under certain financial covenants until October 1, 2021 (the "Covenant Relief Period"), including relief from compliance with the ratio of Total Debt* to EBITDAX* during the Covenant Relief PeriodVAT & Income Tax Refunds Received: at the end of the Prior Quarter, Gran Tierra had total value-added tax ("VAT") and income tax receivables of $138 million; during the Quarter, the Company collected a total of $25 million in VAT and income tax refunds; during July 2020, the Company received another $21 million in tax refunds and expects to collect another $30 to $40 million before the end of 2020; therefore, Gran Tierra forecasts total collection in the range of $76 to $86 million in VAT and income tax refunds during 2020Capital Expenditures: With 2020's oil price volatility and logistical challenges due to COVID-19, Gran Tierra elected to significantly reduce the Quarter's activities; the Quarter's capital expenditures were only $5 million; while the Quarter's net loss was $371 million (including oil and gas property impairment of $398 million), funds flow from operations(1) was a positive $6 million, which more than covered capital expendituresOperations Resumption: Gran Tierra forecasts the following activities during the course of second half 2020: With the recent recovery in oil prices and tightening of differentials, Gran Tierra has initiated the required activities to safely resume several operations throughout the Company's Colombian portfolio, in strict accordance with COVID-19 protocols; the evolving situation with the COVID-19 pandemic may impact the timing of the planned activities and the resulting amount and timing of incremental production additionsAcordionero Workover and Development Activities to Resume (100% WI): Workovers: plans call for a restart of the routine workover program, with the first workover rig to begin operations during third quarter 2020, and a second workover rig starting up in fourth quarter 2020; a total of 8-10 offline wells are expected to be worked over to restore production by 2020 year-end; the wells can only be worked over one at a time in sequence; the total combined productive capacity of the 10 highest priority wells for workover is estimated to be approximately 3,500 bbl of oil per day ("BOPD") with weighted averages for water cut of 13%, gas-oil ratio of 639 standard cubic feet per bbl and API oil gravity of 17 degrees (based on 30-day averages prior to each well going offline earlier this year)Development Drilling: one drilling rig is expected to restart development drilling operations during fourth quarter 2020 to drill 1-2 new oil wells by 2020 year-end; these new wells are expected to begin production during first quarter 2021; the drilling rig is forecast to continue drilling new development oil wells at Acordionero throughout 2021; the next four planned wells are scheduled to be drilled from the new southwest pad; each of these new wells is expected to have an initial oil production rate of approximately 550 BOPD (initial 30-day average rate), in line with the strong performance of wells drilled in the field over the last year Costayaco/Vonu Workovers to Resume (100% WI): a workover rig is expected to start operations during fourth quarter 2020 to workover 2-4 wells; the wells can only be worked over one at a time in sequence; the total combined productive capacity for the four priority wells for workover is estimated to be approximately 1,000 BOPD with weighted averages for water cut of 44%, gas-oil ratio of 811 standard cubic feet per bbl and API oil gravity of 29 degrees (based on 30-day averages prior to each well going offline earlier this year)Suroriente Block (52% WI) to Resume Production: restart of this block is expected during second half 2020; the block's WI productive capacity is estimated to be approximately 3,600 BOPD (based on the 30-day average prior to the block being shut-in earlier this year)Majority of Minor Fields to Resume Production: the restart of the these fields is expected during second half 2020; these fields' combined WI productive capacity is estimated to be approximately 1,900 BOPD (based on 30-day averages prior to the shut-ins earlier this year, which were done to reduce costs and preserve value and liquidity) Financial Guidance for Second Half 2020 (based on the resumption of operations described above): Brent Oil Price: $41.00-45.00/bblCapital Expenditures: $25-35 million (new Acordionero southwest drilling pad & 1-2 new wells)Operating Netback(1): $55-75 millionEBITDA(1): $45-65 millionFunds Flow from Operations(1): $25-35 million Hedges In Place To Protect Cash Flows: Realized oil price hedging gains totaled $17 million during the first half of 2020; the Company has entered into additional oil price hedges and has a total 11,000 BOPD hedged for the second half of 2020 (average floor price of $35.68/bbl, average ceiling price of $43.43/bbl) as follows: Gran Tierra Positioned to Thrive in 2021: The Company's initiatives during the severe downturn of 2020 were focused on portfolio optimization, deferring short-cycle investments, and pacing projects to allow the safe resumption of operations when oil prices recovered and strict COVID-19 safety protocols were implemented; the Company is analyzing multiple scenarios focused on maximizing returns and free cash flow in 2021, and to optimize the ultimate oil recovery, free cash flow and long-term value from all assets; Gran Tierra believes its robust asset base will resume average production in excess of 30,000 BOEPD in 2021, based on current assumptions, including commodity prices remaining at current levels and that there is minimal global economic disruption from the COVID-19 pandemic next year Key Financial Metrics for the Quarter: Net loss was $371 million compared with a net loss of $252 million in the Prior Quarter, primarily due to a non-cash impairment on the Company's oil and gas properties as a result of significantly lower oil prices ($398 million)Adjusted EBITDA(1) was $18 million, compared with $35 million in the Prior QuarterFunds flow from operations(1) of $6 million ($0.02 per share, basic) decreased by 73% compared with the Prior Quarter, as a result of lower production and a 34% decrease in the Brent oil price, as well as a widening of differentials; capital expenditures totaled $5 million, a decrease of 89% compared to the Prior QuarterOil and gas sales were $34 million, down 61% from $86 million in the Prior Quarter, due to the decreases in production and oil pricesOperating netback(1)(2) decreased to $5.65 per BOE, which was caused mostly by the 34% drop in the Brent oil price from the Prior Quarter, while other cost components such as transportation expenses and the quality and transportation discount remained relatively unchanged; the drop in the Quarter's royalties to $1.63 per BOE, down from the Prior Quarter's $5.61 per BOE, partially offset the negative impact of the crash in oil pricesOperating expenses of $9.62 per BOE were down 21% from $12.17 per BOE in the Prior Quarter due to lower power generation costs, reduction in rental equipment and cost savings attributed to the lower activitiesWorkover expenses were $0.71 per BOE, down 85% from $4.64 per BOE in the Prior Quarter due to lower activity Transportation expenses were $1.68 per BOE, up from $1.52 per BOE in the Prior Quarter, due to higher pipeline sales Operations Update Acordionero (100% WI and Operator) During the Quarter, no development wells were drilled, however production from the remaining wells stabilized at approximately 11,000 BOPD during the Quarter, with downtime of only approximately 1%; the low downtime reflects excellent reliability from the field's gas-to-power generation; the stabilization of production is indicative of effective waterflood response due to proactive pattern balancing; this base production response provides an excellent platform to grow production and cash flow from future workovers and development drillingAt the end of the Quarter, a total of 14 oil wells require workovers to restore production; given the recent strong recovery in the Brent oil price, the Company is planning on restarting a workover program during third quarter 2020 Suroriente (52% WI and Operator) Gran Tierra plans to restart production from Suroriente during second half 2020The Cohembi and other oil fields in the Suroriente Block were producing at approximately 3,600 BOPD (WI) prior to the blockades, as the field was continuing to positively respond to increased water injection and pump optimizationsPrior to the blockades in late February 2020, activities were underway to expand the Cohembi water treatment, injection and processing facilities under a two-phased expansion program; the combined phased expansion would be expected to boost gross water injection capacity from 19,000 to 60,000 bbl of water per day Ayombero-Chuira (100% WI and Operator) Gran Tierra remains encouraged by results from the Ayombero-1 well, which continues to show stable production which averaged 158 BOPD for the Quarter on natural flow and has total cumulative oil production to date of 124,000 bblAyombero-2 and -3 remain suspended and ready for the next phase of operations to recover the wellbores; Gran Tierra continues detailed planning for the next phase of operations but plans to await further recovery in oil prices before restarting development activities Moqueta (100% WI and Operator) During the Quarter, Gran Tierra continued to optimize the waterflood at Moqueta, where oil production and water injection were in-line with expectationsOn June 21, 2020, Moqueta was shut-in immediately after a leak was detected in the pipeline that transports the field's production to Costayaco; repairs were made during July 2020 and the field was brought back on production on July 27, 2020; the temporary shut-in of Moqueta is expected to cause an immaterial reduction in the Company's total 2020 average production of approximately 400 BOPD; Moqueta is currently producing approximately 3,000 BOPD Message to Shareholders Gary Guidry, President and Chief Executive Officer of Gran Tierra, commented: "With the unprecedented volatility facing our industry during the COVID-19 pandemic and the related imbalance in world oil supply and demand, Gran Tierra took decisive action to protect our balance sheet and cash flows. We swiftly reduced our 2020 capital program and implemented cost saving initiatives throughout the Company. The team has made significant progress on lowering operating and G&A costs, and done a great job managing the crisis on all fronts. We believe we are well-positioned to withstand the current volatile environment with our low base decline, conventional oil asset base and the operational control for capital allocation and timing, while maintaining a low cost structure. As we move forward, we remain agile in the execution of our strategy as we plan to resume development and workover activities in Acordionero and restart the majority of shut-in oil fields during the second half of 2020. We will safely and diligently commence operations with a key objective of finishing 2020 strong to set up for an exciting 2021. We believe that Gran Tierra is well-positioned to thrive in 2021 and beyond." Financial and Operational Highlights (all amounts in $000s, except per share and BOE amounts) *These non-GAAP measures are defined in the Credit Agreement, dated as of September 18, 2015, by and among Gran Tierra Energy Inc., Gran Tierra Energy International Holdings Ltd., the Bank of Nova Scotia, Societe Generale and the lenders party thereto, as amended (the "Credit Agreement"). The Credit Agreement and all amendments thereto are available as exhibits to Gran Tierra's SEC filings. Total Debt means all debt of Gran Tierra and its subsidiaries party to the credit facility on a consolidated basis. EBITDAX means the sum of consolidated net income plus the following expenses or charges to the extent deducted from consolidated net income: interest, income taxes, depreciation, depletion, amortization, exploration expenses and other similar noncash charges, minus all noncash income added to consolidated net income. Senior Secured Leverage Ratio means the ratio of secured total date to EBITDAX.(1) Net debt is defined as face value of debt ($789 million), less cash and cash equivalents ($17 million). Net debt, funds flow from operations, operating netback, return on average capital employed, cash netback, earnings before interest, taxes and depletion, depreciation and accretion ("DD&A") ("EBITDA") and EBITDA adjusted for goodwill and asset impairment, unrealized foreign exchange gain or loss, stock based compensation expense or recovery, other loss and unrealized financial instruments gain or loss ("Adjusted EBITDA") are non-GAAP measures and do not have standardized meanings under generally accepted accounting principles in the United States of America ("GAAP"). Refer to "Non-GAAP Measures" in this press release for descriptions of these non-GAAP measures and reconciliations to the most directly comparable measures calculated and presented in accordance with GAAP.(2) Operating netback as presented is defined as oil and gas sales less operating, workover and transportation expenses. See the table entitled Financial and Operational Highlights above for the components of consolidated operating netback and corresponding reconciliation. Conference Call Information: Gran Tierra will host its second quarter 2020 results conference call on Wednesday, August 5, 2020, at 9:00 a.m. Mountain Time, 11:00 a.m. Eastern Time. Interested parties may access the conference call by dialing +1-844-348-3792 or +1-614-999-9309 (North America), 0800-028-8438 or 020-3107-0289 (United Kingdom) or 01-800-518-5094 (Colombia). The call will also be available via webcast at www.grantierra.com. Corporate Presentation: Gran Tierra's Corporate Presentation has been updated and is available on the Company website at www.grantierra.com. Contact Information For investor and media inquiries please contact: Gary Guidry President & Chief Executive Officer Ryan Ellson Executive Vice President & Chief Financial Officer Rodger Trimble Vice President, Investor Relations +1-403-265-3221 [email protected] About Gran Tierra Energy Inc. Gran Tierra Energy Inc. together with its subsidiaries is an independent international energy company focused on oil and natural gas exploration and production in Colombia and Ecuador. The Company is focused on its existing portfolio of assets in Colombia and Ecuador and will pursue new growth opportunities throughout Colombia and Latin America, leveraging our financial strength. The Company's common stock trades on the NYSE American, the Toronto Stock Exchange and the London Stock Exchange under the ticker symbol GTE. Additional information concerning Gran Tierra is available at www.grantierra.com. Information on the Company's website (including the Sustainability Report) does not constitute a part of this press release. Investor inquiries may be directed to [email protected]rra.com or (403) 265-3221. Gran Tierra's Securities and Exchange Commission filings are available on the SEC website at http://www.sec.gov and on SEDAR at http://www.sedar.com and UK regulatory filings are available on the National Storage Mechanism website at https://data.fca.org.uk/#/nsm/nationalstoragemechanism. Forward-Looking Statements and Legal Advisories: This press release contains opinions, forecasts, projections, expectations and other statements about future events or results that constitute forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and financial outlook and forward-looking information within the meaning of applicable Canadian securities laws (collectively, "forward-looking statements"), which can be identified by such terms as "expect," "plan," "guidance," "forecast," "project," "objective," "will," "believe," "should," "could," "allow" and other terms that are forward-looking in nature. Such forward-looking statements include, but are not limited to, the Company's expectations regarding its capital program, 2020 and 2021 outlook, the benefits of reduced capital spending and G&A expenses, the benefits of derivative transactions, well performance, production, including the restart of production, and future development costs, liquidity and access to capital, future plans when oil prices increase, the Company's strategies and results thereof, the Company's operations including planned operations, the use and the availability of certain tax refunds, the Company's guidance, including future production, operating netback, EBITDA and funds flow from operations, and the impact of the COVID-19 pandemic, disruptions to operations and the decline in industry conditions. Among the important factors that could cause actual results to differ materially from those indicated by the forward-looking statements in this press release are: the unprecedented impact of the COVID-19 pandemic and the actions of OPEC and non-OPEC countries and the procedures imposed by governments in response thereto; disruptions to local operations; the decline and volatility in oil and gas industry conditions and commodity prices; the severe imbalance in supply and demand for oil and natural gas; prices and markets for oil and natural gas are unpredictable and volatile; the accuracy of productive capacity of any particular field; the timing and impact of any resumption of operations; Gran Tierra's operations are located in South America and unexpected problems can arise due to guerilla activity or local blockades or protests; technical difficulties and operational difficulties may arise which impact the production, transport or sale of our products; geographic, political and weather conditions can impact the production, transport or sale of our products; the ability of Gran Tierra to execute its business plan and realize expected benefits from current initiatives (including a reduction of the capital program); the risk that unexpected delays and difficulties in developing currently owned properties may occur; the ability to replace reserves and production and develop and manage reserves on an economically viable basis; the accuracy of testing and production results and seismic data, pricing and cost estimates (including with respect to commodity pricing and exchange rates); the risk profile of planned exploration activities; the effects of drilling down-dip; the effects of waterflood and multi-stage fracture stimulation operations; the extent and effect of delivery disruptions, equipment performance and costs; actions by third parties; the timely receipt of regulatory or other required approvals for our operating activities; the failure of exploratory drilling to result in commercial wells; unexpected delays due to the limited availability of drilling equipment and personnel; the risk that current global economic and credit market conditions may impact oil prices and oil consumption more than Gran Tierra currently predicts, which could cause Gran Tierra to further modify its strategy and capital spending program; volatility or declines in the trading price of our common stock or bonds; the risk that Gran Tierra does not receive the anticipated benefits of government programs, including government tax refunds; Gran Tierra's ability to comply with financial covenants in its credit agreement; and the risk factors detailed from time to time in Gran Tierra's periodic reports filed with the Securities and Exchange Commission, including, without limitation, under the caption "Risk Factors" in Gran Tierra's Quarterly Report for the quarter ended March 31, 2020 and Annual Report on Form 10-K for the year ended December 31, 2019, many of which are beyond the Company's control. These filings are available on the SEC website at http://www.sec.gov and on SEDAR at www.sedar.com. The unprecedented decline in oil prices and related reduction in the Company's capital program has significantly reduced the Company's forecasted Covenant EBITDAX. The forward-looking statements contained in this press release are based on certain assumptions made by Gran Tierra based on management's experience and other factors believed to be appropriate. Gran Tierra believes these assumptions to be reasonable at this time, but the forward-looking statements are subject to risk and uncertainties, many of which are beyond Gran Tierra's control, which may cause actual results to differ materially from those implied or expressed by the forward looking statements. The risk that the assumptions on which the 2020 and 2021 outlook are based prove incorrect may increase the later the period to which the outlook relates. In particular, the unprecedented nature of the current economic downturn, pandemic and industry decline may make it particularly difficult to identify risks or predict the degree to which identified risks will impact Gran Tierra's business and financial condition. All forward-looking statements are made as of the date of this press release and the fact that this press release remains available does not constitute a representation by Gran Tierra that Gran Tierra believes these forward-looking statements continue to be true as of any subsequent date. Actual results may vary materially from the expected results expressed in forward-looking statements. Gran Tierra disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable law. The estimates of future production, operating netback, EBITDA, funds flow from operations and certain expenses set forth in this press release may be considered to be future-oriented financial information or a financial outlook for the purposes of applicable Canadian securities laws. Financial outlook and future-oriented financial information contained in this press release about prospective financial performance, financial position or cash flows are provided to give the reader a better understanding of the potential future performance of the Company in certain areas and are based on assumptions about future events, including economic conditions and proposed courses of action, based on management's assessment of the relevant information currently available, and to become available in the future. In particular, this press release contains projected operational and financial information for the second half of 2020 and 2021. These projections contain forward-looking statements and are based on a number of material assumptions and factors set out above. Actual results may differ significantly from the projections presented herein. These projections may also be considered to contain future-oriented financial information or a financial outlook. The actual results of Gran Tierra's operations for any period will likely vary from the amounts set forth in these projections, and such variations may be material. See above for a discussion of the risks that could cause actual results to vary. The future-oriented financial information and financial outlooks contained in this press release have been approved by management as of the date of this press release. Readers are cautioned that any such financial outlook and future-oriented financial information contained herein should not be used for purposes other than those for which it is disclosed herein. The Company and its management believe that the prospective operational and financial information has been prepared on a reasonable basis, reflecting management's best estimates and judgments, and represent, to the best of management's knowledge and opinion, the Company's expected course of action. However, because this information is highly subjective, it should not be relied on as necessarily indicative of future results. Non-GAAP Measures This press release includes non-GAAP financial measures as further described herein. These non-GAAP measures do not have a standardized meaning under GAAP. Investors are cautioned that these measures should not be construed as alternatives to net income or loss or other measures of financial performance as determined in accordance with GAAP. Gran Tierra's method of calculating these measures may differ from other companies and, accordingly, they may not be comparable to similar measures used by other companies. Each non-GAAP financial measure is presented along with the corresponding GAAP measure so as to not imply that more emphasis should be placed on the non-GAAP measure. Operating netback as presented is defined as oil and gas sales less operating and transportation expenses. See the table entitled Financial and Operational Highlights above for the components of consolidated operating netback and corresponding reconciliation. Cash netback as presented is defined as net income before DD&A expenses, goodwill and asset impairment, deferred income tax expense or recovery, stock-based compensation expense or recovery, amortization of debt issuance costs, non-cash lease expense, lease payments, unrealized foreign exchange gains and losses, financial instrument gains or losses, loss on redemption of Convertible Notes and cash settlement of financial instruments. Management believes that operating netback and cash netback are useful supplemental measures for investors to analyze financial performance and provide an indication of the results generated by Gran Tierra's principal business activities prior to the consideration of other income and expenses. A reconciliation from net (loss) income to cash netback is as follows: EBITDA, as presented, is defined as net (loss) income adjusted for DD&A expenses, interest expense and income tax expense or recovery. Adjusted EBITDA is defined as EBITDA adjusted for goodwill and asset impairment, unrealized foreign exchange gain or loss, stock based compensation expense or recovery, other loss and unrealized financial instruments gain or loss. Management uses this financial measure to analyze performance and (loss) income generated by our principal business activities prior to the consideration of how non-cash items affect that income, and believes that this financial measure is also useful supplemental information for investors to analyze performance and our financial results. A reconciliation from net (loss) income to EBITDA and Adjusted EBITDA as follows: Funds flow from operations, as presented, is net (loss) income adjusted for DD&A expenses, goodwill and asset impairment, deferred tax expense or recovery, stock-based compensation expense or recovery, amortization of debt issuance costs, non-cash lease expense, lease payments, unrealized foreign exchange gains and losses, financial instruments gain or loss and cash settlement of financial instruments. Management uses this financial measure to analyze performance and income generated by our principal business activities prior to the consideration of how non-cash items affect that income, and believes that this financial measure is also useful supplemental information for investors to analyze performance and our financial results. A reconciliation from net (loss) income to funds flow from operations is as follows: Gran Tierra is unable to provide forward-looking net income and oil and gas sales, the GAAP measures most directly comparable to the non-GAAP measures, such as Adjusted EBITDA and funds flow from operations and operating netback, respectively, due to the impracticality of quantifying certain components required by GAAP as a result of the inherent volatility in the value of certain financial instruments held by the Company and the inability to quantify the effectiveness of commodity price derivatives used to manage the variability in cash flows associated with the forecasted sale of its oil production and changes in commodity prices. Presentation of Oil and Gas Information BOEs have been converted on the basis of 6 thousand cubic feet ("Mcf") of natural gas to 1 bbl of oil. BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. In addition, given that the value ratio based on the current price of oil as compared with natural gas is significantly different from the energy equivalent of six to one, utilizing a BOE conversion ratio of 6 Mcf: 1 bbl would be misleading as an indication of value. References to a formation where evidence of hydrocarbons has been encountered is not necessarily an indicator that hydrocarbons will be recoverable in commercial quantities or in any estimated volume. Gran Tierra's reported production is a mix of light crude oil and medium and heavy crude oil for which there is not a precise breakdown since the Company's oil sales volumes typically represent blends of more than one type of crude oil. Well test results should be considered as preliminary and not necessarily indicative of long-term performance or of ultimate recovery. Well log interpretations indicating oil and gas accumulations are not necessarily indicative of future production or ultimate recovery. If it is indicated that a pressure transient analysis or well-test interpretation has not been carried out, any data disclosed in that respect should be considered preliminary until such analysis has been completed. References to thickness of "oil pay" or of a formation where evidence of hydrocarbons has been encountered is not necessarily an indicator that hydrocarbons will be recoverable in commercial quantities or in any estimated volume. This press release contains certain oil and gas metrics, including operating netback and cash netback, which do not have standardized meanings or standard methods of calculation and therefore such measures may not be comparable to similar measures used by other companies and should not be used to make comparisons. These metrics are calculated as described in this press release and management believes that they are useful supplemental measures for the reasons described in this press release. Such metrics have been included herein to provide readers with additional measures to evaluate the Company's performance; however, such measures are not reliable indicators of the future performance of the Company and future performance may not compare to the performance in previous periods.

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Delek US Holdings Reports Second Quarter 2020 Results

Delek US Holdings Reports Second Quarter 2020 Results- Reported second quarter net income of $87.7 million and Adjusted EBITDA loss of $(85.1) million- Business model transition to more stable cash flow is well underway- Midstream investments are coming to fruition and beginning to contribute- Retail and logistics segments continue performing well through the downturn- Agility to adapt operating expenses and capital spending to evolving macro environment- Quarterly dividend is being maintained at $0.31 per share BRENTWOOD, Tenn., Aug. 4, 2020 /PRNewswire/ -- Delek US Holdings, Inc. (NYSE: DK) ("Delek US") today announced financial results for its second quarter ended June 30, 2020. Delek US reported second quarter 2020 net income of $87.7 million, or $1.18 per diluted share, versus net income of $77.3 million, or $1.00 per diluted share, for the quarter ended June 30, 2019, which included a $16.8 million income tax benefit relating to incremental loss carrybacks provided by the CARES Act. On an adjusted basis, Delek US reported Adjusted net loss of $110.5 million, or $(1.50) per share for the second quarter 2020. This compares to Adjusted net income of $97.5 million, or $1.27 per share, in the prior-year period. Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") was $(85.1) million compared to Adjusted EBITDA of $210.7 million in the prior-year period. Reconciliations of net income reported under U.S. GAAP to Adjusted net income and Adjusted EBITDA are included in the financial tables attached to this release. Adjusted quarterly results were impacted by net losses totaling approximately $(74.9) million (after-tax) or $(1.02) per share, which is comprised of the following: an inventory headwind (or, an unfavorable "other inventory impact") on margin in the amount of $(91.4) million pre-tax, or $(69.9) million after-tax, related to FIFO accounting as compared to current market prices; and a negative margin impact of $(29.0) million pre-tax, or $(22.2) million after-tax, related to the sale of purchased product; realized hedging losses in the amount of $(134.0) million pre-tax, or $(103.9) million after-tax, the majority of which related to fixed price crude transactions that resulted in margin gains at our Tyler Refinery totaling $111.0 million pre-tax, or $84.9 million after-tax, where the magnitude was driven by the historic volatility in the crude market during the second quarter; and a reversal of the $36.1 million tax headwind disclosed in the first quarter of 2020. Note, the other inventory impact is separate from LCM inventory impacts that are excluded from adjusted results. Additionally, a breakdown of realized and unrealized hedging by segment is provided in the tables on page 10. Uzi Yemin, Chairman, President and Chief Executive Officer of Delek US, stated, "Our diversified portfolio is providing resilience during this period of weak refining margins with the logistics and retail segments generating a contribution margin above $80 million collectively. Our transition to midstream and more stable cash flow is well underway with previous capital investments poised to support ongoing growth from robust second quarter levels." Mr. Yemin continued, "Our company has a long history of being nimble and we remain agile in terms of flexing our capital spending and cost structure to the prevailing macro environment. We are on-track to exceed guidance of $100 million of cost reductions year over year. Capital spending was reduced dramatically from first quarter levels and we expect to remain disciplined with minimal outlay anticipated for the balance of the year. As of June 30th, the company had a cash balance of $849 million and is well positioned for a turbulent macro environment." Regular Quarterly Dividend Delek US announced today its Board of Directors declared a regular quarterly cash dividend of $0.31 per share. Shareholders of record on August 19, 2020 will receive this cash dividend payable on September 3, 2020. Liquidity As of June 30, 2020, Delek US had a cash balance of $849.0 million and total consolidated long-term debt of $2,454.9 million, resulting in net debt of $1,605.9 million. As of June 30, 2020, Delek Logistics Partners, LP (NYSE: DKL) ("Delek Logistics") had $995.2 million of total debt and $16.2 million of cash, which is included in the consolidated amounts on Delek US' balance sheet. Excluding Delek Logistics, Delek US had approximately $832.8 million in cash and $1,459.7 million of debt, or a $626.9 million net debt position. Refining Segment Refining contribution margin decreased to $59.7 million in the second quarter 2020 from $198.1 million in the second quarter 2019. On an adjusted basis, adjusted refining contribution margin was $(124.1) million in the second quarter 2020 compared to $216.5 million in the second quarter 2019. The current period adjusted refining contribution margin reflects $(90.6) million of other inventory impact, $(29.0) million of losses related to the sale of purchased product, and $(137.0) million of realized hedging losses, partially offset by a $111.0 million benefit from fixed price crude cost transactions. On a year-over-year basis, results were reduced primarily due to lower crude oil differentials, crack spreads and throughputs as a result of decreased demand due to COVID-19. Further, during the second quarter 2020, the realized Midland-Cushing crude oil discount was $0.48 per barrel compared to a realized discount of $1.77 per barrel in the prior year period. These factors were partially offset by the crude oil futures market that was in contango of $3.06 per barrel in the second quarter 2020 compared to contango of $0.20 per barrel in the second quarter 2019. Other inventory impact is primarily calculated by multiplying the change of barrels in refined inventory by the difference between current period average NYMEX WTI price and per barrel cost of materials and other for the period recognized on a FIFO basis. The other inventory impact on adjusted refining contribution margin was a charge of $(90.6) million in the second quarter 2020 compared to a charge of $(12.0) million in the second quarter 2019. Other inventory impact included a (charge) benefit to the refineries during the second quarter of 2020 of $(11.8) million for Big Spring, $(59.8) million for El Dorado and $(17.5) million Krotz Springs, as compared to a (charge) benefit of $(11.6) million for Big Spring, $1.1 million for El Dorado and $(1.5) million for Krotz Springs in the second quarter of 2019. Additionally, we buy and sell purchased product to optimize margins and to meet contractual demands, as needed. We recognized losses of $(29.0) million within the refining margins during the second quarter 2020, of which $(30.5) million relates to the Krotz Springs refinery, compared to gains totaling $8.3 million during the second quarter 2019. Logistics Segment The logistics segment contribution margin in the second quarter 2020 was $61.4 million compared to $44.2 million in the second quarter 2019. Results improved on a year-over-year basis primarily due to the drop down of the Delek Permian Gathering business and Trucking Assets, increased crude gathering, operating expense reductions and an increase in income from equity method investments. This was partially offset by lower West Texas gross margin on a year-over-year basis. Logistics segment contribution margin reflected another inventory impact to earnings relating to its West Texas inventory consisting of a charge totaling $(0.5) million during the second quarter of 2020 compared to a charge of $(0.8) million during the second quarter of 2019. Retail Segment For the second quarter 2020, contribution margin was $24.3 million compared to $17.6 million in the prior year period for the retail segment. Merchandise sales were approximately $89.4 million with an average retail margin of 30.8% in the second quarter 2020, compared to merchandise sales of approximately $83.3 million with an average retail margin of 31.2% in the prior-year period. Approximately 42.4 million retail fuel gallons were sold at an average margin of $0.45 per gallon in the second quarter 2020 compared to 53.7 million retail fuel gallons sold at an average margin of $0.29 per gallon in the second quarter 2019. In the second quarter 2020, the average merchandise store count was 253 compared to 277 in the prior year period. On a same store sales basis in the second quarter 2020, merchandise sales increased 13.1% and fuel gallons sold decreased 19.7% compared to the prior-year period. Retail segment contribution margin reflected another inventory impact to earnings relating to its fuel inventory consisting of a charge totaling $(3.2) million during the second quarter of 2020 compared to no charge during the second quarter of 2019. Corporate/Other Contribution margin from Corporate/Other was a loss of $15.5 million in the second quarter 2020 compared to a loss of $9.6 million in the prior-year period. Note, hedging gains (losses) related to the refining segment have been reclassified from the corporate and other segment to the refining segment starting in the first quarter of 2020 and have been retrospectively reclassified in 2019 for comparison purposes. Corporate/Other segment contribution margin reflected another inventory impact to earnings consisting of a benefit totaling $2.9 million during the second quarter of 2020 compared to no benefit during the second quarter of 2019. Second Quarter 2020 Results | Conference Call Information Delek US will hold a conference call to discuss its second quarter 2020 results on Wednesday, August 5, 2020 at 8:30 a.m. Central Time. Investors will have the opportunity to listen to the conference call live by going to www.DelekUS.com and clicking on the Investor Relations tab. Participants are encouraged to register at least 15 minutes early to download and install any necessary software. Presentation materials accompanying the call will be available on the investor relations tab of the Delek US website approximately five minutes prior to the start of the call. For those who cannot listen to the live broadcast, the online replay will be available on the website for 90 days. Investors may also wish to listen to Delek Logistics' (NYSE: DKL) second quarter 2020 earnings conference call that will be held on Wednesday, August 5, 2020 at 7:30 a.m. Central Time and review Delek Logistics' earnings press release. Market trends and information disclosed by Delek Logistics may be relevant to the logistics segment reported by Delek US. Both a replay of the conference call and press release for Delek Logistics are available online at www.deleklogistics.com. About Delek US Holdings, Inc. Delek US Holdings, Inc. is a diversified downstream energy company with assets in petroleum refining, logistics, renewable fuels and convenience store retailing. The refining assets consist of refineries operated in Tyler and Big Spring, Texas, El Dorado, Arkansas and Krotz Springs, Louisiana with a combined nameplate crude throughput capacity of 302,000 barrels per day. The logistics operations primarily consist of Delek Logistics Partners, LP (NYSE: DKL). Delek US Holdings, Inc. and its affiliates own approximately 71% (including the 2% general partner interest) of Delek Logistics Partners, LP. Delek Logistics Partners, LP is a growth-oriented master limited partnership focused on owning and operating midstream energy infrastructure assets. The convenience store retail operates approximately 253 convenience stores in central and West Texas and New Mexico. Safe Harbor Provisions Regarding Forward-Looking Statements This press release contains forward-looking statements that are based upon current expectations and involve a number of risks and uncertainties. Statements concerning current estimates, expectations and projections about future results, performance, prospects, opportunities, plans, actions and events and other statements, concerns, or matters that are not historical facts are "forward-looking statements," as that term is defined under the federal securities laws. These statements contain words such as "possible," "believe," "should," "could," "would," "predict," "plan," "estimate," "intend," "may," "anticipate," "will," "if", "potential," "expect" or similar expressions, as well as statements in the future tense. These forward-looking statements include, but are not limited to, statements regarding throughput at the Company's refineries; crude oil prices, discounts and quality and our ability to benefit therefrom; share repurchases; returning cash to shareholders; payments of dividends; growth; investments into our business; the performance and execution of our midstream growth initiatives, including the Big Spring Gathering System, the Red River joint venture and the Wink to Webster long-haul crude oil pipeline, and the flexibility, benefits and the expected returns therefrom; RINs waivers and tax credits and the value and benefit therefrom; cash and liquidity; opportunities and anticipated performance and financial position. Investors are cautioned that the following important factors, among others, may affect these forward-looking statements. These factors include, but are not limited to: uncertainty related to timing and amount of future share repurchases and dividend payments; risks and uncertainties with respect to the quantities and costs of crude oil we are able to obtain and the price of the refined petroleum products we ultimately sell; including uncertainties regarding future decisions by OPEC regarding production and pricing disputes between OPEC members and Russia; uncertainty relating to the impact of the COVID-19 outbreak on the demand for crude oil, refined products and transportation and storage services; risks related to Delek US' exposure to Permian Basin crude oil, such as supply, pricing, gathering, production and transportation capacity; gains and losses from derivative instruments; management's ability to execute its strategy of growth, including risks associated with acquisitions and dispositions; acquired assets may suffer a diminishment in fair value as a result of which we may need to record a write-down or impairment in carrying value of the asset; the possibility of litigation challenging renewable fuel standard waivers;changes in the scope, costs, and/or timing of capital and maintenance projects; the ability to grow the Big Spring Gathering System; the ability of the Red River joint venture to complete the expansion project to increase the Red River pipeline capacity; the ability of the joint venture to construct the Wink to Webster long haul crude oil pipeline; operating hazards inherent in transporting, storing and processing crude oil and intermediate and finished petroleum products; our competitive position and the effects of competition; the projected growth of the industries in which we operate; general economic and business conditions affecting the geographic areas in which we operate; and other risks described in Delek US' filings with the United States Securities and Exchange Commission (the "SEC"), including risks disclosed in our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other filings and reports with the SEC. Forward-looking statements should not be read as a guarantee of future performance or results and will not be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking information is based on information available at the time and/or management's good faith belief with respect to future events, and is subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the statements. Delek US undertakes no obligation to update or revise any such forward-looking statements to reflect events or circumstances that occur, or which Delek US becomes aware of, after the date hereof, except as required by applicable law or regulation. Non-GAAP Disclosures: Our management uses certain "non-GAAP" operational measures to evaluate our operating segment performance and non-GAAP financial measures to evaluate past performance and prospects for the future to supplement our GAAP financial information presented in accordance with U.S. GAAP. These financial and operational non-GAAP measures are important factors in assessing our operating results and profitability and include: Adjusted net income (loss) - calculated as net income attributable to Delek US adjusted for certain identified infrequently occurring items, non-cash items and items that are not attributable to our on-going operations (collectively, "Adjusting Items") recorded during the period; Adjusted net income (loss) per share - calculated as Adjusted net income (loss) divided by weighted average shares outstanding, assuming dilution, as adjusted for any anti-dilutive instruments that may not be permitted for consideration in GAAP earnings per share calculations but that nonetheless favorably impact dilution; Earnings before interest, taxes, depreciation and amortization ("EBITDA") - calculated as net income attributable to Delek adjusted to add back interest expense, income tax expense, depreciation and amortization; Adjusted EBITDA - calculated as EBITDA adjusted for the identified Adjusting Items in Adjusted net income (loss) that do not relate to interest expense, income tax expense, depreciation or amortization, and adjusted to include income (loss) attributable to non-controlling interests; Adjusted Segment Contribution Margin - calculated as Segment Contribution Margin adjusted for the identified Adjusting Items in Adjusted net income (loss) that impact Segment Contribution Margin; Refining margin - calculated as the difference between total refining revenues and total cost of materials and other; Adjusted refining margin -- calculated as refining margin adjusted for certain identified infrequently occurring items, non-cash items and items that are not attributable to our on-going refining operations recorded during the period; Refining margin per sales barrel - calculated as refining margin divided by our average refining sales in barrels per day (excluding purchased barrels) multiplied by 1,000 and multiplied by the number of days in the period; and Adjusted refining margin per sales barrel - calculated as adjusted refining margin divided by our average refining sales in barrels per day (excluding purchased barrels) multiplied by 1,000 and multiplied by the number of days in the period;We believe these non-GAAP operational and financial measures are useful to investors, lenders, ratings agencies and analysts to assess our ongoing performance because, when reconciled to their most comparable GAAP financial measure, they provide improved comparability between periods through the exclusion of certain items that we believe are not indicative of our core operating performance and that may obscure our underlying results and trends. Non-GAAP measures have important limitations as analytical tools, because they exclude some, but not all, items that affect net earnings and operating income. These measures should not be considered substitutes for their most directly comparable U.S. GAAP financial measures. Additionally, because Adjusted net income or loss, adjusted net income or loss per share, EBITDA and adjusted EBITDA, and Adjusted Segment Contribution Margin or any of our other identified non-GAAP measures may be defined differently by other companies in its industry, Delek US' definition may not be comparable to similarly titled measures of other companies. See the accompanying tables in this earnings release for a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures. Delek US Holdings, Inc. Condensed Consolidated Balance Sheets (Unaudited) (In millions, except share and per share data) June 30, 2020 December 31, 2019 ASSETS Current assets: Cash and cash equivalents $ 849.0 $ 955.3 Accounts receivable, net 480.4 792.6 Inventories, net of inventory valuation reserves 653.5 946.7 Other current assets 390.0 268.7 Total current assets 2,372.9 2,963.3 Property, plant and equipment: Property, plant and equipment 3,514.9 3,362.8 Less: accumulated depreciation (1,031.5) (934.5) Property, plant and equipment, net 2,483.4 2,428.3 Operating lease right-of-use assets 183.9 183.6 Goodwill 855.7 855.7 Other intangibles, net 110.0 110.3 Equity method investments 367.3 407.3 Other non-current assets 64.4 67.8 Total assets $ 6,437.6 $ 7,016.3 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 1,004.2 $ 1,599.7 Current portion of long-term debt 33.4 36.4 Obligation under Supply and Offtake Agreements 99.0 332.5 Current portion of operating lease liabilities 43.4 40.5 Accrued expenses and other current liabilities 409.3 346.8 Total current liabilities 1,589.3 2,355.9 Non-current liabilities: Long-term debt, net of current portion 2,421.5 2,030.7 Obligation under Supply and Offtake Agreements 215.0 144.8 Environmental liabilities, net of current portion 106.3 137.9 Asset retirement obligations 36.8 68.6 Deferred tax liabilities 335.4 267.9 Operating lease liabilities, net of current portion 140.2 144.3 Other non-current liabilities 33.8 30.9 Total non-current liabilities 3,289.0 2,825.1 Stockholders' equity: Preferred stock, $0.01 par value, 11,000,000 shares and 10,000,000 shares authorized at June 30,2020 and December 31, 2019, respectively, no shares issued and outstanding - - Common stock, $0.01 par value, 110,000,000 shares authorized, 91,232,964 shares and 90,987,025 shares issued at June 30, 2020 and December 31, 2019, respectively 0.9 0.9 Additional paid-in capital 1,160.1 1,151.9 Accumulated other comprehensive income 0.5 0.1 Treasury stock, 17,575,527 shares and 17,516,814 shares, at cost, as of June 30, 2020 and December 31, 2019, respectively (694.1) (692.2) Retained earnings 926.4 1,205.6 Non-controlling interests in subsidiaries 165.5 169.0 Total stockholders' equity 1,559.3 1,835.3 Total liabilities and stockholders' equity $ 6,437.6 $ 7,016.3 Delek US Holdings, Inc. Condensed Consolidated Statements of Income (Unaudited) (1) (In millions, except share and per share data) Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Net revenues $ 1,535.5 $ 2,480.3 $ 3,356.7 $ 4,680.2 Cost of sales: Cost of materials and other 1,277.8 2,067.7 3,188.4 3,767.1 Operating expenses (excluding depreciation and amortization presented below) 103.4 135.8 232.6 276.7 Depreciation and amortization 53.6 42.6 100.6 81.9 Total cost of sales 1,434.8 2,246.1 3,521.6 4,125.7 Operating expenses related to retail and wholesale business (excluding depreciation and amortization presented below) 24.4 26.5 49.7 52.3 General and administrative expenses 61.7 69.5 127.4 131.7 Depreciation and amortization 6.0 7.5 11.6 15.0 Other operating income, net (14.2) (3.6) (14.9) (1.2) Total operating costs and expenses 1,512.7 2,346.0 3,695.4 4,323.5 Operating income (loss) 22.8 134.3 (338.7) 356.7 Interest expense 29.8 32.8 66.1 61.5 Interest income (0.5) (3.3) (2.2) (5.8) Income from equity method investments (10.7) (9.3) (15.8) (11.9) Gain on sale on non-operating refinery (56.9) - (56.9) - Other (income) expense, net (1.5) 4.9 (2.4) 3.5 Total non-operating (income) expense, net (39.8) 25.1 (11.2) 47.3 Income (loss) before income tax (benefit) expense 62.6 109.2 (327.5) 309.4 Income tax (benefit) expense (35.9) 24.6 (119.0) 70.4 Income (loss) from continuing operations, net of tax 98.5 84.6 (208.5) 239.0 Discontinued operations: Loss from discontinued operations, including gain (loss) on sale of discontinued operations - (1.0) - (1.0) Income tax benefit - (0.2) - (0.2) Loss from discontinued operations, net of tax - (0.8) - (0.8) Net income (loss) 98.5 83.8 (208.5) 238.2 Net income attributed to non-controlling interests 10.8 6.5 18.2 11.6 Net income (loss) attributable to Delek $ 87.7 $ 77.3 $ (226.7) $ 226.6 Basic income (loss) per share: Income (loss) from continuing operations $ 1.19 $ 1.02 $ (3.08) $ 2.95 Loss from discontinued operations - (0.01) $ - $ (0.01) Basic (loss) income per share $ 1.19 $ 1.01 $ (3.08) $ 2.94 Diluted income (loss) per share: Income (loss) from continuing operations $ 1.18 $ 1.01 $ (3.08) $ 2.92 Loss from discontinued operations - (0.01) $ - $ (0.01) Diluted (loss) income per share $ 1.18 $ 1.00 $ (3.08) $ 2.91 Weighted average common shares outstanding: Basic 73,547,582 76,598,846 73,492,656 77,192,763 Diluted 74,028,043 77,280,692 73,492,656 77,883,285 Dividends declared per common share outstanding $ 0.31 $ 0.28 $ 0.93 $ 0.55 Delek US Holdings, Inc. Condensed Cash Flow Data (Unaudited) (In millions) Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Cash flows from operating activities: Net cash (used in) provided by operating activities $ (169.0) $ 102.0 (323.1) 235.4 Cash flows from investing activities: Net cash used in investing activities (9.3) (202.4) (155.9) (329.4) Cash flows from financing activities: Net cash provided by (used in) financing activities 242.4 62.1 372.7 (33.9) Net decrease in cash and cash equivalents 64.1 (38.3) (106.3) (127.9) Cash and cash equivalents at the beginning of the period 784.9 989.7 955.3 1,079.3 Cash and cash equivalents of continuing operations at the end of the period $ 849.0 $ 951.4 $ 849.0 $ 951.4 COVID-19 Tax Legislative Changes On March 27, 2020, the Coronavirus Aid Relief, and Economic Security Act (the "CARES Act") was enacted into law. The Act includes several significant provisions for corporations, including the usage of net operating losses, interest deductions and payroll benefits. Pursuant to the provisions of the CARES Act, we recognized $16.8 million of current federal income tax benefit for the three and six months ended June 30, 2020, attributable to anticipated tax refunds from net operating loss carryback to prior 35% tax rate years. Additionally, we recorded an income tax receivable totaling $193 million as of June 30, 2020 related to the net operating loss carryback, which we expect to collect in the first half of 2021. Finally, we deferred $4.4 million of payroll tax payments under the provisions of the CARES Act during the six months ended June 30, 2020, which will be payable in equal installments in December 2021 and December 2022. Delek US Holdings, Inc. Segment Data (Unaudited) (In millions) Three Months Ended June 30, 2020 Refining Logistics Retail Corporate, Other and Eliminations Consolidated Net revenues (excluding inter-segment fees and revenues) $ 1,001.9 $ 27.3 $ 165.4 $ 340.9 $ 1,535.5 Inter-segment fees and revenues 75.1 90.4 - (165.5) - Operating costs and expenses: - Cost of materials and other 928.6 43.9 119.6 185.7 1,277.8 Operating expenses (excluding depreciation and amortization presented below) 88.7 12.4 21.5 5.2 127.8 Segment contribution margin $ 59.7 $ 61.4 $ 24.3 $ (15.5) $ 129.9 Depreciation and amortization $ 44.8 $ 8.7 $ 3.3 $ 2.8 59.6 General and administrative expenses 61.7 Other operating income, net (14.2) Operating income $ 22.8 Capital spending (excluding business combinations) $ 12.2 $ 0.7 $ 1.3 $ 0.8 $ 15.0 Three Months Ended June 30, 2019 Refining (1) Logistics Retail Corporate, Other and Eliminations (1) Consolidated Net revenues (excluding inter-segment fees and revenues) $ 2,152.5 $ 93.1 $ 224.5 $ 10.2 $ 2,480.3 Inter-segment fees and revenues 215.3 62.2 - (277.5) - Operating costs and expenses: Cost of materials and other 2,054.7 93.8 182.1 (262.9) 2,067.7 Operating expenses (excluding depreciation and amortization presented below) 115.0 17.3 24.8 5.2 162.3 Segment contribution margin $ 198.1 $ 44.2 $ 17.6 $ (9.6) $ 250.3 Depreciation and amortization $ 33.2 $ 6.7 $ 4.2 $ 6.0 50.1 General and administrative expenses 69.5 Other operating income, net (3.6) Operating income $ 134.3 Capital spending (excluding business combinations) $ 48.9 $ 1.3 $ 5.4 $ 30.4 $ 86.0 Delek US Holdings, Inc. Segment Data (Unaudited) (In millions) Six Months Ended June 30, 2020 Refining Logistics Retail Corporate, Other and Eliminations Consolidated Net revenues (excluding inter-segment fees and revenues) $ 2,571.1 $ 84.2 $ 344.0 $ 357.4 $ 3,356.7 Inter-segment fees and revenues 233.8 196.9 - (430.7) - Operating costs and expenses: Cost of materials and other 2,835.2 145.2 263.7 (55.7) 3,188.4 Operating expenses (excluding depreciation and amortization presented below) 200.4 27.2 43.7 11.0 282.3 Segment contribution margin $ (230.7) $ 108.7 $ 36.6 $ (28.6) $ (114.0) Depreciation and amortization $ 82.0 $ 15.0 $ 6.2 $ 9.0 112.2 General and administrative expenses 127.4 Other operating income, net (14.9) Operating loss $ (338.7) Capital spending (excluding business combinations) $ 180.3 $ 3.7 $ 7.5 $ 11.8 $ 203.3 Six Months Ended June 30, 2019 Refining (1) Logistics Retail Corporate, Other and Eliminations (1) Consolidated Net revenues (excluding inter-segment fees and revenues) $ 4,059.9 $ 182.9 $ 421.7 $ 15.7 $ 4,680.2 Inter-segment fees and revenues 399.9 124.9 - (524.8) - Operating costs and expenses: Cost of materials and other 3,723.8 190.1 345.5 (492.3) 3,767.1 Operating expenses (excluding depreciation and amortization presented below) 236.0 33.4 48.4 11.2 329.0 Segment contribution margin $ 500.0 $ 84.3 $ 27.8 $ (28.0) $ 584.1 Depreciation and amortization $ 64.3 $ 13.2 $ 8.5 10.9 96.9 General and administrative expenses 131.7 Other operating income, net (1.2) Operating income $ 356.7 Capital spending (excluding business combinations) $ 130.5 $ 2.2 $ 10.5 $ 71.1 $ 214.3 (1) The refining segment results of operations for the three and six months ended June 30, 2019, includes hedging gains, a component of cost of materials and other, of $19.8 million and $27.4 million, respectively, which was previously included and reported in corporate, other and eliminations. Delek US Holdings, Inc. Schedule of Hedging Gains (Losses) $ in millions Three Months Ended June 30, 2020 Hedging Gains (Losses) Included in Segment Contribution Margin Refining Logistics Retail Corporate, Other and Eliminations Consolidated Unrealized hedging gain (loss) $ (9.9) $ (2.3) $ - $ (11.2) $ (23.4) Realized hedging gain (loss) (137.0) 1.3 - 1.7 (134.0) Total hedging gain (loss) $ (146.9) $ (1.0) $ - $ (9.5) $ (157.4) Delek US Holdings, Inc. Schedule of Hedging Gains (Losses) $ in millions Three Months Ended June 30, 2019 Hedging Gains (Losses) Included in Segment Contribution Margin Refining Logistics Retail Corporate, Other and Eliminations Consolidated Unrealized hedging gain (loss) $ (6.8) $ 0.2 $ - $ 3.0 $ (3.6) Realized hedging gain (loss) 32.4 0.2 - 0.4 33.0 Total hedging gain (loss) $ 25.6 $ 0.4 $ - $ 3.4 $ 29.4 Delek US Holdings, Inc. Schedule of Hedging Gains (Losses) $ in millions Six Months Ended June 30, 2020 Hedging Gains (Losses) Included in Segment Contribution Margin Refining Logistics Retail Corporate, Other and Eliminations Consolidated Unrealized hedging gain (loss) $ 38.7 $ - $ - $ (10.1) $ 28.6 Realized hedging gain (loss) (105.2) 2.1 - (6.9) (110.0) Total hedging gain (loss) $ (66.5) $ 2.1 $ - $ (17.0) $ (81.4) Delek US Holdings, Inc. Schedule of Hedging Gains (Losses) $ in millions Six Months Ended June 30, 2019 Hedging Gains (Losses) Included in Segment Contribution Margin Refining Logistics Retail Corporate, Other and Eliminations Consolidated Unrealized hedging gain (loss) $ (23.2) $ - $ - $ (7.5) $ (30.7) Realized hedging gain (loss) 67.4 (0.6) - 8.4 75.2 Total hedging gain (loss) $ 44.2 $ (0.6) $ - $ 0.9 $ 44.5 Refining Segment Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Tyler, TX Refinery (Unaudited) (Unaudited) Days in period 91 91 182 181 Total sales volume - refined product (average barrels per day)(1) 69,746 77,657 72,364 73,863 Products manufactured (average barrels per day): Gasoline 37,225 39,997 38,633 39,671 Diesel/Jet 27,897 31,505 27,650 29,455 Petrochemicals, LPG, NGLs 3,216 3,318 2,604 2,690 Other 1,319 1,654 1,281 1,411 Total production 69,657 76,474 70,168 73,227 Throughput (average barrels per day): Crude oil 64,408 71,918 65,187 68,219 Other feedstocks 5,848 5,106 5,648 5,785 Total throughput 70,256 77,024 70,835 74,004 Per barrel of refined product sales: Tyler refining margin (2) $ 32.72 $ 12.15 $ 4.62 $ 16.84 Tyler adjusted refining margin (2) $ 21.24 $ 12.12 $ 10.32 $ 13.98 Operating expenses $ 3.00 $ 3.65 $ 3.38 $ 4.15 Crude Slate: (% based on amount received in period) WTI crude oil 94.2 % 87.7 % 93.3 % 89.3 % East Texas crude oil 5.8 % 12.3 % 6.7 % 10.7 % El Dorado, AR Refinery Days in period 91 91 182 181 Total sales volume - refined product (average barrels per day)(1) 76,059 51,002 76,805 51,717 Products manufactured (average barrels per day): Gasoline 34,346 21,821 35,376 21,159 Diesel 30,060 17,802 28,849 16,633 Petrochemicals, LPG, NGLs 2,063 551 2,062 678 Asphalt 6,049 6,961 6,345 5,899 Other 605 683 788 661 Total production 73,123 47,818 73,420 45,030 Throughput (average barrels per day): Crude oil 71,406 47,935 71,514 44,542 Other feedstocks 2,369 359 2,506 1,270 Total throughput 73,775 48,294 74,020 45,812 Per barrel of refined product sales: El Dorado refining margin $ 3.08 $ 8.93 $ (2.74) $ 11.21 El Dorado adjusted refining margin $ (4.29) 8.98 $ (2.74) $ 10.84 Operating expenses $ 3.53 $ 5.93 $ 3.98 $ 6.31 Crude Slate: (% based on amount received in period) WTI crude oil 51.4 % 43.9 % 42.9 % 42.6 % Local Arkansas crude oil 14.7 % 29.0 % 17.0 % 28.3 % Other 33.9 % 27.1 % 40.1 % 29.1 % Refining Segment Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Big Spring, TX Refinery (Unaudited) (Unaudited) Days in period - based on date acquired 91 91 182 181 Total sales volume - refined product (average barrels per day) (1) 70,679 78,158 54,382 79,993 Products manufactured (average barrels per day): Gasoline 35,789 36,428 25,198 37,657 Diesel/Jet 27,924 26,638 18,860 27,494 Petrochemicals, LPG, NGLs 3,563 3,679 2,472 3,763 Asphalt 2,055 1,900 1,452 1,707 Other 1,208 1,354 844 1,296 Total production 70,539 69,999 48,826 71,917 Throughput (average barrels per day): Crude oil 70,327 72,965 50,116 72,649 Other feedstocks 1,483 (581) 78 648 Total throughput 71,810 72,384 50,194 73,297 Per barrel of refined product sales: Big Spring refining margin $ 7.88 $ 13.77 $ 0.71 $ 16.00 Big Spring adjusted refining margin $ 3.76 $ 13.82 $ 0.73 $ 15.79 Operating expenses $ 3.55 $ 3.69 $ 4.89 $ 3.75 Crude Slate: (% based on amount received in period) WTI crude oil 83.9 % 73.3 % 75.1 % 76.3 % WTS crude oil 16.1 % 26.7 % 24.9 % 23.7 % Krotz Springs, LA Refinery Days in period - based on date acquired 91 91 182 181 Total sales volume - refined product (average barrels per day) (1) 61,441 75,283 71,229 76,749 Products manufactured (average barrels per day): Gasoline 17,461 34,498 24,135 36,270 Diesel/Jet 21,742 29,776 26,337 30,082 Heavy oils 215 1,110 473 1,100 Petrochemicals, LPG, NGLs 840 4,264 1,923 5,758 Other 18,871 - 14,704 52 Total production 59,129 69,648 67,572 73,262 Throughput (average barrels per day): Crude oil 59,468 70,162 65,975 71,240 Other feedstocks 1,114 (1,327) 2,104 908 Total throughput 60,582 68,835 68,079 72,148 Per barrel of refined product sales: Krotz Springs refining margin $ (0.64) $ 9.69 $ (1.12) $ 10.84 Krotz Springs adjusted refining margin $ (8.12) $ 9.72 $ (1.12) $ 10.36 Operating expenses $ 3.53 $ 4.39 $ 3.47 $ 4.14 Crude Slate: (% based on amount received in period) WTI Crude 69.7 % 61.0 % 67.7 % 62.0 % Gulf Coast Sweet Crude 30.3 % 39.0 % 32.3 % 38.0 % (1) Includes inter-refinery sales and sales to other segments which are eliminated in consolidation. See tables below. (2) Tyler's refining margin per barrel and the adjusted refining margin per barrel for the second quarter 2020 both reflect the $111.0 million margin benefit of favorable fixed price crude cost transactions during the quarter, but exclude the offsetting realized hedging losses of approximately $(111.0) million. Giving effect to the related hedging losses, both the refining margin per barrel and the adjusted refining margin per barrel would have decreased by $(17.49). Such margin impact was unusually large because of the historic volatility in the crude commodities market during the period. Included in the refinery statistics above are the following inter-refinery and sales to other segments: Inter-refinery Sales Three Months Ended June 30, Six Months Ended June 30, (in barrels per day) 2020 2019 2020 2019 (Unaudited) (Unaudited) Tyler refined product sales to other Delek refineries 2,190 914 1,477 557 El Dorado refined product sales to other Delek refineries 1,074 988 446 1,886 Big Spring refined product sales to other Delek refineries 1,269 653 1,147 903 Krotz Springs refined product sales to other Delek refineries 197 10,211 245 5,530 Refinery Sales to Other Segments Three Months Ended June 30, Six Months Ended June 30, (in barrels per day) 2020 2019 2020 2019 (Unaudited) (Unaudited) Tyler refined product sales to other Delek segments 1,592 24 2,400 281 El Dorado refined product sales to other Delek segments 11 58 169 155 Big Spring refined product sales to other Delek segments 20,570 25,215 22,841 26,034 Pricing statistics (average for the period presented) Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 (Unaudited) (Unaudited) WTI - Cushing crude oil (per barrel) $ 29.77 $ 59.80 $ 37.93 $ 57.36 WTI - Midland crude oil (per barrel) $ 29.77 $ 57.56 $ 37.90 $ 55.65 WTS -- Midland crude oil (per barrel) (1) $ 29.61 $ 57.93 $ 37.69 $ 55.95 LLS (per barrel) (1) $ 31.30 $ 67.06 $ 39.73 $ 64.73 Brent crude oil (per barrel) $ 33.35 $ 68.44 $ 42.16 $ 66.14 U.S. Gulf Coast 5-3-2 crack spread (per barrel) (1) $ 6.67 $ 17.74 $ 8.74 $ 15.77 U.S. Gulf Coast 3-2-1 crack spread (per barrel) (1) $ 7.08 $ 19.24 $ 9.32 $ 17.23 U.S. Gulf Coast 2-1-1 crack spread (per barrel) (1) $ 2.35 $ 9.75 $ 5.35 $ 8.55 U.S. Gulf Coast Unleaded Gasoline (per gallon) $ 0.81 $ 1.79 $ 1.02 $ 1.66 Gulf Coast Ultra low sulfur diesel (per gallon) $ 0.91 $ 1.94 $ 1.19 $ 1.91 U.S. Gulf Coast high sulfur diesel (per gallon) $ 0.73 $ 1.80 $ 1.04 $ 1.78 Natural gas (per MMBTU) $ 1.75 $ 2.51 $ 1.81 $ 2.69 (1) For our Tyler and El Dorado refineries, we compare our per barrel refining product margin to the Gulf Coast 5-3-2 crack spread consisting of WTI Cushing crude, U.S. Gulf Coast CBOB and U.S, Gulf Coast Pipeline No. 2 heating oil (ultra low sulfur diesel). For our Big Spring refinery, we compare our per barrel refined product margin to the Gulf Coast 3-2-1 crack spread consisting of WTI Cushing crude, Gulf Coast 87 Conventional gasoline and Gulf Coast ultra-low sulfur diesel, and for our Krotz Springs refinery, we compare our per barrel refined product margin to the Gulf Coast 2-1-1 crack spread consisting of LLS crude oil, Gulf Coast 87 Conventional gasoline and U.S, Gulf Coast Pipeline No. 2 heating oil (high sulfur diesel). The Tyler refinery's crude oil input is primarily WTI Midland and east Texas, while the El Dorado refinery's crude input is primarily a combination of WTI Midland, local Arkansas and other domestic inland crude oil. The Big Spring refinery's crude oil input is primarily comprised of WTS and WTI Midland. The Krotz Springs refinery's crude oil input is primarily comprised of LLS and WTI Midland. Delek US Holdings, Inc. Reconciliation of Refining Margin per barrel to Adjusted Refining Margin per barrel (1) $ in millions, except per share data Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 (Unaudited) (Unaudited) Tyler (2) Reported refining margin, $ per barrel $ 32.72 $ 12.15 $ 4.62 $ 16.84 Adjustments: LCM net inventory valuation loss (benefit) (11.48) (0.03) 5.70 (2.86) Adjusted refining margin $/bbl $ 21.24 $ 12.12 $ 10.32 $ 13.98 El Dorado (3) Reported refining margin, $ per barrel $ 3.08 $ 8.93 $ (2.74) $ 11.21 Adjustments: LCM net inventory valuation loss (benefit) (7.37) 0.05 - (0.37) Adjusted refining margin $/bbl $ (4.29) $ 8.98 $ (2.74) $ 10.84 Big Spring (4) Reported refining margin, $ per barrel $ 7.88 $ 13.77 $ 0.71 $ 16.00 Adjustments: LCM net inventory valuation loss (benefit) (4.12) 0.05 0.02 (0.21) Adjusted refining margin $/bbl $ 3.76 $ 13.82 $ 0.73 $ 15.79 Krotz Springs (5) Reported refining margin, $ per barrel $ (0.64) $ 9.69 $ (1.12) $ 10.84 Adjustments: LCM net inventory valuation loss (benefit) (7.48) 0.03 - (0.48) Adjusted refining margin $/bbl $ (8.12) $ 9.72 $ (1.12) $ 10.36 (1) Adjusted refining margin per barrel is presented to provide a measure to evaluate performance excluding inventory valuation adjustments and other items at the individual refinery level. Delek US believes that the presentation of adjusted measures provides useful information to investors in assessing its results of operations at each refinery. Because adjusted refining margin per barrel may be defined differently by other companies in its industry, Delek US' definition may not be comparable to similarly titled measures of other companies. (2) Tyler adjusted refining margins exclude the following items. Net inventory valuation loss/benefit - There was approximately $72.8 million and $0.2 million of valuation benefit in the second quarter 2020 and 2019, respectively. There was approximately $75.1 million of valuation loss and $38.3 million of valuation benefit for the six months ended June 30, 2020 and 2019, respectively. These amounts resulted from lower of cost or market adjustments on LIFO inventory in the respective periods. Note also that Tyler's refining margin per barrel and the adjusted refining margin per barrel for the second quarter 2020 both reflect the $111.0 million margin benefit of favorable fixed price crude cost transactions during the quarter, but exclude the offsetting realized hedging losses of approximately $(111.0) million. Giving effect to the related hedging losses, both the refining margin per barrel and the adjusted refining margin per barrel would have decreased by $(17.49). Such margin impact was unusually large because of the historic volatility in the crude commodities market during the period. (3) El Dorado adjusted refining margins exclude the following items. Net inventory valuation loss/benefit - There was approximately $51.0 million of valuation benefit as compared to a $0.3 million of valuation loss in the second quarter 2020 and 2019, respectively. There was a nominal amount of valuation benefit and $3.4 million of valuation benefit for the six months ended June 30, 2020 and 2019, respectively. These amounts resulted from lower of cost or net realizable value adjustments on FIFO inventory in the respective periods. (4) Big Spring adjusted refining margins exclude the following items. Net inventory valuation loss/benefit - There was approximately $26.5 million of valuation benefit and $0.4 million of valuation losses in the second quarter 2020 and 2019, respectively. There was approximately $0.2 million of valuation loss and $3.0 million of valuation benefit for the six months ended June 30, 2020 and 2019, respectively. These amounts resulted from lower of cost or net realizable value adjustments on FIFO inventory in the respective periods. (5) Krotz Springs adjusted refining margins exclude the following items. Net inventory valuation loss/benefit - There was approximately $41.8 million of valuation benefit and $0.2 million of valuation loss in the second quarter 2020 and 2019, respectively. There was nominal amount of valuation benefit and $6.7 million of valuation benefit for the six months ended June 30, 2020 and 2019, respectively.These amounts resulted from lower of cost or net realizable value adjustments on FIFO inventory in the respective periods. Logistics Segment Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 (Unaudited) (Unaudited) Pipelines & Transportation: (average bpd) Lion Pipeline System: Crude pipelines (non-gathered) 79,066 37,625 75,995 33,179 Refined products pipelines 56,093 29,893 55,110 26,511 SALA Gathering System 9,447 14,315 13,449 14,798 East Texas Crude Logistics System 10,275 19,550 12,224 18,835 Wholesale Marketing & Terminalling: East Texas - Tyler Refinery sales volumes (average bpd) (1) 65,028 71,123 68,839 69,857 West Texas wholesale marketing throughputs (average bpd) 9,143 11,404 12,612 12,418 West Texas wholesale marketing margin per barrel $ 0.64 $ 6.25 $ 1.96 $ 4.84 Big Spring wholesale marketing throughputs (average bpd) 76,004 82,964 71,195 85,339 Terminalling throughputs (average bpd) (2) 138,593 156,922 136,961 154,643 (1) Excludes jet fuel and petroleum coke. (2) Consists of terminalling throughputs at our Tyler, Big Spring, Big Sandy and Mount Pleasant, Texas, El Dorado and North Little Rock, Arkansas and Memphis and Nashville, Tennessee terminals. Retail Segment Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 (Unaudited) (Unaudited) Number of stores (end of period) 253 263 253 263 Average number of stores 253 277 253 279 Retail fuel sales (thousands of gallons) 42,436 53,743 90,376 107,633 Average retail gallons sold per average number of fuel stores (in thousands) 171 201 365 399 Retail fuel margin ($ per gallon) (1) $ 0.45 $ 0.29 $ 0.37 $ 0.25 Merchandise sales (in millions) $ 89.4 $ 83.3 $ 161.1 $ 158.6 Merchandise sales per average number of stores (in millions) $ 0.4 $ 0.3 $ 0.6 $ 0.6 Merchandise margin % 30.8 % 31.2 % 31.1 % 31.1 % Same-Store Comparison (2) Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 (Unaudited) (Unaudited) Change in same-store fuel gallons sold (19.7) % 1.7 % (13.9) % 3.1 % Change in same-store merchandise sales 13.1 % (2.5) % 7.6 % (0.5) % (1) Retail fuel margin represents gross margin on fuel sales in the retail segment, and is calculated as retail fuel sales revenue less retail fuel cost of sales. The retail fuel margin per gallon calculation is derived by dividing retail fuel margin by the total retail fuel gallons sold for the period. (2) Same-store comparisons include period-over-period increases or decreases in specified metrics for stores that were in service at both the beginning of the earliest period and the end of the most recent period used in the comparison. Delek US Holdings, Inc. Reconciliation of Amounts Reported Under U.S. GAAP $ in millions Three Months Ended June 30, Six Months Ended June 30, Reconciliation of Net Income (Loss) attributable to Delek to Adjusted Net Income (Loss) 2020 2019 2020 2019 (Unaudited) (Unaudited) Reported net income (loss) attributable to Delek $ 87.7 $ 77.3 $ (226.7) $ 226.6 Adjustments Net inventory valuation (benefit) loss (203.1) 0.6 75.1 (51.5) Tax effect of inventory valuation 47.7 (0.1) (17.7) 12.1 Net after tax inventory valuation (benefit) loss (155.4) 0.5 57.4 (39.4) Unrealized hedging (gain) loss 23.4 3.6 (28.6) 30.7 Tax effect of unrealized hedging (gain) loss (5.3) (0.8) 6.5 (6.9) Net after tax unrealized hedging (gain) loss 18.1 2.8 (22.1) 23.8 Gain from sale of Bakersfield non-operating refinery (56.9) - (56.9) - Tax effect of gain from sale of Bakersfield non-operating refinery 12.8 - 12.8 - Net after tax effect of gain from sale of Bakersfield non-operating refinery (44.1) - (44.1) - Non-operating, pre-acquisition litigation contingent losses and related legal expenses - 6.7 - 6.7 Tax effect of non-operating pre-acquisition litigation contingent losses and related legal expenses - (1.5) - (1.5) Net after tax non-operating pre-acquisition litigation contingent losses and related legal expenses - 5.2 - 5.2 Retroactive biodiesel tax credit (1) - 11.0 - 20.7 Tax effect of retroactive biodiesel tax credit - (0.1) - (0.2) Net after tax retroactive biodiesel tax credit - 10.9 - 20.5 Discontinued operations (income) loss - 1.0 - 1.0 Tax effect of discontinued operations - (0.2) - (0.2) Net after tax discontinued operations (income) loss - 0.8 - 0.8 Tax benefit from loss carryback provided by CARES Act (2) (16.8) - (16.8) - Tax adjustment to reduce deferred tax asset valuation allowance resulting from Big Springs Gathering Assets Acquisition - - (22.3) - Total after tax adjustments (198.2) 20.2 (47.9) 10.9 Adjusted net income (loss) $ (110.5) $ 97.5 $ (274.6) $ 237.5 (1) An adjustment for the portion of the retroactive biodiesel tax credit reenacted in December 2019 that was attributable to 2019 has been included in the three and six months ended June 30, 2019 for comparability. (2) As a result of the reinstatement of the tax-loss carryback provisions under the Coronavirus Aid, Relief, and Economic Security Act (the "CARES" Act), we recognized an additional tax benefit in the second quarter 2020 from applying the carryback to periods with a 35% tax rate. Delek US Holdings, Inc. Reconciliation of Amounts Reported Under U.S. GAAP per share data Three Months Ended June 30, Six Months Ended June 30, Reconciliation of U.S. GAAP Income (Loss) per share to Adjusted Net Income (Loss) per share 2020 2019 2020 2019 (Unaudited) (Unaudited) Reported diluted income (loss) per share $ 1.18 $ 1.00 $ (3.08) $ 2.91 Adjustments, after tax (per share) (1) (2) Adjustment to convert reported diluted income (loss) per share to basic (in periods when adjusted earnings is a loss but we have GAAP net income) 0.01 - - - Net inventory valuation loss (benefit) (2.11) 0.01 0.78 (0.51) Unrealized hedging (gain) loss 0.25 0.04 (0.30) 0.30 Gain from sale of Bakersfield non-operating refinery (0.60) - (0.60) - Non-operating, pre-acquisition litigation contingent losses and related legal expenses - 0.07 - 0.07 Retroactive biodiesel tax credit - 0.14 - 0.26 Discontinued operations (income) loss - 0.01 - 0.01 Tax benefit from loss carryback provided by CARES Act (0.23) - (0.23) - Tax adjustment to reduce deferred tax asset valuation allowance resulting from Big Springs Gathering Assets Acquisition - - (0.30) - Total adjustments (2.68) 0.27 (0.65) 0.13 Adjusted net income (loss) per share $ (1.50) $ 1.27 $ (3.73) $ 3.04 (1) The tax calculation is based on the appropriate marginal income tax rate related to each adjustment and for each respective time period, which is applied to the adjusted items in the calculation of adjusted net income in all periods. (2) For periods of Adjusted net loss, Adjustments (Adjusting Items) and Adjusted net loss per share are presented using basic weighted average shares outstanding. Delek US Holdings, Inc. Reconciliation of Amounts Reported Under U.S. GAAP $ in millions Three Months Ended June 30, Six Months Ended June 30, Reconciliation of Net Income (Loss) attributable to Delek to Adjusted EBITDA 2020 2019 2020 2019 (Unaudited) (Unaudited) Reported net income (loss) attributable to Delek $ 87.7 $ 77.3 $ (226.7) $ 226.6 Add: Interest expense, net 29.3 29.5 63.9 55.7 Income tax (benefit) expense - continuing operations (35.9) 24.6 (119.0) 70.4 Depreciation and amortization 59.6 50.1 112.2 96.9 EBITDA 140.7 181.5 (169.6) 449.6 Adjustments Net inventory valuation (benefit) loss (203.1) 0.6 75.1 (51.5) Unrealized hedging (gain) loss 23.4 3.6 (28.6) 30.7 Gain from sale of Bakersfield non-operating refinery (56.9) - (56.9) - Non-operating, pre-acquisition litigation contingent losses and related legal expenses - 6.7 - 6.7 Retroactive biodiesel tax credit (1) - 11.0 - 20.7 Discontinued operations (income) loss, net of tax - 0.8 - 0.8 Net income attributable to non-controlling interest 10.8 6.5 18.2 11.6 Total adjustments (225.8) 29.2 7.8 19.0 Adjusted EBITDA $ (85.1) $ 210.7 $ (161.8) $ 468.6 (1) The portion of the retroactive biodiesel tax credit reenacted in December 2019 that was attributable to 2019 has been added to the three and six months ended June 30, 2019. Delek US Holdings, Inc. Reconciliation of Amounts Reported Under U.S. GAAP $ in millions Three Months Ended June 30, 2020 Reconciliation of U.S. GAAP Segment Contribution Margin to Adjusted Segment Contribution Margin Refining Logistics Retail Corporate, Other and Eliminations Consolidated Reported segment contribution margin $ 59.7 $ 61.4 $ 24.3 $ (15.5) $ 129.9 Adjustments Net inventory valuation (benefit) loss (193.7) (2.9) (3.2) (3.3) (203.1) Unrealized hedging (gain) loss 9.9 2.3 - 11.2 23.4 Total adjustments $ (183.8) $ (0.6) $ (3.2) $ 7.9 $ (179.7) Adjusted segment contribution margin $ (124.1) $ 60.8 $ 21.1 $ (7.6) $ (49.8) Delek US Holdings, Inc. Reconciliation of Amounts Reported Under U.S. GAAP $ in millions Three Months Ended June 30, 2019 Reconciliation of U.S. GAAP Segment Contribution Margin to Adjusted Segment Contribution Margin Refining Logistics Retail Corporate, Other and Eliminations Consolidated Reported segment contribution margin $ 198.1 $ 44.2 $ 17.6 $ (9.6) $ 250.3 Adjustments Net inventory valuation (benefit) loss 0.6 - - - 0.6 Unrealized hedging (gain) loss 6.8 (0.2) - - - (3.0) 3.6 Retroactive biodiesel tax credit (1) 11.0 - - - 11.0 Total adjustments $ 18.4 $ (0.2) $ - $ (3.0) $ 15.2 Adjusted segment contribution margin $ 216.5 $ 44.0 $ 17.6 $ (12.6) $ 265.5 Delek US Holdings, Inc. Reconciliation of Amounts Reported Under U.S. GAAP $ in millions Six Months Ended June 30, 2020 Reconciliation of U.S. GAAP Segment Contribution Margin to Adjusted Segment Contribution Margin Refining Logistics Retail Corporate, Other and Eliminations Consolidated Reported segment contribution margin $ (230.7) $ 108.7 $ 36.6 $ (28.6) $ (114.0) Adjustments Net inventory valuation (benefit) loss 75.3 (0.1) - (0.1) 75.1 Unrealized hedging (gain) loss (38.7) - - 10.1 (28.6) Total adjustments $ 36.6 $ (0.1) $ - $ 10.0 $ 46.5 Adjusted segment contribution margin $ (194.1) $ 108.6 $ 36.6 $ (18.6) $ (67.5) Delek US Holdings, Inc. Reconciliation of Amounts Reported Under U.S. GAAP $ in millions Six Months Ended June 30, 2019 Reconciliation of U.S. GAAP Segment Contribution Margin to Adjusted Segment Contribution Margin Refining Logistics Retail Corporate, Other and Eliminations Consolidated Reported segment contribution margin $ 500.0 $ 84.3 $ 27.8 $ (28.0) $ 584.1 Adjustments Net inventory valuation (benefit) loss (51.4) (0.1) - - (51.5) Unrealized hedging (gain) loss 23.2 - - 7.5 30.7 Retroactive biodiesel tax credit (1) 20.7 - - - 20.7 Total adjustments $ (7.5) $ (0.1) $ - $ 7.5 $ (0.1) Adjusted segment contribution margin $ 492.5 $ 84.2 $ 27.8 $ (20.5) $ 584.0 (1) An adjustment for the portion of the retroactive biodiesel tax credit reenacted in December 2019 that was attributable to 2019 has been included in the three and six months ended June 30, 2019 for comparability. Three Months Ended June 30, Six Months Ended June 30, Reconciliation of Refining Segment Gross Margin to Refining Margin 2020 2019 2020 2019 (Unaudited) (Unaudited) Net revenues $ 1,077.0 $ 2,367.8 $ 2,804.9 $ 4,459.8 Cost of sales 1,062.1 2,202.9 3,117.6 4,024.1 Gross margin 14.9 164.9 (312.7) 435.7 Add back (items included in cost of sales): Operating expenses (excluding depreciation and amortization) 88.7 115.0 200.4 236.0 Depreciation and amortization 44.8 33.2 82.0 64.3 Refining margin $ 148.4 $ 313.1 $ (30.3) $ 736.0 Information about Delek US Holdings, Inc. can be found on its website (www.delekus.com), investor relations webpage (ir.delekus.com), news webpage (www.delekus.com/news) and its Twitter account (@DelekUSHoldings). View original content to download multimedia:http://www.prnewswire.com/news-releases/delek-us-holdings-reports-second-quarter-2020-results-301106108.html SOURCE Delek US Holdings, Inc.

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Delek Logistics Partners, LP Reports Second Quarter 2020 Results

Delek Logistics Partners, LP Reports Second Quarter 2020 Results- Reported second quarter net income attributable to all partners of $44.4 million; EBITDA increased 44.9% year-over-year- Limited Partners' interest in net income increased approximately 107% y/y- Second quarter distributable cash flow coverage ratio of 1.58x and total leverage ratio below 4.1x- Exceeded year-end distribution coverage target of 1.4 - 1.5x in the second quarter- Recent asset drop downs, business initiatives and asset optimization lead to improving outlook in 2H20- Jefferson agreement supports Paline Pipeline and creates flexibility for customers- Declared second quarter distribution of $0.90 per limited partner unit; reflects 5.9% percent increase year-over-year- Reiterating 5% distribution growth in 2020 versus year-ago levels BRENTWOOD, Tenn., Aug. 4, 2020 /PRNewswire/ -- Delek Logistics Partners, LP (NYSE: DKL) ("Delek Logistics") today announced its financial results for the second quarter 2020. For the three months ended June 30, 2020, Delek Logistics reported net income attributable to all partners of $44.4 million, or $1.18 per diluted common limited partner unit. This compares to net income attributable to all partners of $24.9 million, or $0.69 per diluted common limited partner unit, in the second quarter 2019. Net cash from operating activities was $37.5 million in the second quarter 2020 compared to $24.8 million in the second quarter 2019. Distributable cash flow was $57.0 million in the second quarter 2020, compared to $31.2 million in the second quarter 2019. Reconciliation of net cash from operating activities as reported under U.S. GAAP to distributable cash flow is included in the financial tables attached to this release. For the second quarter 2020, earnings before interest, taxes, depreciation and amortization ("EBITDA") was $64.8 million compared to $44.8 million in the second quarter 2019. Results improved on a year-over-year basis primarily due to the drop down of the Big Spring Gathering System and Trucking Assets, increased crude gathering, operating expense reductions and an increase in income from equity method investments. This was partially offset by a lower West Texas gross margin on a year-over-year basis. Reconciliation of net income attributable to all partners as reported under U.S. GAAP to EBITDA is included in the financial tables attached to this release. Uzi Yemin, Chairman, President and Chief Executive Officer of Delek Logistics' general partner, remarked: "Despite continued macro volatility stemming from COVID-19, Delek Logistics delivered stellar financial performance in the second quarter, with EBITDA and Limited Partners interest in net income increasing approximately 45% and 107%, respectively, versus last year. Second quarter distribution growth was 5.9% on a year-over-year basis. The combination of recent asset drop downs from our sponsor Delek US Holdings, Inc. (NYSE: DK) ("Delek US") along with internal business initiatives, asset optimization efforts and the Red River pipeline expansion, which is currently underway, should lead to improving performance in the second half of the year. I am pleased to announce an agreement with Jefferson Energy, that will provide Jefferson's Beaumont Terminal with direct connection to the Paline Pipeline. This agreement expands Paline's reach by giving shippers increased destination points for their crude leading to better flexibility for our customers." Mr. Yemin continued, "Our strong outlook gives us confidence in delivering 5% distribution growth on a year-over-year basis in 2020. We have already exceeded our distribution coverage target in the second quarter, well in advanced of our guidance to achieve this by year-end and we remain confident in reducing the leverage ratio below 4.0x before the end of the year." Distribution and Liquidity On July 24, 2020, Delek Logistics declared a quarterly cash distribution of $0.90 per common limited partner unit for the second quarter 2020, which equates to $3.60 per common limited partner unit on an annualized basis. This distribution will be paid on August 12, 2020 to unitholders of record on August 7, 2020. This represents a 1.1% increase from the first quarter 2020 distribution of $0.89 per common limited partner unit, or $3.56 per common limited partner unit on an annualized basis, and a 5.9% increase over Delek Logistics' second quarter 2019 distribution of $0.85 per common limited partner unit, or $3.40 per common limited partner unit annualized. For the second quarter 2020, the total cash distribution declared to all partners, including incentive distribution rights (IDRs), was approximately $36.0 million. Based on the distribution for the second quarter 2020, the distributable cash flow coverage ratio for the second quarter was 1.58x. As of June 30, 2020, Delek Logistics had total debt of approximately $995.2 million and cash of $16.2 million. Additional borrowing capacity, subject to certain covenants, under the $850.0 million credit facility was $100.0 million. The total leverage ratio, calculated in accordance with the credit facility, for the second quarter 2020 was below 4.1x, which is within the current requirements of the maximum allowable leverage ratio of 5.5x. Financial Results Revenue for the second quarter 2020 was $117.6 million compared to $155.3 million in the prior-year period. The decrease in revenue is primarily due to lower commodity prices and average throughput volumes. Total operating expenses were $12.4 million in the second quarter 2020, compared to $17.3 million in the second quarter 2019. The decrease was primarily due to cost control measures put in place at the end of the first quarter 2020. Total contribution margin was $61.3 million in the second quarter 2020 compared to $44.2 million in the second quarter 2019, mainly driven by the contribution from new assets and lower expenses. General and administrative expenses were $4.7 million for the second quarter 2020, compared to $5.3 million in the prior-year period. Pipelines and Transportation Segment Contribution margin in the second quarter 2020 was $42.5 million compared to $24.1 million in the second quarter 2019. The recent drop down of Big Spring Gathering System and the Trucking Assets were the primary drivers behind the year over year growth. Operating expenses were $9.7 million in the second quarter 2020 compared to $12.7 million in the prior-year period. Wholesale Marketing and Terminalling Segment During the second quarter 2020, contribution margin was $18.8 million, compared to $20.0 million in the second quarter 2019. This decrease was primarily due to lower terminalling throughput and gross margin in west Texas. Operating expenses of $2.7 million in the second quarter 2020 were lower than the $4.6 million in the prior-year period. Lower demand negatively impacted volumes and margins in the west Texas wholesale business. Average throughput in the second quarter 2020 was 9,143 barrels per day compared to 11,404 barrels per day in the second quarter 2019. The west Texas gross margin per barrel decreased year-over-year to $0.64 per barrel and included approximately $0.6 million, or $0.76 per barrel, from renewable identification numbers (RINs) generated in the quarter. During the second quarter 2019, the west Texas gross margin per barrel was $6.25 per barrel and included $0.3 million from RINs, or $0.25 per barrel. Average terminalling throughput volume of 138,593 barrels per day during the second quarter 2020 decreased on a year-over-year basis from 156,922 barrels per day in the second quarter 2019. During the second quarter 2020, average volume under the East Texas marketing agreement with Delek US was 65,028 barrels per day compared to 71,123 barrels per day during the second quarter 2019. Second Quarter 2020 Results | Conference Call Information Delek Logistics will hold a conference call to discuss its second quarter 2020 results on Wednesday, August 5, 2020 at 7:30 a.m. Central Time. Investors will have the opportunity to listen to the conference call live by going to www.DelekLogistics.com. Participants are encouraged to register at least 15 minutes early to download and install any necessary software. An archived version of the replay will also be available at www.DelekLogistics.com for 90 days. Investors may also wish to listen to Delek US' (NYSE: DK) second quarter 2020 earnings conference call on Wednesday, August 5, 2020 at 8:30 a.m. Central Time and review Delek US' earnings press release. Market trends and information disclosed by Delek US may be relevant to Delek Logistics, as it is a consolidated subsidiary of Delek US. Investors can find information related to Delek US and the timing of its earnings release online by going to www.DelekUS.com. About Delek Logistics Partners, LP Delek Logistics Partners, LP, headquartered in Brentwood, Tennessee, was formed by Delek US Holdings, Inc. (NYSE: DK) to own, operate, acquire and construct crude oil and refined products logistics and marketing assets. Safe Harbor Provisions Regarding Forward-Looking Statements This press release contains forward-looking statements that are based upon current expectations and involve a number of risks and uncertainties. Statements concerning current estimates, expectations and projections about future results, performance, prospects, opportunities, plans, actions and events and other statements, concerns, or matters that are not historical facts are "forward-looking statements," as that term is defined under the federal securities laws. These statements contain words such as "possible," "believe," "should," "could," "would," "predict," "plan," "estimate," "intend," "may," "anticipate," "will," "if," "expect" or similar expressions, as well as statements in the future tense, and can be impacted by numerous factors, including the fact that a substantial majority of Delek Logistics' contribution margin is derived from Delek US, thereby subjecting us to Delek US' business risks; risks relating to the securities markets generally; risks and costs relating to the age and operational hazards of our assets including, without limitation, costs, penalties, regulatory or legal actions and other effects related to releases, spills and other hazards inherent in transporting and storing crude oil and intermediate and finished petroleum products; the impact of adverse market conditions affecting the utilization of Delek Logistics' assets and business performance, including margins generated by its wholesale fuel business; the impact of the COVID-19 outbreak on the demand for crude oil, refined products and transportation and storage services; uncertainties regarding future decisions by OPEC regarding production and pricing disputes between OPEC members and Russia; an inability of Delek US to grow as expected as it relates to our potential future growth opportunities, including dropdowns, and other potential benefits; the results of our investments in joint ventures; the ability of the Red River joint venture to complete the expansion to increase the Red River pipeline capacity; adverse changes in laws including with respect to tax and regulatory matters; and other risks as disclosed in our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other reports and filings with the United States Securities and Exchange Commission. Forward looking statements include, but are not limited to, statements regarding future growth at Delek Logistics; distributions and the amounts and timing thereof; potential dropdown inventory and the evaluation of incentive distribution rights; expected earnings or returns from joint ventures or other acquisitions; expansion projects; ability to create long-term value for our unit holders; financial flexibility and borrowing capacity; and distribution growth of 5% or at all. Forward-looking statements should not be read as a guarantee of future performance or results and will not be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking information is based on information available at the time and/or management's good faith belief with respect to future events, and is subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the statements. Delek Logistics undertakes no obligation to update or revise any such forward-looking statements to reflect events or circumstances that occur, or which Delek Logistics becomes aware of, after the date hereof, except as required by applicable law or regulation Non-GAAP Disclosures: Our management uses certain "non-GAAP" operational measures to evaluate our operating segment performance and non-GAAP financial measures to evaluate past performance and prospects for the future to supplement our GAAP financial information presented in accordance with U.S. GAAP. These financial and operational non-GAAP measures are important factors in assessing our operating results and profitability and include: Earnings before interest, taxes, depreciation and amortization ("EBITDA") - calculated as net income before net interest expense, income tax expense, depreciation and amortization expense, including amortization of customer contract intangible assets, which is included as a component of net revenues in our accompanying condensed consolidated statements of income. Distributable cash flow - calculated as net cash flow from operating activities plus or minus changes in assets and liabilities, less maintenance capital expenditures net of reimbursements and other adjustments not expected to settle in cash. Delek Logistics believes this is an appropriate reflection of a liquidity measure by which users of its financial statements can assess its ability to generate cash.EBITDA and distributable cash flow are non-U.S. GAAP supplemental financial measures that management and external users of our condensed consolidated financial statements, such as industry analysts, investors, lenders and rating agencies, may use to assess: Delek Logistics' operating performance as compared to other publicly traded partnerships in the midstream energy industry, without regard to historical cost basis or, in the case of EBITDA, financing methods; the ability of our assets to generate sufficient cash flow to make distributions to our unitholders; Delek Logistics' ability to incur and service debt and fund capital expenditures; and the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities.Delek Logistics believes that the presentation of EBITDA, distributable cash flow and distributable cash flow coverage ratio provide useful information to investors in assessing its financial condition, its results of operations and the cash flow its business is generating. EBITDA, distributable cash flow and distributable cash flow coverage ratio should not be considered in isolation or as alternatives to net income, operating income, cash flow from operating activities or any other measure of financial performance or liquidity presented in accordance with U.S. GAAP. Non-GAAP measures have important limitations as analytical tools, because they exclude some, but not all, items that affect net income and net cash provided by operating activities. These measures should not be considered substitutes for their most directly comparable U.S. GAAP financial measures. Additionally, because EBITDA and distributable cash flow may be defined differently by other partnerships in its industry, Delek Logistics' definitions of EBITDA and distributable cash flow may not be comparable to similarly titled measures of other partnerships, thereby diminishing their utility. See the accompanying tables in this earnings release for a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures. Delek Logistics Partners, LP Condensed Consolidated Balance Sheets (Unaudited) (In thousands, except unit and per unit data) June 30, 2020 December 31, 2019 ASSETS Current assets: Cash and cash equivalents $ 16,196 $ 5,545 Accounts receivable 15,907 13,204 Inventory 2,140 12,617 Other current assets 499 2,204 Total current assets 43,497 33,570 Property, plant and equipment: Property, plant and equipment 680,969 461,325 Less: accumulated depreciation (207,225) (166,281) Property, plant and equipment, net 473,744 295,044 Equity method investments 255,323 246,984 Operating lease right-of-use assets 18,884 3,745 Goodwill 12,203 12,203 Marketing Contract Intangible, net 127,393 130,999 Rights-of-way 35,698 15,597 Other non-current assets 6,995 6,305 Total assets $ 973,737 $ 744,447 LIABILITIES AND DEFICIT Current liabilities: Accounts payable $ 1,795 $ 12,471 Accounts payable to related parties - 8,898 Interest payable 2,596 2,572 Excise and other taxes payable 4,330 3,941 Current portion of operating lease liabilities 5,793 1,435 Accrued expenses and other current liabilities 3,461 5,765 Total current liabilities 17,975 35,082 Non-current liabilities: Long-term debt 995,200 833,110 Asset retirement obligations 5,802 5,588 Deferred tax liabilities 1,158 215 Operating lease liabilities, net of current portion 13,091 2,310 Other non-current liabilities 18,826 19,261 Total non-current liabilities 1,034,077 860,484 Total liabilities 1,052,052 895,566 Equity (Deficit): Common unitholders - public; 8,687,371 units issued and outstanding at June 30, 2020 (9,131,579 at December 31, 2019) 160,870 164,436 Common unitholders - Delek Holdings; 20,745,868 units issued and outstanding at June 30, 2020 (15,294,046 at December 31, 2019) (235,961) (310,513) General partner - 600,678 units issued and outstanding at June 30, 2020 (498,482 at December 31, 2019) (3,224) (5,042) Total deficit (78,315) (151,119) Total liabilities and deficit $ 973,737 $ 744,447 Delek Logistics Partners, LP Condensed Consolidated Statements of Income (Unaudited) (In thousands, except unit and per unit data) Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Net revenues: Affiliate $ 87,629 $ 61,918 $ 194,328 $ 124,883 Third-party 30,008 93,424 86,710 182,942 Net revenues 117,637 155,342 281,038 307,825 Cost of sales: Cost of materials and other 43,892 93,854 145,185 190,119 Operating expenses (excluding depreciation and amortization presented below) 11,623 16,521 25,577 31,828 Depreciation and amortization 8,223 6,188 14,026 12,312 Total cost of sales 63,738 116,563 184,788 234,259 Operating expenses related to wholesale business (excluding depreciation and amortization presented below) 826 806 1,616 1,557 General and administrative expenses 4,721 5,293 10,851 9,766 Depreciation and amortization 471 451 967 901 Other operating income, net - (27) (107) (25) Total operating costs and expenses 69,756 123,086 198,115 246,458 Operating income 47,881 32,256 82,923 61,367 Interest expense, net 10,670 11,354 22,494 22,655 Income from equity method investments (6,462) (4,515) (12,015) (6,466) Total non-operating expenses, net 4,206 7,300 10,477 16,650 Income before income tax expense 43,675 24,956 72,446 44,717 Income tax (benefit) expense (740) 71 235 136 Net income attributable to partners $ 44,415 $ 24,885 $ 72,211 $ 44,581 Comprehensive income attributable to partners $ 44,415 $ 24,885 $ 72,211 $ 44,581 Less: General partner's interest in net income, including incentive distribution rights 9,647 8,079 18,724 15,348 Limited partners' interest in net income $ 34,768 $ 16,806 $ 53,487 $ 29,233 Net income per limited partner unit: Common units - basic $ 1.18 $ 0.69 $ 1.98 $ 1.20 Common units - diluted $ 1.18 $ 0.69 $ 1.98 $ 1.20 Weighted average limited partner units outstanding: Common units - basic 29,427,298 24,409,359 26,953,934 24,408,270 Common units - diluted 29,430,555 24,414,343 26,956,523 24,414,077 Cash distribution per limited partner unit $ 0.900 $ 0.850 $ 1.790 $ 1.670 Delek Logistics Partners, LP Condensed Consolidated Statements of Cash Flows (Unaudited) (In thousands) Six Months Ended June 30, 2020 2019 Cash flows from operating activities Net cash provided by operating activities $ 72,381 $ 51,823 Cash flows from investing activities Net cash used in investing activities (114,242) (136,556) Cash flows from financing activities Net cash provided by financing activities 52,512 85,651 Net increase in cash and cash equivalents 10,651 918 Cash and cash equivalents at the beginning of the period 5,545 4,522 Cash and cash equivalents at the end of the period $ 16,196 $ 5,440 Delek Logistics Partners, LP Reconciliation of Amounts Reported Under U.S. GAAP (In thousands) Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Reconciliation of Net Income to EBITDA: Net income $ 44,415 $ 24,885 $ 72,211 $ 44,581 Add: Income tax (benefit) expense (740) 71 235 136 Depreciation and amortization 8,694 6,639 14,993 13,213 Amortization of customer contract intangible assets 1,803 1,802 3,605 3,605 Interest expense, net 10,670 11,354 22,494 22,655 EBITDA $ 64,842 $ 44,751 $ 113,538 $ 84,190 Reconciliation of net cash from operating activities to distributable cash flow: Net cash provided by operating activities $ 37,545 $ 24,806 $ 72,381 $ 51,823 Changes in assets and liabilities 19,345 7,133 20,999 9,489 Non-cash lease expense (366) (393) (640) (1,409) Distributions from equity method investments in investing activities 1,580 - 1,690 804 Maintenance and regulatory capital expenditures (98) (963) (726) (1,781) Reimbursement from Delek Holdings for capital expenditures 16 670 55 1,384 Accretion of asset retirement obligations (107) (99) (214) (198) Deferred income taxes (943) 3 (943) 3 Other operating income, net - 27 107 25 Distributable Cash Flow $ 56,972 $ 31,184 $ 92,709 $ 60,140 Delek Logistics Partners, LP Distributable Coverage Ratio Calculation (In thousands) Three Months Ended June 30, Six Months Ended June 30, Distributions to partners of Delek Logistics, LP 2020 2019 2020 2019 Limited partners' distribution on common units $ 26,490 $ 20,755 $ 48,229 $ 40,769 General partner's distributions 542 423 986 831 General partner's incentive distribution rights 8,937 7,736 17,632 14,752 Total distributions to be paid (2) $ 35,969 $ 28,914 $ 66,847 $ 56,352 Distributable cash flow $ 56,972 $ 31,184 $ 92,709 $ 60,140 Distributable cash flow coverage ratio (1) 1.58x 1.08x 1.39x 1.07x (1) Distributable cash flow coverage ratio is calculated by dividing distributable cash flow by distributions to be paid in each respective period. (2) The distributions for the six months ended June 30, 2020 reflect the impact of the distribution waiver that waived all of the distributions for the first quarter of 2020 on the 5.0 million Additional Units, related to the Big Spring Gathering Assets transaction, with respect to base distributions and the IDRs. In addition, the distributions for the three and six months ended June 30, 2020 reflect the waiver of distributions in respect of the IDRs associated with the Additional Units for at least two years. Delek Logistics Partners, LP Segment Data (unaudited) (In thousands) Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Pipelines and Transportation Net revenues: Affiliate $ 61,394 $ 36,731 $ 99,897 $ 73,390 Third party 2,032 7,477 11,496 11,451 Total pipelines and transportation 63,426 44,208 111,393 84,841 Cost of sales: Cost of materials and other 11,182 7,357 17,280 12,924 Operating expenses (excluding depreciation and amortization) 9,731 12,728 21,187 23,562 Segment contribution margin $ 42,513 $ 24,123 $ 72,926 $ 48,355 Total Assets $ 836,510 $ 525,070 Wholesale Marketing and Terminalling Net revenues: Affiliates (1) $ 26,235 $ 25,187 $ 94,431 $ 51,493 Third party 27,976 85,947 75,214 171,491 Total wholesale marketing and terminalling 54,211 111,134 169,645 222,984 Cost of sales: Cost of materials and other 32,710 86,497 127,905 177,195 Operating expenses (excluding depreciation and amortization) 2,718 4,599 6,006 9,823 Segment contribution margin $ 18,783 $ 20,038 $ 35,734 $ 35,966 Total Assets $ 137,227 244,240 Consolidated Net revenues: Affiliates $ 87,629 $ 61,918 $ 194,328 $ 124,883 Third party 30,008 93,424 86,710 182,942 Total consolidated 117,637 155,342 281,038 307,825 Cost of sales: Cost of materials and other 43,892 93,854 145,185 190,119 Operating expenses (excluding depreciation and amortization presented below) 12,449 17,327 27,193 33,385 Contribution margin 61,296 44,161 108,660 84,321 General and administrative expenses 4,721 5,293 10,851 9,766 Depreciation and amortization 8,694 6,639 14,993 13,213 Other operating income, net - (27) (107) (25) Operating income $ 47,881 $ 32,256 $ 82,923 $ 61,367 Total Assets $ 973,737 $ 769,310 (1) Affiliate revenue for the wholesale marketing and terminalling segment is presented net of amortization expense pertaining to the marketing contract intangible we acquired in connection with the Big Spring acquisition. Delek Logistics Partners, LP Segment Capital Spending (In thousands) Three Months Ended June 30, Six Months Ended June 30, Pipelines and Transportation 2020 2019 2020 2019 Maintenance capital spending $ 119 $ 818 $ 430 $ 1,228 Discretionary capital spending 298 - 433 14 Segment capital spending $ 417 $ 818 863 1,242 Wholesale Marketing and Terminalling Maintenance capital spending $ 232 $ 302 1,362 409 Discretionary capital spending 3 222 1,456 595 Segment capital spending $ 235 $ 524 2,818 1,004 Consolidated Maintenance capital spending $ 351 $ 1,120 1,792 1,637 Discretionary capital spending 301 222 1,889 609 Total capital spending $ 652 $ 1,342 $ 3,681 $ 2,246 Delek Logistics Partners, LP Segment Data (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Pipelines and Transportation Segment: Throughputs (average bpd) El Dorado Assets: Crude pipelines (non-gathered) 79,066 37,625 75,995 33,179 Refined products pipelines to Enterprise Systems 56,093 29,893 55,110 26,511 El Dorado Gathering System 9,447 14,315 13,449 14,798 East Texas Crude Logistics System 10,275 19,550 12,224 18,835 Big Spring Gathering Assets 105,162 - 105,162 - Wholesale Marketing and Terminalling Segment: East Texas - Tyler Refinery sales volumes (average bpd) (1) 65,028 71,123 68,839 69,857 Big Spring marketing throughputs (average bpd) 76,004 82,964 71,195 85,339 West Texas marketing throughputs (average bpd) 9,143 11,404 12,612 12,418 West Texas gross margin per barrel $ 0.64 $ 6.25 $ 1.96 $ 4.84 Terminalling throughputs (average bpd) 138,593 156,922 136,961 154,643 (1) Excludes jet fuel and petroleum coke. Information about Delek Logistics Partners, LP can be found on its website (www.deleklogistics.com), investor relations webpage (ir.deleklogistics.com), news webpage (www.deleklogistics.com/news) and its Twitter account (@DelekLogistics). View original content to download multimedia:http://www.prnewswire.com/news-releases/delek-logistics-partners-lp-reports-second-quarter-2020-results-301106080.html SOURCE Delek Logistics Partners, LP

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Trecora Resources Reports Second Quarter and First Half 2020 Results

Trecora Resources Reports Second Quarter and First Half 2020 Results- Total outstanding debt reduced to $78.2 million, excluding Paycheck Protection Program loans; the lowest level since third quarter 2016- Cash balance remains strong at $29.9 million at the end of June- Second quarter net loss from continuing operations of $1.9 million- Second quarter Adjusted EBITDA from continuing operations of $4.2 million- Operating cash flow from continuing operations of $16.5 million, a $12.1 million improvement from first quarter of this year- Company's current growth initiatives in 2020 on track to yield approximately $4 million in incremental value creation- Conference call at 10:00 am ET tomorrow, August 5, 2020 SUGAR LAND, Texas, Aug. 4, 2020 /PRNewswire/ -- Trecora Resources ("Trecora" or the "Company") (NYSE: TREC), a leading provider of specialty hydrocarbons and specialty waxes, today announced financial results for the second quarter ended June 30, 2020. "Trecora's second quarter results demonstrate the resiliency of our business and our executional focus, despite the market impacts from COVID-19. Our cash flow from continuing operations of $16.5 million was a $12.1 million improvement from first quarter this year. We ended the second quarter with $78.2 million of debt excluding Paycheck Protection Program loans, $29.9 million of cash and no borrowings on our revolver. Our Company's debt is at its lowest since the third quarter of 2016," said Pat Quarles, Trecora's President and Chief Executive Officer. "Net loss from continuing operations in the second quarter was $1.9 million while Adjusted EBITDA from continuing operations was $4.2 million. Demand for our Specialty Petrochemicals declined in April and May but rebounded in June while margins for these products expanded significantly as our feedstock costs declined throughout the quarter. Our Specialty Waxes business results were weaker than expected due to both exposure to certain durable good end-uses and the impact from falling custom processing revenues in this segment. While our visibility looking forward remains poor, we see demand in Specialty Petrochemicals continuing to improve into the third quarter, while still below pre-pandemic levels. "Our growth initiative launched in 2020 remains on track to achieve approximately $4 million of annualized incremental EBITDA value creation. With additional inbound projects continuing to develop, we believe the expanding pipeline of projects offer further opportunities for profit improvements ahead. "Finally, we recently completed the sale of a 975,000 share portion of Trecora's overall ownership in AMAK. We believe we will complete the sale of our remaining AMAK shares by the end of the third quarter. Coupled with the anticipated receipt of Federal income tax refunds allowed under the CARES Act, we expect our bank debt, net of cash, to be negative. With our strong balance sheet we can better navigate the current market environment as well as prudently consider growth opportunities and drive shareholder value," concluded Mr. Quarles. Sami Ahmad, Trecora's Chief Financial Officer stated, "We have taken a number of measures in the first half of 2020 to strengthen our balance sheet and provide for sufficient liquidity as we progress through this downturn. We fully repaid our revolver balance of $23 million and paid down another $1 million on our Term Loan during the second quarter of 2020. As a result, our bank debt balance as of June 30 was $78.2 million compared to $102.3 million at March 31. We maintained keen attention to costs with a focus on safe and reliable operation of our plants as well as preserving the continuity of our workforce. Cash on the balance sheet stood at approximately $29.9 million at the end of second quarter. Finally, in addition to proceeds from the AMAK share sale we expect to receive approximately $16.5 million in tax refunds in the second half of the year." Second Quarter 2020 Financial Results Net loss from continuing operations in the second quarter of 2020 was $1.9 million, or $0.07 per diluted share[1], compared to a net income from continuing operations of $2.4 million, or $0.10 per diluted share[2], in the second quarter of 2019. Adjusted EBITDA from continuing operations was $4.2 million for the second quarter of 2020, compared with Adjusted EBITDA from continuing operations of $9.3 million in the second quarter of 2019. Adjusted EBITDA from continuing operations declined due to lower sales volumes for prime products and by-products in our Specialty Petrochemicals segment, as well as lower Specialty Waxes sales revenue, both of which were impacted by COVID-19. Total revenue in the second quarter of 2020 was $40.7 million compared to $69.4 million in the second quarter of 2019. This 41.4% year-over-year decrease was primarily due to lower sales volumes for prime products and by-products which was impacted by COVID-19. Also, gross revenue was reduced by lower selling prices resulting from the sharp decline in feedstock costs relative to the same period a year ago. Gross profit in the second quarter of 2020 was $6.2 million, or 15.2% of total revenues, compared to $10.6 million, or 15.2% of total revenues, in the second quarter of 2019. Operating loss in the second quarter of 2020 was $0.3 million compared to operating income of $4.3 million for the second quarter of 2019. Specialty Petrochemicals Specialty Petrochemicals net income from continuing operations was $1.4 million in the second quarter of 2020, compared to net income of $4.7 million in the second quarter of 2019. Specialty Petrochemicals volume in the second quarter of 2020 was 15.3 million gallons, compared to 19.7 million gallons in the first quarter of 2020 and 21.4 million gallons in the second quarter of 2019. Sales volume of our Specialty Petrochemicals products decreased 28.5% year-over-year, due to lower demand from polyethylene end-use markets as well as lower sales to Canadian oil sands customers. Prime product volume in the second quarter of 2020 was 13.1 million gallons, compared to 16.2 million gallons in the first quarter of 2020 and 17.7 million gallons in the second quarter of 2019. By-product sales volume was 2.3 million gallons in the second quarter of 2020. Adjusted EBITDA from continuing operations for Specialty Petrochemicals in the second quarter of 2020 was $5.0 million compared to $10.4 million in the second quarter of 2019. Dollar amounts in thousands/rounding may apply THREE MONTHS ENDED JUNE 30, 2020 2019 % Change Product sales $31,236 $58,584 (47%) Processing fees 1,159 1,527 (24%) Gross revenues $32,395 $60,111 (46%) Operating profit before depreciation and amortization 4,974 10,028 (50%) Operating profit 2,354 7,104 (67%) Net profit before taxes 1,648 6,375 (74%) Depreciation and amortization 2,621 2,925 (10%) Adjusted EBITDA from continuing operations 4,998 10,353 (52%) Capital expenditures 5,382 1,461 268% Specialty Waxes Specialty Waxes net loss from continuing operations was $0.3 million in the second quarter of 2020, compared to a net loss from continuing operations of $1.0 million in the second quarter of 2019. Specialty Waxes generated revenues of approximately $8.3 million in the second quarter of 2020, a $2.1 million decrease from $10.4 million in the first quarter of 2020, and a $1.0 million decrease from the second quarter of 2019. Revenue included $5.5 million of wax product sales in the second quarter of 2020. Wax sales volumes decreased approximately 16.0% or nearly 1.6 million pounds from the second quarter of 2019. Lower sales volumes, in the second quarter of 2020, reflect the impact on our customers from COVID-19. Many of our customers, especially in the automotive, furniture and construction end-markets, had significant decline in sales demand due to the pandemic. There were no material disruptions to feed supply during the second quarter of 2020. Processing revenues, which were $2.8 million in the second quarter of 2020, increased 11.7%, or approximately $0.3 million, from the second quarter of 2019. Adjusted EBITDA from continuing operations for Specialty Waxes in the second quarter of 2020 was $0.9 million compared to $0.7 million in the second quarter of 2019. Dollar amounts in thousands/rounding may apply THREE MONTHS ENDED JUNE 30, 2020 2019 % Change Product sales $5,471 $6,745 (19%) Processing fees 2,808 2,516 12% Gross revenues $8,279 $9,261 (11%) Operating profit before depreciation and amortization 854 766 11% Operating loss (485) (633) 23% Net loss before taxes (445) (1,013) 56% Depreciation and amortization 1,338 1,399 (4%) Adjusted EBITDA from continuing operations 892 734 22% Capital expenditures 285 426 (33%) First Half 2020 Financial Results Net income from continuing operations in the first half of 2020 was $4.0 million, or $0.16 per diluted share[3], compared to net income of $4.3 million, or $0.17 per diluted share[4], for the same period in 2019. Adjusted EBITDA from continuing operations in the first half of 2020 was $9.7 million, compared to Adjusted EBITDA from continuing operations of $17.7 million for the same period in 2019. Total revenue in the first half of 2020 was $102.7 million, compared to $134.5 million for the same period in 2019, a decrease of 23.6%. This decrease was primarily due to lower sales volumes for prime products and byproducts as a result of COVID-19 and its general impact on the economy. A decrease in average selling prices resulting from a sharp decrease in feedstock costs also contributed to the revenue decline. Gross profit in the first half of 2020 was $14.2 million, or 13.9% of total revenues, compared to $20.6 million, or 15.3% of total revenues, for the same period in 2019. Operating income in the first half of 2020 was $0.9 million, compared to operating income of $8.1 million for the same period in 2019. Specialty Petrochemicals Specialty Petrochemicals net income was $6.0 million in the first half of 2020, compared to net income of $10.8 million for the same period in 2019. Specialty Petrochemicals volume in the first half of 2020 was 35.1 million gallons, compared to 43.9 million gallons for the same period in 2019. Prime product volume in the first half of 2020 was 29.3 million gallons, compared to 35.4 million gallons in the same period 2019. Adjusted EBITDA from continuing operations for Specialty Petrochemicals in the first half of 2020 decreased 47% to $11.5 million, compared to $21.8 million for the same period in 2019. Dollar amounts in thousands/rounding may apply SIX MONTHS ENDED JUNE 30, 2020 2019 % Change Product sales $81,622 $114,074 (28%) Processing fees 2,403 2,910 (17%) Gross revenues $84,025 $116,984 (28%) Operating profit before depreciation and amortization 11,464 21,435 (47%) Operating profit 6,226 15,437 (60%) Net profit before taxes 4,590 13,510 (66%) Depreciation and amortization 5,238 5,999 (13%) Adjusted EBITDA from continuing operations 11,471 21,758 (47%) Capital expenditures 6,983 2,839 146% Specialty Waxes Specialty Waxes net income of $0.9 million in the first half of 2020 compared to a net loss of $3.6 million for the same period in 2019. Specialty Waxes had revenues of $18.7 million in the first half of 2020, a 6.7% increase from the same period of 2019. Revenues included $12.3 million of wax product sales and $6.4 million of processing revenues. Wax sales volumes in the first half of 2020 increased approximately 3.9% from the same period 2019. In the first half of 2019 planned maintenance turnaround at our Pasadena facility, along with outages at multiple wax feed suppliers, constrained specialty wax production and thereby sales volumes. There were no material disruptions to feed supply during the first half of 2020. Adjusted EBITDA from continuing operations for Specialty Waxes in the first half of 2020 was $2.0 million, compared to $(0.2) million for the same period in 2019. Dollar amounts in thousands/rounding may apply SIX MONTHS ENDED JUNE 30, 2020 2019 % Change Product sales $12,268 $12,748 (4)% Processing fees 6,448 4,794 34% Gross revenues $18,716 $17,542 7% Operating profit (loss) before depreciation and amortization 1,920 (83) 2,413% Operating loss (747) (2,830) 74% Net loss before taxes (687) (3,552) 81% Depreciation and amortization 2,666 2,747 (3%) Adjusted EBITDA from continuing operations 1,996 (154) 1,396% Capital expenditures 601 935 (36%) Earnings Call Tomorrow's conference call and presentation slides will be simulcast live on the Internet, and can be accessed on the investor relations section of the Company's website at http://www.trecora.com or at https://edge.media-server.com/mmc/p/zucq82i6. A replay of the call will also be available through the same link. To participate via telephone, callers should dial in at least ten to fifteen minutes prior to the 10:00 am Eastern start time; domestic callers (U.S. and Canada) should call +1-866-417-5724 or +1-409-217-8234 if calling internationally, using the conference ID 6689633. To listen to the playback, please call 1-855-859-2056 if calling within the United States or 1-404-537-3406 if calling internationally. Use pin number 6689633 for the replay. Use of Non-GAAP Measures This press release includes the use of both U.S. generally accepted accounting principles ("GAAP") and non-GAAP financial measures. The Company believes certain financial measures, such as EBITDA from continuing operations and Adjusted EBITDA from continuing operations, which are non-GAAP measures, provide users of our financial statements with supplemental information that may be useful in evaluating our operating performance. The Company believes that such non-GAAP measures, when read in conjunction with our operating results presented under GAAP, can be used to better assess our performance from period to period and relative to performance of other companies in our industry, without regard to financing methods, historical cost basis or capital structure. These measures are not measures of financial performance or liquidity under GAAP and should be considered in addition to, and not as a substitute for, analysis of our results under GAAP. We define EBITDA from continuing operations as net income (loss) from continuing operations plus interest expense (benefit), income taxes, depreciation and amortization. We define Adjusted EBITDA from continuing operations as EBITDA from continuing operations plus share-based compensation, plus restructuring and severance expenses, plus or minus equity in AMAK's earnings and losses, plus impairment losses and plus or minus gains or losses on disposal of assets. These non-GAAP measures have been reconciled to the nearest GAAP measure in the tables below entitled Reconciliation of Selected GAAP Measures to Non-GAAP Measures. Forward-Looking Statements Some of the statements and information contained in this earnings press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements regarding the Company's financial position, business strategy and plans and objectives of the Company's management for future operations and other statements that are not historical facts, are forward-looking statements. Forward-looking statements are often characterized by the use of words such as "outlook," "may," "will," "should," "could," "expects," "plans," "anticipates, "contemplates," "proposes," "believes," "estimates," "predicts," "projects," "potential," "continue," "intend," or the negative of such terms and other comparable terminology, or by discussions of strategy, plans or intentions. Forward-looking statements involve known and unknown risks, uncertainties, assumptions, and other important factors that could cause the actual results, performance or our achievements, or industry results, to differ materially from historical results, any future results, or performance or achievements expressed or implied by such forward-looking statements. Such risks, uncertainties and factors include, but are not limited to: not completing, or not completely realizing the anticipated benefits from, the sale of our stake in AMAK; general economic and financial conditions domestically and internationally; insufficient cash flows from operating activities; our ability to attract and retain key employees; feedstock, product and mineral prices; feedstock availability and our ability to access third party transportation; competition; industry cycles; natural disasters or other severe weather events, health epidemics and pandemics (including COVID-19) and terrorist attacks; our ability to consummate extraordinary transactions, including acquisitions and dispositions, and realize the financial and strategic goals of such transactions; technological developments and our ability to maintain, expand and upgrade our facilities; regulatory changes; environmental matters; lawsuits; outstanding debt and other financial and legal obligations (including having to return the amounts borrowed under the Paycheck Protection Program or failing to qualify for forgiveness of such loans, in whole or in part); difficulties in obtaining additional financing on favorable conditions, or at all; local business risks in foreign countries, including civil unrest and military or political conflict, local regulatory and legal environments and foreign currency fluctuations; and other risks detailed in our latest Annual Report on Form 10-K, including but not limited to: "Part I, Item 1A. Risk Factors" and "Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" therein, and in our other filings with the Securities and Exchange Commission (the "SEC"). Many of these risks and uncertainties are currently amplified by and will continue to be amplified by, or in the future may be amplified by, the COVID-19 pandemic. There may be other factors of which we are currently unaware or deem immaterial that may cause our actual results to differ materially from the forward-looking statements. In addition, to the extent any inconsistency or conflict exists between the information included in this report and the information included in our prior releases, reports and other filings with the SEC, the information contained in this report updates and supersedes such information. Forward-looking statements are based on current plans, estimates, assumptions and projections, and, therefore, you should not place undue reliance on them. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update them in light of new information or future events. About Trecora Resources (TREC)TREC owns and operates a specialty petrochemicals facility specializing in high purity hydrocarbons and other petrochemical manufacturing and a specialty wax facility, both located in Texas, and provides custom processing services at both facilities. In addition, the Company is the original developer and a 27.0% owner of Al Masane Al Kobra Mining Co., a Saudi Arabian joint stock company. Investor Relations Contact:Jason FinkelsteinThe Piacente Group, [email protected] 1 Based on 24.8 million shares outstanding. 2 Based on 25.1 million shares outstanding. 3 Based on 25.4 million shares outstanding. 4 Based on 25.1 million shares outstanding. TRECORA RESOURCES AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS June 30, 2020 (Unaudited) December 31, 2019 ASSETS (thousands of dollars, except par value) Current Assets Cash $ 29,877 $ 6,145 Trade receivables, net 20,240 26,320 Inventories 7,595 13,624 Investment in AMAK (held-for-sale) 29,175 32,872 Prepaid expenses and other assets 3,233 4,947 Taxes receivable 16,229 182 Total current assets 106,349 84,090 Plant, pipeline and equipment, net 189,237 188,919 Intangible assets, net 13,814 14,736 Operating lease assets, net 11,915 13,512 Mineral properties in the United States 562 562 TOTAL ASSETS 321,877 301,819 LIABILITIES Current Liabilities Accounts payable 11,027 14,603 Accrued liabilities 7,801 5,740 Current portion of long-term debt 4,194 4,194 Current portion of lease liabilities 3,142 3,174 Current portion of other liabilities 955 924 Total current liabilities 27,119 28,635 CARES Act, PPP Loans 6,123 - Long-term debt, net of current portion 73,998 79,095 Post-retirement benefit, net of current portion 327 338 Lease liabilities, net of current portion 8,773 10,338 Other liabilities, net of current portion 512 595 Deferred income taxes 23,860 11,375 Total liabilities 140,712 130,376 EQUITY Common stock-authorized 40 million shares of $0.10 par value; issued and outstanding 24.8 million and 24.8 million in 2020 and 2019, respectively 2,482 2,475 Additional paid-in capital 60,386 59,530 Retained earnings 118,008 109,149 Total Trecora Resources Stockholders' Equity 180,876 171,154 Noncontrolling Interest 289 289 Total equity 181,165 171,443 TOTAL LIABILITIES AND EQUITY 321,877 301,819 TRECORA RESOURCES AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME THREE MONTHS ENDEDJUNE 30, SIX MONTHS ENDEDJUNE 30, (unaudited) (unaudited) 2020 2019 2020 2019 (thousands of dollars, except per share amounts) Revenues Product sales $ 36,707 $ 65,329 $ 93,890 $ 126,822 Processing fees 3,967 4,042 8,851 7,704 40,674 69,371 102,741 134,526 Operating costs and expenses Cost of sales and processing (including depreciation and amortization of $3,750, $4,128, $7,486 and $8,357, respectively) 34,507 58,806 88,496 113,888 Gross Profit 6,167 10,565 14,245 20,638 General and Administrative Expenses General and administrative 6,289 6,042 12,963 12,076 Depreciation 212 208 428 421 6,501 6,250 13,391 12,497 Operating income (loss) (334) 4,315 854 8,141 Other income (expense) Interest income - - - 5 Interest expense (735) (1,401) (1,651) (2,900) Miscellaneous income (expense), net 68 284 6 256 (667) (1,117) (1,645) (2,639) Income (loss) from continuing operations before income taxes (1,001) 3,198 (791) 5,502 Income tax expense (benefit) 858 691 (4,795) 1,185 Income (loss) from continuing operations (1,859) 2,507 4,004 4,317 Income (loss) from discontinued operations, net of tax (2) (103) 4,855 (162) Net income (loss) (1,861) 2,404 8,859 4,155 Basic earnings (losses) per common share Net income (loss) from continuing operations (dollars) $ (0.07) $ 0.10 $ 0.16 $ 0.17 Net income from discontinued operations, net of tax (dollars) $ - $ - $ 0.20 $ (0.01) Net income (loss) (dollars) $ (0.07) $ 0.10 $ 0.36 $ 0.16 Basic weighted average number of common shares outstanding 24,802 24,696 24,784 24,675 Diluted earnings (losses) per common share Net income (loss) from continuing operations (dollars) $ (0.07) $ 0.10 $ 0.16 $ 0.17 Net income from discontinued operations, net of tax (dollars) $ - $ - $ 0.19 $ (0.01) Net income (loss) (dollars) $ (0.07) $ 0.10 $ 0.35 $ 0.16 Diluted weighted average number of common shares outstanding 24,802 25,091 25,360 25,089 TRECORA RESOURCES AND SUBSIDIARIES RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES EBITDA from continuing operations and Adjusted EBITDA from continuing operations (thousands of dollars; rounding may apply) THREE MONTHS ENDED THREE MONTHS ENDED 6/30/2020 6/30/2019 SPEC. PETRO SPEC. WAX CORP TREC SPEC. PETRO SPEC. WAX CORP TREC NET INCOME (LOSS) $ 1,393 $ (332) $ (2,922) $ (1,861) $ 4,666 $ (1,013) $ (1,249) $ 2,404 Loss from discontinued operations, net of tax - - (2) (2) - - (103) (103) Income (Loss) from continuing operations $ 1,393 $ (332) $ (2,920) $ (1,859) $ 4,666 $ (1,013) $ (1,146) $ 2,507 Interest 736 - (1) 735 1,053 347 1 1,401 Tax expense (benefit) 255 (113) 716 858 1,709 - (1,018) 691 Depreciation and amortization 185 23 4 212 172 24 12 208 Depreciation and amortization in cost of sales 2,436 1,314 - 3,750 2,753 1,375 - 4,128 EBITDA from continuing operations 5,005 892 (2,201) 3,696 10,353 733 (2,151) 8,935 Share based compensation - - 543 543 - - 345 345 Loss on disposal of assets (7) - - (7) - - - - Adjusted EBITDA from continuing operations $ 4,998 $ 892 $ (1,658) $ 4,232 $ 10,353 $ 733 $ (1,806) $ 9,280 Revenue 32,395 8,279 - 40,674 60,110 9,260 - 69,371 SIX MONTHS ENDED SIX MONTHS ENDED 6/30/2020 6/30/2019 SPEC. PETRO SPEC. WAX CORP TREC SPEC. PETRO SPEC. WAX CORP TREC NET INCOME (LOSS) $ 5,989 $ 882 $ 1,988 $ 8,859 $ 10,808 $ (3,552) $ (3,101) $ 4,155 Loss from discontinued operations, net of tax - - 4,855 4,855 - - (162) (162) Income (Loss) from continuing operations $ 5,989 $ 882 $ (2,867) $ 4,004 $ 10,808 $ (3,552) $ (2,939) $ 4,317 Interest 1,651 - - 1,651 2,248 651 1 2,900 Tax expense (benefit) (1,399) (1,569) (1,827) (4,795) 2,703 - (1,518) 1,185 Depreciation and amortization 371 47 10 428 341 48 32 421 Depreciation and amortization in cost of sales 4,867 2,619 - 7,486 5,658 2,699 - 8,357 EBITDA from continuing operations 11,479 1,979 (4,684) 8,774 21,758 (154) (4,424) 17,180 Share based compensation - - 933 933 - - 558 558 (Gain) Loss on disposal of assets (8) 17 - 9 - - - - Adjusted EBITDA from continuing operations $ 11,471 $ 1,996 $ (3,751) $ 9,716 $ 21,758 $ (154) $ (3,866) $ 17,738 Revenue 84,025 18,716 - 102,741 116,984 17,542 - 134,526 View original content to download multimedia:http://www.prnewswire.com/news-releases/trecora-resources-reports-second-quarter-and-first-half-2020-results-301106076.html SOURCE Trecora Resources

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Profire Energy Announces Changes to its Board of Directors

Profire Energy Announces Changes to its Board of Directors LINDON, Utah, Aug. 04, 2020 (GLOBE NEWSWIRE) -- Profire Energy, Inc. (Nasdaq: PFIE), a technology company which creates, installs and services burner management solutions in the oil and gas industry, today announced the resignation of Mr. Arlen B. Crouch from the Company's Board of Directors. Mr. Crouch has served on the Company's Board since 2013. Contemporaneously with Mr. Crouch's resignation, the Board of Directors appointed Colleen Larkin Bell as the newest member of the Company's Board. Both of these changes were effective August 3, 2020. "On behalf of our board of directors, I want to thank Arlen for his service to Profire," stated Brenton Hatch, Profire's Executive Chairman. "His advice and expert guidance have been crucial to Profire for many years. We wish him the best in his retirement and any future endeavors." Ms. Bell joins the Board with 30 years of experience in the natural gas and energy industry as a legal professional, in which she has held various executive roles. Ms. Bell served as Vice President and General Manager of Dominion Energy Western Distribution, Gas Infrastructure Group from 2016 to 2019. Prior to her time at Dominion Energy, Ms. Bell served as the Vice President and General Counsel for Questar Corporation. "Colleen will be a great addition to the team and offers a deep understanding of industry practices," said Ryan Oviatt, the Company's Co-CEO and President. "Her expertise coupled with industry knowledge will be valuable to us as Profire continues to navigate through current market conditions and as we continue to position ourselves for future growth as the industry recovers. We are pleased to have her join the Board and we look forward to working with her over the coming years." "Colleen's appointment will bring critical experience and a connection to the downstream utility distribution sector," said Cameron Tidball, the Company's Co-CEO and President. "Colleen's experience in support of regulatory compliance issues in the natural gas utility sector will help support further expansion of our customer and product development opportunities. We welcome her to the Profire team and look forward to her presence and involvement with the Board." "Joining Profire at this time presents a unique opportunity," said Ms. Bell. "Profire is a well-managed company that is looking to build and expand its industry-leading technology to help users minimize waste and costs as the sector currently faces multiple headwinds. I look forward to working with the management team and the Board to provide shareholder value while delivering valuable products and expertise within the oil and gas industry." About Profire Energy, Inc.Profire Energy assists energy production companies in the safe and efficient production and transportation of oil and natural gas. As energy companies seek greater safety for their employees, compliance with more stringent regulatory standards, and enhanced margins with their energy production processes, Profire Energy's burner management products are continuing to be a key part of their solutions. Profire Energy has offices in Lindon, Utah; Victoria, Texas; Homer, Pennsylvania; Greeley, Colorado; Millersburg, Ohio; and Acheson, Alberta, Canada. For additional information, visit www.profireenergy.com. Cautionary Note Regarding Forward-Looking Statements. Statements made in this release that are not historical are forward-looking statements. This release contains forward-looking statements. All such forward-looking statements are subject to uncertainty and changes in circumstances. Forward-looking statements are not guarantees of future results or performance and involve risks, assumptions and uncertainties that could cause actual events or results to differ materially from the events or results described in, or anticipated by, the forward-looking statements. Factors that could materially affect such forward-looking statements include certain economic, business, public market and regulatory risks and factors identified in the company's periodic reports filed with the Securities and Exchange Commission. All forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All forward-looking statements are made only as of the date of this release and the Company assumes no obligation to update forward-looking statements to reflect subsequent events or circumstances, except as required by law. Readers should not place undue reliance on these forward-looking statements. Contact:Profire Energy, Inc.Ryan Oviatt, Co-CEO and CFO(801) 796-5127 Three Part AdvisorsSteven Hooser, Partner(214) 872-2710

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Pioneer Natural Resources Company Reports Second Quarter 2020 Financial and Operating Results

Pioneer Natural Resources Company Reports Second Quarter 2020 Financial and Operating Results DALLAS, Aug. 04 /BusinessWire/ -- Pioneer Natural Resources Company (NYSE:PXD) ("Pioneer" or "the Company") today reported financial and operating results for the quarter ended June 30, 2020. Pioneer reported a second quarter net loss attributable to common stockholders of $439 million, or $2.66 per diluted share. These results include the effects of noncash mark-to-market adjustments and certain other unusual items. Excluding these items, the non-GAAP adjusted loss for the second quarter was $54 million, or $0.32 per diluted share. Cash flow from operating activities for the second quarter was $328 million. Highlights Delivered strong second quarter free cash flow1 of $165 million Averaged second quarter oil production of 215 thousand barrels of oil per day (MBOPD) Averaged second quarter production of 375 thousand barrels of oil equivalent per day (MBOEPD) Reported capital expenditures2 of $235 million during the second quarter, underspending revised capital budget Reduced second quarter lease operating expense (LOE) per barrel oil equivalent (BOE) by 16% from the first quarter Maintained 2020 capital expenditure guidance, while increasing 2020 oil production guidance by approximately 2.5%; continuing the trend of improved capital efficiency President and CEO Scott D. Sheffield stated, "Although the macroeconomic environment presented challenges, Pioneer delivered another excellent quarter, with continued strong operational execution. The Company generated $165 million of free cash flow1 through significant cost reductions and operational efficiency improvements. The improvements in capital efficiency during the second quarter led to a 2.5% increase in our full-year oil production guidance, while maintaining our previous capital spending range. Pioneer is also initiating a long-term investment framework that is underpinned by a cash flow reinvestment rate between 70% to 80%, prioritizing free cash flow generation and return of capital, while maintaining a strong balance sheet. Based on current strip pricing, this framework targets a total return to shareholders of 10% or greater, consisting of a competitive and growing base dividend, a variable dividend and oil growth of five percent plus. I am confident this framework will allow us to return a significant amount of capital to shareholders, while providing the flexibility to manage through commodity price cycles, strengthening Pioneer's investment proposition." Financial Highlights Pioneer maintains a strong balance sheet, with unrestricted cash on hand at the end of the second quarter of $180 million and net debt of $2.0 billion. The Company had $1.7 billion of liquidity as of June 30, 2020, comprised of $180 million of unrestricted cash and a $1.5 billion unsecured credit facility (undrawn as of June 30, 2020). During the second quarter, the Company's drilling, completion and facilities capital expenditures totaled $211 million. The Company's total capital expenditures2, including water infrastructure, totaled $235 million. Cash flow from operating activities during the second quarter was $328 million, leading to free cash flow1 of $165 million for the quarter. Financial Results For the second quarter, the average realized price for oil was $23.16 per barrel. The average realized price for natural gas liquids (NGLs) was $12.65 per barrel, and the average realized price for gas was $1.15 per thousand cubic feet. These prices exclude the effects of derivatives. Production costs, including taxes, averaged $6.27 per BOE. Depreciation, depletion and amortization (DD&A) expense averaged $12.21 per BOE. Exploration and abandonment costs were $10 million. General and administrative (G&A) expense was $60 million. Interest expense was $33 million. Other expense was $90 million, or $12 million excluding unusual items3. Operations Update Pioneer continued to see strong efficiency gains during the second quarter, enabling the Company to place 75 horizontal wells on production. During the first half of 2020, drilling operations averaged approximately 1,125 drilled feet per day and completion operations averaged approximately 1,775 completed feet per day, continuing to surpass original full-year 2020 expectations. Pioneer's well costs continue to benefit from these efficiency gains and service cost deflation, leading to cost reductions of approximately $1.8 million per well, or approximately 20%, when compared to the Company's original 2020 budget. The trend of reducing well costs continues to significantly improve capital efficiency. Pioneer expects approximately 60% of the achieved well cost savings this year to be sustainable through commodity price cycles. The Company's production costs also remain a focus and continue to trend lower. Horizontal LOE was $2.17 per BOE during the second quarter, a 13% decrease when compared to the first quarter of 2020 and a 27% decrease from the first quarter of 2019. The improved cost structure continues to drive strong margins and provide incremental cash flow for Pioneer. The Company continues to proactively curtail lower-margin, higher-cost vertical well production in the current commodity price environment, benefiting operating costs. Pioneer curtailed approximately 7 MBOPD of net production during the second quarter and expects approximately 6 MBOPD to remain curtailed in the current commodity price environment. Decisions to bring curtailed production back online are economically driven and evaluated on a well-by-well basis. Full-Year 2020 Update The Company is maintaining its 2020 drilling, completions and facilities capital budget range of $1.3 billion to $1.5 billion, with an additional approximately $100 million budgeted for Pioneer's differentiated water infrastructure, resulting in a total 2020 capital budget2 range of $1.4 billion to $1.6 billion. Pioneer is increasing its guidance for 2020 oil production to a range of 203 to 213 MBOPD and total production range of 356 to 371 MBOEPD. The revised production guidance reflects the current voluntary curtailments that are expected to average approximately 6 MBOPD in the current commodity price environment. The Company continues to monitor the fluid macroeconomic environment and will remain flexible and responsive to changing market conditions to preserve its strong balance sheet. The Company's previous activity guidance remains unchanged. From April through December 2020, the Company expects to operate an average of five to eight horizontal drilling rigs in the Midland Basin, including one horizontal drilling rig in the southern joint venture area, and operate an average of two to three frac fleets. Pioneer will continue to evaluate drilling and completion activity on an economic basis, with future activity levels assessed regularly. Pioneer is redefining its investment proposition to prioritize free cash flow generation and return of capital. This capital allocation framework is intended to create long-term value for shareholders by optimizing the reinvestment of cash flow to a rate of 70% to 80%, which accelerates the Company's free cash flow profile, while continuing to generate strong corporate returns. The Company is targeting a 10% or greater total annual return to shareholders, inclusive of a strong and growing base dividend4, a variable dividend4 and high-return oil growth. The Company believes this differentiated strategy will position Pioneer to be competitive across sectors. Pioneer continues to maintain substantial oil derivative coverage in order to protect the balance sheet, providing the Company with operational and financial flexibility throughout this period. The Company's financial and derivative mark-to-market results and open derivatives positions are outlined in the attached schedules. Third Quarter 2020 Guidance Third quarter 2020 oil production is forecasted to average between 191 to 201 MBOPD and total production is expected to average between 341 to 356 MBOEPD. Production costs are expected to average $6.25 per BOE to $7.75 per BOE. DD&A expense is expected to average $12.00 per BOE to $14.00 per BOE. Total exploration and abandonment expense is forecasted to be $5 million to $15 million. G&A expense is expected to be $58 million to $68 million. Interest expense is expected to be $31 million to $36 million. Other expense is forecasted to be $20 million to $30 million, excluding stacked drilling rig fees, idle frac fleet fees and other fees associated with reduced activity levels. Accretion of discount on asset retirement obligations is expected to be $2 million to $5 million. The cash flow impact related to purchases and sales of oil and gas, including firm transportation, is expected to be a loss of $20 million to $60 million, based on forward oil price estimates for the quarter. The Company's effective income tax rate is expected to be less than 21%. Current income taxes are expected to be nominal. Environmental, Social & Governance Pioneer views sustainability as a multidisciplinary focus that balances economic growth, environmental stewardship and social responsibility. The Company emphasizes developing natural resources in a manner that protects surrounding communities and preserves the environment. Pioneer is focused on reducing emissions and emission intensities. Between 2016 and 2018, the Company's greenhouse gas (GHG) emissions have been reduced by 24%, total GHG emission intensity has decreased by 38% and methane intensity has declined by 41%. Additionally, between January 2018 and July 2019, the Company was able to limit Permian flaring to less than 2% of its produced gas, one of the lowest flaring percentages in the Permian Basin. The Company's proactive measures, including monitoring 100% of its Permian facilities aerially for leak detection and repair (LDAR) and only producing a well once it is fully connected to a gas line, help to make Pioneer a leader in environmental stewardship. Socially, Pioneer maintains a proactive safety culture, supports a diverse workforce and inspires teamwork to drive innovation. The Board of Directors has a Health, Safety and Environment Committee and a Nominating and Corporate Governance Committee to provide director-level oversight of these activities. These committees help to promote a culture of continuous improvement in safety and environmental practices. For more details, see Pioneer's 2019 Sustainability Report at pxd.com/sustainability. Earnings Conference Call On Wednesday, August 5, 2020, at 9:00 a.m. Central Time, Pioneer will discuss its financial and operating results for the quarter ended June 30, 2020, with an accompanying presentation. Instructions for listening to the call and viewing the accompanying presentation are shown below. Internet: www.pxd.com Select "Investors," then "Earnings & Webcasts" to listen to the discussion, view the presentation and see other related material. Telephone: Dial (800) 353-6461 and enter confirmation code 9285881 five minutes before the call. A replay of the webcast will be archived on Pioneer's website. This replay will be available through August 31, 2020. Click here to register for the call-in audio replay and you will receive the dial-in information. Pioneer is a large independent oil and gas exploration and production company, headquartered in Dallas, Texas, with operations in the United States. For more information, visit www.pxd.com. Except for historical information contained herein, the statements in this news release are forward-looking statements that are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements and the business prospects of Pioneer are subject to a number of risks and uncertainties that may cause Pioneer's actual results in future periods to differ materially from the forward-looking statements. These risks and uncertainties include, among other things, volatility of commodity prices, product supply and demand, the impact of a widespread outbreak of an illness, such as the COVID-19 pandemic, on global and U.S. economic activity, competition, the ability to obtain environmental and other permits and the timing thereof, other government regulation or action, the ability to obtain approvals from third parties and negotiate agreements with third parties on mutually acceptable terms, litigation, the costs and results of drilling and operations, availability of equipment, services, resources and personnel required to perform the Company's drilling and operating activities, access to and availability of transportation, processing, fractionation, refining, storage and export facilities, Pioneer's ability to replace reserves, implement its business plans or complete its development activities as scheduled, access to and cost of capital, the financial strength of counterparties to Pioneer's credit facility, investment instruments and derivative contracts and purchasers of Pioneer's oil, natural gas liquids and gas production, uncertainties about estimates of reserves and resource potential, identification of drilling locations and the ability to add proved reserves in the future, the assumptions underlying forecasts, including forecasts of production, cash flow, well costs, capital expenditures, rates of return to shareholders, expenses, cash flows from purchases and sales of oil and gas net of firm transportation commitments, quality of technical data, environmental and weather risks, including the possible impacts of climate change, cybersecurity risks, ability to implement stock repurchases, the risks associated with the ownership and operation of the Company's oilfield services businesses and acts of war or terrorism. These and other risks are described in Pioneer's Annual Report on Form 10-K for the year ended December 31, 2019, Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, and other filings with the Securities and Exchange Commission. In addition, Pioneer may be subject to currently unforeseen risks that may have a materially adverse impact on it. Accordingly, no assurances can be given that the actual events and results will not be materially different than the anticipated results described in the forward-looking statements. Pioneer undertakes no duty to publicly update these statements except as required by law. Footnote 1: Free cash flow is a non-GAAP measure. See reconciliation to comparable GAAP number in supplemental schedules. Footnote 2: Excludes acquisitions, asset retirement obligations, capitalized interest, geological and geophysical G&A and corporate facilities. Footnote 3: Unusual items include the following: (i) COVID-19 operational plan changes of (a) $41 million related to idle frac fleet fees, stacked drilling rig charges and drilling rig early termination charges, (b) $6 million of underutilization and restructuring charges associated with the Company's well services business and (c) $4 million in sand take-or-pay deficiencies and (ii) $27 million of early extinguishment of debt charges associated with the Company's second quarter of 2020 debt refinancing activities. See reconciliation in supplemental schedules. Footnote 4: The declaration and payment of future dividends is at the discretion of the Company's board of directors and will depend on, among other things, the Company's earnings, financial condition, capital requirements, level of indebtedness, statutory and contractual restrictions applying to the payment of dividends and other considerations that the board of directors deems relevant. PIONEER NATURAL RESOURCES COMPANY UNAUDITED SUPPLEMENTARY EARNINGS PER SHARE INFORMATION (in millions) The Company uses the two-class method of calculating basic and diluted earnings per share. Under the two-class method of calculating earnings per share, generally acceptable accounting principles ("GAAP") provide that share-based awards with guaranteed dividend or distribution participation rights qualify as "participating securities" during their vesting periods. During periods in which the Company realizes net income attributable to common shareholders, the Company's basic net income per share attributable to common shareholders is computed as (i) net income attributable to common stockholders, (ii) less participating share-based basic earnings (iii) divided by weighted average basic shares outstanding. The Company's diluted net income per share attributable to common stockholders is computed as (i) basic net income attributable to common stockholders, (ii) plus the reallocation of participating earnings, if any, (iii) divided by weighted average diluted shares outstanding. During periods in which the Company realizes a net loss attributable to common stockholders, securities or other contracts to issue common stock would be dilutive to loss per share; therefore, conversion into common stock is assumed not to occur. The Company's net income (loss) attributable to common stockholders is reconciled to basic and diluted net income (loss) attributable to common stockholders as follows: PIONEER NATURAL RESOURCES COMPANY UNAUDITED SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES (in millions) EBITDAX, discretionary cash flow ("DCF") (as defined below) and net debt to trailing twelve months EBITDAX are presented herein, and reconciled to the GAAP measures of net income and net cash provided by operating activities, because of their wide acceptance by the investment community as financial indicators of a company's ability to internally fund exploration and development activities and to service or incur debt. The Company also views the non-GAAP measures of EBITDAX, DCF and net debt to trailing twelve months EBITDAX as useful tools for comparisons of the Company's financial indicators with those of peer companies that follow the full cost method of accounting. EBITDAX and DCF should not be considered as alternatives to net income or net cash provided by operating activities, as defined by GAAP. The Company's net debt to trailing twelve months EBITDAX is calculated as follows: PIONEER NATURAL RESOURCES COMPANY UNAUDITED SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES (continued) (in millions, except per share data) Adjusted loss attributable to common stockholders excluding noncash mark-to-market ("MTM") adjustments and loss attributable to common stockholders excluding noncash MTM adjustments and unusual items are presented in this earnings release and reconciled to the Company's net loss attributable to common stockholders (determined in accordance with GAAP), as the Company believes these non-GAAP financial measures reflect an additional way of viewing aspects of the Company's business that, when viewed together with its GAAP financial results, provide a more complete understanding of factors and trends affecting its historical financial performance and future operating results, greater transparency of underlying trends and greater comparability of results across periods. In addition, management believes that these non-GAAP financial measures may enhance investors' ability to assess the Company's historical and future financial performance. These non-GAAP financial measures are not intended to be a substitute for the comparable GAAP financial measure and should be read only in conjunction with the Company's consolidated financial statements prepared in accordance with GAAP. Noncash MTM adjustments and unusual items may recur in future periods; however, the amount and frequency can vary significantly from period to period. The Company's net loss attributable to common stockholders as determined in accordance with GAAP is reconciled to loss adjusted for noncash MTM adjustments including (i) the Company's derivative positions, (ii) contingent consideration attributable to the 2019 South Texas divestiture and (iii) the Company's equity investment in ProPetro Holding Corp. ("ProPetro"), and unusual items is as follows: PIONEER NATURAL RESOURCES COMPANY UNAUDITED SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES (continued) (in millions) Free cash flow ("FCF") is a non-GAAP financial measure. As used by the Company, FCF is defined as net cash provided by operating activities, adjusted for changes in operating assets and liabilities, less capital expenditures. The Company believes this non-GAAP measure is a financial indicator of the Company's ability to internally fund acquisitions, debt maturities, dividends and share repurchases after capital expenditures. View source version on businesswire.com: https://www.businesswire.com/news/home/20200804005955/en/   back

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SilverBow Resources Announces Second Quarter 2020 Results

SilverBow Resources Announces Second Quarter 2020 Results HOUSTON, Aug. 04 /BusinessWire/ -- SilverBow Resources, Inc. (NYSE:SBOW) ("SilverBow" or the "Company") today announced operating and financial results for the second quarter of 2020. Highlights include: Net production averaged approximately 142 million cubic feet of natural gas equivalent per day ("MMcfe/d"), above the high end of guidance Returned approximately 50 MMcfe/d of previously curtailed net production to sales in June; approximately 50 MMcfe/d of net production remains shut-in Closed divestiture of non-core Wyoming assets for approximately $5 million of total proceeds Reported a net loss of $306 million primarily due to a $260 million non-cash impairment write-down on a pre-tax basis, Adjusted EBITDA of $26 million and free cash flow ("FCF") of $14 million1. Adjusted EBITDA and FCF are non-GAAP measures defined and reconciled in the tables included with today's news release Anticipate $40-$50 million of FCF (a non-GAAP measure) for full year 2020, inclusive of a gas development program planned for the fourth quarter $20 million reduction in revolver borrowings compared to prior quarter; leverage ratio2 of 2.4x and liquidity of $67 million at quarter-end Active hedging program to combat price volatility; primed for gas development in late 2020 MANAGEMENT COMMENTS Sean Woolverton, SilverBow's Chief Executive Officer, commented, "Over the course of the second quarter, the SilverBow team was focused on production management, cost reduction initiatives and optimizing multiple playbooks for various commodity price scenarios. The second quarter will mark the low point in our production profile for 2020. Looking forward to the remainder of the year, we will be returning the remainder of our curtailed volumes to sales and are currently in the process of bringing online our inventory of drilled but uncompleted wells ("DUCs") in the third quarter. Our plan is to restart our drilling program during the fourth quarter of 2020, targeting the development of our high rate of return gas projects. Over the next 18 months, our goal remains to maximize our free cash flow generation and protect our balance sheet. We are on track to achieve our stated objective of $40-$50 million of free cash flow for full year 2020, inclusive of the additional gas development expenditures we have allocated to our capital budget. The planned increase in capital expenditures in the fourth quarter of 2020 bolsters our preliminary 2021 free cash flow target of $20-$40 million at current strip prices, with potential tailwinds from higher gas prices this winter and through next year. Our visibility into cash flows over the near-term is supported by our hedged position on oil, which covers a substantial portion of our forecasted oil production through year-end 2021, as well as our gas hedging strategy, which has utilized a heavier weighting of two-way collars next year and intentionally preserves meaningful upside exposure to any improvement in 2021 gas strip from current levels. Additionally, at the midpoint of our production guidance, we would reach quarterly highs on our oil production combined with rising gas production rates as we exit the year. Moving into 2021, we have the flexibility to allocate capital across a well-balanced portfolio of gas and liquids development locations." Mr. Woolverton commented further, "I want to thank our employees, contractors and vendors who continue to find innovative solutions to drive value amidst ongoing disruptions to our daily lives. As I have stated before, our employees are our greatest asset. We have an established track record of executing on our goals, and continue to deploy a winning strategy that is returns-focused and risk-mitigated. As the economy starts to find equal footing, we expect natural gas prices to increase. Our business strategy remains the same. Specifically, we focus on owning high-quality assets with proximity to premium markets, maintaining a balanced commodity mix, and driving shareholder returns through our strong margins and low-cost structure. Proactive balance sheet management and operational agility will remain critical in managing the near term. We believe that our success in identifying attractive acquisition and divestiture opportunities and locking in returns through our active hedging program will continue to differentiate SilverBow from its peers. We are well positioned to capitalize on an expanding merger and acquisition landscape over the next several years, creating a favorable risk-reward for stakeholders with the ultimate goal of sustainable growth in shareholder returns." OPERATIONS HIGHLIGHTS During the second quarter of 2020, SilverBow had essentially no drilling and completion ("D&C") activity as a result of releasing its super spec rig at the beginning of April. In addition to temporarily suspending its D&C program, the Company curtailed an average of 57 million cubic feet per day ("MMcf/d") of net natural gas and 1,930 barrels per day ("Bbls/d") of net oil production during the quarter. SilverBow commenced voluntary well shut-ins in March, and increased the amount of shut-in production in April. Working with our midstream partners, approximately 2,750 Bbls/d of curtailed net oil production was returned to sales ahead of schedule in June, driving oil and natural gas liquids ("NGL") volumes above the second quarter guidance range. As the year unfolds, the Company will continue assessing optimal production timing in response to the evolving commodity price environment. The wells that have been returned to production to-date have not experienced degradation and have exhibited higher production rates compared to pre-shut-in levels. The Company is analyzing the performance of these wells in real-time to optimize choke management strategy and maximize production profiles and estimated ultimate recoveries. On the expense management front, SilverBow is actively engaging in further cost savings initiatives, primarily related to chemicals, rentals and other ancillary services. The Company values its strong vendor relationships and is working together with them to ensure mutual success. As it pertains to SilverBow's recent acquisition, the Company has already identified a number of cost saving measures primarily through the use of existing infrastructure. SilverBow continues to analyze the subsurface characteristics of the new acreage to plan for future capital investment. Consistent with the Company's strategy to align production start dates with higher prices, SilverBow intends to bring eight wells in the McMullen Oil area online over the second half of 2020. The Company secured favorable service pricing for the five wells it intends to complete in the third quarter, driving down capital costs by approximately 30% compared to initial estimates. SilverBow's procurement initiatives are laying the groundwork for the resumption of the Company's drilling program in the fourth quarter. PRODUCTION VOLUMES, OPERATING COSTS AND REALIZED PRICES SilverBow's total net production for the second quarter averaged approximately 142 MMcfe/d. Production mix for the second quarter consisted of approximately 82% natural gas, 10% oil and 8% NGL. Natural gas comprised 73% of total oil and gas sales for the second quarter, compared to 59% in the first quarter of 2020. Lease operating expenses ("LOE") were $0.39 per Mcfe for the second quarter. After deducting $1.2 million of non-cash compensation expense, cash general and administrative costs were $5.0 million for the second quarter, with a per unit cash cost of $0.39 per Mcfe. Transportation and processing expenses ("T&P") came in at $0.35 per Mcfe and production and ad valorem taxes were 8.2% of oil and gas revenue for the second quarter. Total production expenses, which include LOE, T&P and production taxes, were $0.90 per Mcfe for the quarter. The Company's all-in cash operating expenses for the quarter, which includes cash general and administrative costs, were $1.29 per Mcfe. SilverBow continues to benefit from strong basis pricing in the Eagle Ford, while recent conditions have impacted historical oil averages. Crude oil and natural gas realizations in the second quarter were 86% of West Texas Intermediate ("WTI") and 99% of Henry Hub, respectively, excluding hedging. The Company's average realized natural gas price, excluding the effect of hedging, was $1.70 per thousand cubic feet of natural gas ("Mcf") compared to $2.66 per Mcf in the second quarter of 2019. The average realized crude oil selling price, excluding the effect of hedging, was $23.82 per barrel compared to $61.60 per barrel in the second quarter of 2019. The average realized NGL selling price in the quarter was $9.49 per barrel (34% of WTI benchmark) compared to $14.53 per barrel (24% of WTI benchmark) in the second quarter of 2019. FINANCIAL RESULTS SilverBow reported total oil and gas sales of $24.8 million for the second quarter. On a GAAP basis, the Company reported a net loss of $306.0 million for the second quarter. Due to the effects of pricing and timing of projects, SilverBow reported a non-cash impairment write-down, on a pre-tax basis, of $260.3 million on the Company's oil and natural gas properties in the second quarter. Additionally, included in the second quarter's net loss is an unrealized loss on the value of the SilverBow's derivative contracts of $26.5 million and a $22.4 million net tax provision. For the second quarter, SilverBow generated Adjusted EBITDA (a non-GAAP measure) of $26.0 million and FCF (a non-GAAP measure) of $14.0 million. At quarter-end, the Company's net debt was $463.4 million, calculated as total long-term debt of $470.0 million less $6.6 million of cash, a $14.3 million reduction compared to year-end 2019. Capital expenditures during the second quarter, excluding acquisition and divestiture activity, totaled $4.8 million on an accrual basis. 2020 GUIDANCE AND OUTLOOK Third Quarter: The third quarter marks the return to sales of the majority of the previously curtailed volumes and the completion of five DUCs. For the third quarter, SilverBow is guiding for estimated production of 173-180 MMcfe/d, with natural gas volumes expected to comprise 125-130 MMcf/d, although additional curtailments necessitated by storage constraints, commodity prices or other impacts from the COVID-19 pandemic could result in lower third quarter production. Regardless of commodity prices, the Company carefully considers the production economics and the net benefit to its borrowing base and its financials before committing to future capital investment. Full Year: For the full year 2020, SilverBow increased the midpoint of its 2020 capital budget by $12.5 million, with a revised range of $95-$105 million. The Company plans to add a rig in the fourth quarter and commence a nine-well gas development program in Webb County. For the full year, SilverBow is guiding to a production range of 176-184 MMcfe/d with natural gas volumes expected to comprise 135-140 MMcf/d. Additional curtailments necessitated by storage constraints, commodity prices or other impacts from the COVID-19 pandemic could result in lower full year production and adversely affect the Company's ability to achieve FCF and other guidance. SilverBow is reaffirming its FCF target of $40-$50 million for the full year, inclusive of the additional D&C activity planned for the fourth quarter. This gas development project in late 2020 accelerates the Company's ability to generate approximately $20-$40 million of free cash flow3 in 2021 while maintaining upside to higher gas prices by utilizing more two-way collars in its hedge strategy. Additional detail concerning SilverBow's third quarter and full year 2020 guidance can be found in the table included with today's news release and the Corporate Presentation uploaded to the Investor Relations section of the Company's website. HEDGING UPDATE Hedging continues to be an important element of SilverBow's strategy to protect cash flow. The Company's active hedging program provides greater predictability of cash flows and preserves exposure to higher commodity prices. In conjunction with unwinding oil derivative contracts in 2020 and 2021, SilverBow is amortizing the $38 million of cash inflow it received in discreet amounts for each month over the same time period. The amortized hedge gains will factor into the Company's calculation of Adjusted EBITDA for covenant compliance purposes through the end of 2021. As of July 31, 2020, the Company had 67% of total estimated production volumes hedged for the remainder of 2020, using the midpoint of production guidance. For the remainder of 2020, SilverBow has 87 MMcf/d hedged at an average price of $2.60 per million British thermal units ("MMBtu") and 4,811 Bbls/d of oil hedged at an average price of $45.34 per barrel. For 2021, the Company has 67 MMcf/d hedged at an average price of $2.34 per MMBtu and 3,364 Bbls/d of oil hedged at an average price of $45.19 per barrel. Notably, SilverBow's hedges are a combination of swaps and collars with the weighted average price factoring in the floor. As of July 31, 2020, the Company's mark-to-market value of its hedge portfolio was $11.8 million. Please see SilverBow's Form 10-Q filing for the second quarter of 2020, which the Company expects to file on Wednesday, August 5, 2020, for a detailed summary of its derivative contracts. CAPITAL STRUCTURE AND LIQUIDITY As of June 30, 2020, SilverBow's liquidity position was $66.6 million, consisting of $6.6 million of cash and $60.0 million of availability under the Company's credit facility. SilverBow's net debt was $463.4 million, calculated as total long-term debt of $470.0 million less $6.6 million of cash, a 3% decrease from December 31, 2019. As of July 31, 2020, SilverBow had 11.9 million total common shares outstanding. CONFERENCE CALL AND UPDATED INVESTOR PRESENTATION SilverBow will host a conference call for investors on Wednesday, August 5, 2020, at 9:00 a.m. Central Time (10:00 a.m. Eastern Time). Investors and participants can register for the call in advance by visiting http://www.directeventreg.com/registration/event/7269448. After registering, instructions and dial-in information will be provided on how to join the call. A simultaneous webcast of the call may be accessed over the internet by visiting SilverBow's website at www.sbow.com, clicking on "Investor Relations" and "Events and Presentations" and then clicking on the "Second Quarter 2020 Earnings Conference Call" link. The webcast will be archived for replay on the Company's website for 14 days. Additionally, an updated Corporate Presentation will be uploaded to the Investor Relations section of SilverBow's website before the conference call. ABOUT SILVERBOW RESOURCES, INC. SilverBow Resources, Inc. (NYSE: SBOW) is a Houston-based energy company actively engaged in the exploration, development, and production of oil and gas in the Eagle Ford Shale in South Texas. With over 30 years of history operating in South Texas, the Company possesses a significant understanding of regional reservoirs which it leverages to assemble high quality drilling inventory while continuously enhancing its operations to maximize returns on capital invested. For more information, please visit www.sbow.com. FORWARD-LOOKING STATEMENTS This release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements represent management's expectations or beliefs concerning future events, and it is possible that the results described in this release will not be achieved. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from the results discussed in the forward-looking statements, including among other things: the severity and duration of world health events, including the COVID-19 pandemic, related economic repercussions and the resulting severe disruption in the oil and gas industry and negative impact on demand for oil and gas, which is negatively impacting our business; the current significant surplus in the supply of crude oil and actions by the members of the Organization of the Petroleum Exporting Countries ("OPEC") and Russia (together with OPEC and other allied producing countries, "OPEC+") with respect to oil production levels and announcements of potential changes in such levels, including the ability of the OPEC+ countries to agree on and comply with supply limitations; operational challenges relating to the COVID-19 pandemic and efforts to mitigate the spread of the virus, including logistical challenges, protecting the health and well-being of our employees, remote work arrangements, performance of contracts and supply chain disruptions; shut-in or curtailment of production due to decreases in available storage capacity or other factors; oil and natural gas price levels and volatility; our ability to satisfy our short- or long-term liquidity needs; our ability to execute our business strategy, including the success of our drilling and development efforts; timing, cost and amount of future production of oil and natural gas; expectations regarding future free cash flow; and other factors discussed in the Company's reports filed with the Securities and Exchange Commission ("SEC"), including its Annual Report on Form 10-K for the year ended December 31, 2019 and Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed thereafter. All statements, other than historical facts included in this press release, regarding our strategy, future operations, financial position, future cash flows, estimated production levels, expected oil and natural gas pricing, estimated oil and natural gas reserves or the present value thereof, reserve increases, capital expenditures, budget, projected costs, prospects, plans and objectives of management are forward-looking statements. All forward-looking statements speak only as of the date of this news release. You should not place undue reliance on these forward-looking statements. Although we believe that our plans, intentions and expectations reflected in or suggested by the forward-looking statements we make in this release are reasonable, we can give no assurance that these plans, intentions or expectations will be achieved. The risk factors and other factors noted herein and in the Company's SEC filings could cause its actual results to differ materially from those contained in any forward-looking statement. These cautionary statements qualify all forward-looking statements attributable to us or persons acting on our behalf. All subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by the foregoing. We undertake no obligation to publicly release the results of any revisions to any such statements that may be made to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for us to predict all such factors. (Footnotes) 1 Free cash flow ("FCF") is a non-GAAP financial measure. Definitions of non-GAAP financial measures and reconciliations of non-GAAP financial measures to the closest GAAP-based financial measures appear at the end of this release. 2 Leverage ratio is defined as total long-term debt, before unamortized discounts, divided by Adjusted EBITDA for Leverage Ratio (a non-GAAP measure defined and reconciled in the tables included with today's news release) for the trailing twelve-month period. 3 A forward-looking estimate of net income (loss) is not provided with the forward-looking estimate of FCF (a non-GAAP measure) because the items necessary to estimate net income (loss) are not accessible or estimable at this time. (Financial Highlights to Follow) Definition of Non-GAAP Measures as Calculated by the Company (Unaudited) The following non-GAAP measures are presented in addition to financial statements as SilverBow believes these metrics and performance measures are widely used by the investment community, including investors, research analysts and others, to evaluate and useful in comparing investments among upstream oil and gas companies in making investment decisions or recommendations. These measures, as presented, may have differing calculations among companies and investment professionals and may not be directly comparable to the same measures provided by others. A non-GAAP measure should not be considered in isolation or as a substitute for the related GAAP measure or any other measure of a company's financial or operating performance presented in accordance with GAAP. A reconciliation of each of these non-GAAP measures to the most directly comparable GAAP measure or measures is presented below. These measures may not be comparable to similarly titled measures of other companies. Total Cash Operating Expenses: Total Cash Operating Expenses is calculated as lease operating expenses plus transportation and processing expenses plus production taxes plus cash general and administrative expenses. Cash general and administrative expenses is a non-GAAP measure calculated as net general and administrative costs less share-based compensation Adjusted EBITDA: Adjusted EBITDA is calculated as net income (loss) plus (less) depreciation, depletion and amortization, accretion of asset retirement obligations, interest expense, impairment of oil and natural gas properties, net losses (gains) on commodity derivative contracts, amounts collected (paid) for commodity derivative contracts held to settlement, income tax expense (benefit); and share-based compensation expense. Adjusted EBITDA excludes certain items that the Company believes affect the comparability of operating results, including items that are generally non-recurring in nature or whose timing and/or amount cannot be reasonably estimated. Adjusted EBITDA is also important as it is considered among the financial covenants under SilverBow's First Amended and Restated Senior Secured Revolving Credit Agreement with JPMorgan Chase Bank, National Association, as administrative agent, and certain lenders party thereto (as amended, the "Credit Agreement"), a material source of liquidity for the Company. Please reference the SilverBow's 2019 Form 10-K and second quarter 2020 Form 10-Q for discussion of the Credit Agreement and its covenants. Adjusted EBITDA for Leverage Ratio: Adjusted EBITDA for Leverage Ratio is calculated as Adjusted EBITDA (defined above) plus amortization of derivative contracts, in accordance with the covenant compliance calculations under the Credit Agreement. Adjusted EBITDA Margin: Adjusted EBITDA Margin is calculated as Adjusted EBITDA (defined above) divided by oil and gas sales plus amounts collected (paid) for commodity derivative contracts held to settlement. Free cash flow ("FCF"): Free cash flow is calculated as Adjusted EBITDA (defined above) plus (less) monetized derivative contracts, cash interest expense, capital expenditures and current income tax (expense) benefit. Net debt: Net debt is calculated as the total principal amount of second lien notes plus borrowings on the Company's credit facility less cash and cash equivalents. Reconciliation of Net Income (GAAP) to Adjusted EBITDA to Free Cash Flow (Non-GAAP) (Unaudited) SilverBow presents Adjusted EBITDA attributable to common stockholders and Adjusted EBITDA Margin in addition to reported net income (loss) in accordance with GAAP. Both metrics are non-GAAP measures that are used by SilverBow's management and by external users of the Company's financial statements, such as investors, commercial banks and others, to assess SilverBow's operating performance as compared to that of other companies, without regard to financing methods, capital structure or historical cost basis. It is also used to assess the Company's ability to incur and service debt and fund capital expenditures. SilverBow defines Adjusted EBITDA as net income (loss): Plus (Less): Depreciation, depletion and amortization; Accretion of asset retirement obligations; Interest expense; Impairment of oil and natural gas properties; Net losses (gains) on commodity derivative contracts; Amounts collected (paid) for commodity derivative contracts held to settlement; Income tax expense (benefit); and Share-based compensation expense Adjusted EBITDA for Leverage Ratio is defined as Adjusted EBITDA plus amortization of derivative contracts. SilverBow defines Free Cash Flow as Adjusted EBITDA: Plus (Less): Monetized derivative contracts Cash interest expense, net; Capital expenditures; and Current income tax (expense) benefit SilverBow defines Adjusted EBITDA Margin as Adjusted EBITDA divided by the sum of oil and gas sales and derivative cash settlements collected or paid. The Company's Adjusted EBITDA and Adjusted EBITDA Margin should not be considered alternatives to net income (loss), operating income (loss), cash flows provided by (used in) operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. SilverBow's Adjusted EBITDA and Adjusted EBITDA Margin may not be comparable to similarly titled measures of another company because all companies may not calculate Adjusted EBITDA and Adjusted EBITDA Margin in the same manner. View source version on businesswire.com: https://www.businesswire.com/news/home/20200804005962/en/   back

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Torchlight Receives Nasdaq Extension

Torchlight Receives Nasdaq Extension PLANO, TX / ACCESSWIRE / August 4, 2020 / Torchlight Energy Resources, Inc. (NASDAQ:TRCH) ("Torchlight" or the "Company"), today received a letter from NASDAQ for an extension to meet its minimum bid requirement with NASDAQ for 180 days or until Feb 1, 2021. "We have remained in compliance with all aspects of our listing with the exception of the minimum bid price," stated John Brda CEO of Torchlight. "The extension received today allows us 180 days to comply with the minimum bid requirement and more importantly, it gives the Company time to recover from the pandemic. In the next six months, we hope to make good progress on the sale of our non-core assets as well as bringing in a suitor or partner on the Orogrande project." About Torchlight Energy Torchlight Energy Resources, Inc. (NASDAQ:TRCH), based in Plano, Texas, is a high growth oil and gas Exploration and Production (E&P) company with a primary focus on acquisition and development of highly profitable domestic oil fields. The company has assets focused in West and Central Texas where their targets are established plays such as the Permian Basin. For additional information on the Company, please visit www.torchlightenergy.com. Forward Looking Statement This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements involve risks and uncertainties that could cause actual results to differ materially from those described in such statements. Such forward-looking statements involve known and unknown risks and uncertainties, including risks associated with the Company's ability to obtain additional capital in the future to fund planned expansion, the demand for oil and natural gas, general economic factors, competition in the industry and other factors that could cause actual results to be materially different from those described herein as anticipated, believed, estimated or expected. The Company is under no obligation (and expressly disclaims any such obligation) to update or alter its forward-looking statements whether as a result of new information, future events or otherwise. Investor Relations Contact: Derek Gradwell Investor Relations Phone: 512-270-6990 Email: [email protected] SOURCE: Torchlight Energy Resources, Inc. View source version on accesswire.com: https://www.accesswire.com/600253/Torchlight-Receives-Nasdaq-Extension

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MTN DEW® Fans, Revvv Your Engines - MTN DEW SPARK™ Launches Exclusively At Speedway

MTN DEW® Fans, Revvv Your Engines - MTN DEW SPARK™ Launches Exclusively At SpeedwayBold, new raspberry-lemonade flavored beverage hits shelves at more than 2,500 locations in North and South regions of U.S.Fans in select states can also win a free case of MTN DEW SPARK through DEW Den sweepstakes PURCHASE, N.Y., Aug. 4, 2020 /PRNewswire/ -- MTN DEW is bringing a bold, new beverage to fans who are looking to spark their day into high gear with an exciting new flavor - MTN DEW® SPARK™. This unique, pink colored DEW with a blast of raspberry lemonade flavor will be available exclusively at more than 2,500 Speedway locations in the North and South regions of the U.S. for a limited-time - so race to get yours now. "MTN DEW is putting its fans in the driver's seat with this exclusive partnership with Speedway," said Umi Patel, CMO, PepsiCo North Division. "We know that DEW Nation is always looking for fun, new flavors that can exhilarate their taste buds - especially as we enter the last few weeks of summer. That's why we're excited to bring the spark to a Speedway near you." The MTN DEW SPARK launch is one exciting part of a yearlong platform at Speedway called "Year of DEW®" - created to drive purchase of DEW products at Speedway, giving fans a chance to win exclusive product releases, epic promotions and massive DEW surprises all year long. With the launch of MTN DEW SPARK, the brand is kicking these promotions into high gear with a new "Revvv Up Your DEW Den" contest. From now until September 27, consumers can enter to win weekly grand prizes of custom MTN DEW SPARK gear - including a double ring neon wall clock or 80-quart rolling cooler. And, even if you don't live near a Speedway, fans can enter to win by visiting www.yearofdew.com. Daily winners will also be selected to receive their very own free case of 20oz MTN DEW SPARK - bringing an exhilarating, racing-themed experience right to their home. "We're very pleased to 'Do the Dew' in a big way this year at Speedway, and the exclusive launch of MTN DEW SPARK at our stores allows us to continue the great engagement with our customers who 'Do the Dew' as well," said Tim Griffith, Speedway's President. "We are thrilled to partner with MTN DEW to build on our outstanding, wide selection of products offered, and to continue delivering a safe, convenient, and personal shopping experience for our loyal customers." To participate in the Year of DEW sweepstakes or to try MTN DEW SPARK, DEW Nation can celebrate in the fast lane by visiting their local Speedway stores or heading to www.yearofdew.com, including official contest rules and eligibility. To find MTN DEW SPARK at your participating Speedway location, visit www.mountaindew.com/store-locator/. Thirsty for more? Join the conversation by following twitter.com/mountaindew. About MTN DEWMOUNTAIN DEW®, a product of PepsiCo North America Beverages, is the No. 1 flavored carbonated soft drink in the U.S. With its one-of-a-kind citrus taste, MOUNTAIN DEW exhilarates and quenches with every sip. In addition to the original MOUNTAIN DEW and DIET MOUNTAIN DEW®, the permanent DEW® product line includes MTN DEW ICE™, MTN DEW® KICKSTART™, MOUNTAIN DEW CODE RED®, MOUNTAIN DEW PITCH BLACK®, MOUNTAIN DEW VOLTAGE®, MOUNTAIN DEW WHITE OUT®, MTN DEW® Label Series and new MTN DEW® ZERO SUGAR. For more information, check out www.mountaindew.com, www.facebook.com/mountaindew or follow on Twitter @mountaindew. About PepsiCo PepsiCo products are enjoyed by consumers more than one billion times a day in more than 200 countries and territories around the world. PepsiCo generated more than $64 billion in net revenue in 2018, driven by a complementary food and beverage portfolio that includes Frito-Lay, Gatorade, Pepsi-Cola, Quaker and Tropicana. PepsiCo's product portfolio includes a wide range of enjoyable foods and beverages, including 22 brands that generate more than $1 billion each in estimated annual retail sales. Guiding PepsiCo is our vision to Be the Global Leader in Convenient Foods and Beverages by Winning with Purpose. "Winning with Purpose" reflects our ambition to win sustainably in the marketplace and embed purpose into all aspects of the business. For more information, visit www.pepsico.com. About Speedway, LLCSpeedway is the nation's second largest company-owned and -operated convenience store chain with nearly 3,900 retail convenience stores across the United States. Headquartered in Enon, Ohio, Speedway is a subsidiary of Marathon Petroleum Corporation (NYSE: MPC). For more information, visit www.speedway.com Media Contacts:Jillian [email protected] Simona [email protected] Marna Berlekamp, Marathon Petroleum [email protected] View original content to download multimedia:http://www.prnewswire.com/news-releases/mtn-dew-fans-revvv-your-engines--mtn-dew-spark-launches-exclusively-at-speedway-301105631.html SOURCE PepsiCo

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Houston American Energy Provides Operational Update

Houston American Energy Provides Operational Update HOUSTON, Aug. 4, 2020 /PRNewswire/ -- Houston American Energy Corp. (NYSE American: HUSA) today provided an update on planned drilling and development operations on its U.S. Permian Basin acreage. Following its announcement in late March 2020 of the deferral of all planned drilling and development operations due to the onset of the COVID-19 pandemic, the company is restarting the planned drilling and development of its Permian Basin acreage. In Yoakum County, TX, a frac procedure on the company's Frost #2-H well is scheduled to commence on August 24, 2020. The Frost #2-H well, our second San Andres well in Yoakum County, was drilled and completed in March, 2020. The company holds an 18.6% working interest in the well. In Hockley County, TX, the company has executed a Joint Operating Agreement on its first planned well with drilling operations expected to commence in September 2020. The planned well is located on a 5,871-acre block. The company holds a 20% working interest in the block, which is part of 20,367-acre area of mutual interest, with the company paying 26.667% of costs of the initial test well through the point at which the well is drilled, completed, equipped and ready for operation, production or disposal. Jim Schoonover, CEO of Houston American Energy, stated, "We, and our operating partners, believe the time is right to resume our exploration and production activities. The domestic rig count is down dramatically since the beginning of the year and industry pricing has stabilized at much more favorable rates. With drilling and development costs down markedly, we believe it is an economical time to restart operations." About Houston American Energy Corp. Based in Houston, Texas, Houston American Energy Corp. is a publicly-traded independent energy company with interests in oil and natural gas wells, minerals and prospects. The company's business strategy includes a property mix of producing and non-producing assets with a focus on the Permian Basin in Texas, Louisiana and Colombia. Forward-Looking Statements The information in this release includes certain forward-looking statements that are based on assumptions that in the future may prove not to have been accurate, including statements regarding the actual timing of drilling projects and our ability to realize improved well economics. The timing of operations and ultimate cost and success of drilling operations is subject to numerous risk factors, including our dependence upon third party operators and suppliers to perform within the planned time frame and within budget, the ultimate recoveries from prospects, and the availability and cost of rigs and services necessary to conduct drilling operations, among other risks described in our reports filed with the Securities and Exchange Commission. For additional information, view the company's website at www.houstonamerican.com or contact Houston American Energy Corp. at (713) 222-6966. View original content to download multimedia:http://www.prnewswire.com/news-releases/houston-american-energy-provides-operational-update-301105324.html SOURCE Houston American Energy Corp.

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Frank's International N.V. Announces Second Quarter 2020 Results

Frank's International N.V. Announces Second Quarter 2020 Results HOUSTON, Aug. 04, 2020 (GLOBE NEWSWIRE) -- Frank's International N.V. (NYSE: FI) (the "Company" or "Frank's") today reported financial and operational results for the three and six months ended June 30, 2020. Second Quarter 2020 Financial Highlights Second quarter net loss of $34.2 million improved over prior period resulting from market-related impairments taken in the first quarter of 2020. Second quarter revenue of $86.1 million and Adjusted EBITDA of ($1.7) million reflecting decremental margin of 24% driven by cost reductions.Second quarter cash flows from operating activities of $26.4 million and free cash flow of $16.1 million both showing a significant improvement from the prior quarter. Actions both completed and in progress expanding previously announced cost reduction initiatives, projecting an approximate 25% year over year reduction in costs. "The second quarter reflects the sudden and historic downturn in our industry created by the Covid-19 pandemic and highly volatile and lower oil prices. During the quarter, we saw some of our highest producing geographies experience reductions in rig activity of greater than 80% resulting in a significant revenue decline. We communicated our aggressive cost cutting measures last quarter, and I am very pleased that Frank's management and our entire employee base has executed various cost reduction plans expeditiously, the results of which are reflected in our reported results. While we cannot control the operational plans of our customers and the resulting short term revenue swings we experience, we can and have controlled our costs during the quarter, holding decremental margins to less than 25%. This was made possible through the effective management of a wide range of cost control measures that we accelerated and intensified over the past quarter. Cost containment and efficiency is not a periodic exercise but something we are practicing on a daily basis at Frank's. The entire Frank's team remains focused on exploring opportunities to work more efficiently in the future and reset our cost base," said Michael Kearney, the Company's Chairman, President and Chief Executive Officer. "We are also focused on maintaining a strong balance sheet and cash position. Our progress in this area is reflected by the resurgence in our cash balance from year end levels and strong free cash flow during the quarter." Mr. Kearney continued, "Our customers and their respective drilling programs continue to show impacts from Covid-19 shutdowns due to logistics issues, as well as delays in the start-up of new drilling programs. We are seeing signs of stabilization, with some rigs recommencing work in the third quarter and others planned to begin programs during the fourth quarter. As we navigate the Covid-19 pandemic, protecting the health and safety of our employees, customers and communities remains of the utmost importance, with our cross-functional Covid-19 task force overseeing ongoing, localized risk assessment and modified work protocols. "Frank's continues to generate value for our customers by offering technological solutions that safely reduce the time to drill, case and complete wells. Our multi-product line solutions add value in the most extreme applications, most recently with a joint Cementing and TRS operation on behalf of a major operator in the Gulf of Mexico. Following intensive pre-job technical analysis, the ultra-heavy landing string installation utilized multiple Frank's load bearing technologies. The combined solutions facilitated a safe and efficient operation, while achieving a customer hook load record, adding to the Frank's history of record hook load achievements. "Frank's also recently introduced the Caseless Insertable™ Float System, a new cementing technology suitable for a float collar, landing collar and guide or float shoe assembly. This versatile, patented solution offers a modular design and threadless interface that can be configured to a wide range of operational requirements, eliminating specialized premium connections, manufacturing lead time and the costs associated with transporting and storing excess inventory. It has performed successfully in both offshore and onshore applications, most recently on behalf of a major operator in the U.S. onshore market. "In summary, we have aggressively responded to recent market shocks and continued to place our strongest focus on delivering exemplary service to our customers. Our employees have demonstrated their commitment to excellence and this organization, and we are poised to weather these conditions and position ourselves well for an eventual recovery," concluded Mr. Kearney. Segment Results Tubular Running Services Tubular Running Services revenue was $62.3 million for the second quarter of 2020, compared to $89.5 million in the first quarter of 2020, and $106.6 million for the second quarter of 2019. The decrease in sequential revenue, which is down 30% from the first quarter and 42% from the prior year quarter, was primarily driven by activity disruptions brought about from Covid-19 and customer spending cuts in response to falling oil prices, with the largest impacts felt in the U.S. onshore and offshore markets. In Africa, personnel logistics issues and reduced activity levels, also as a consequence of Covid-19, further contributed to the decline. Segment adjusted EBITDA for the second quarter of 2020 was $4.1 million, or 7% of revenue, compared to $13.3 million, or 15% of revenue, for the first quarter of 2020 and $25.4 million, or 24% of revenue, for the second quarter of 2019. The adjusted EBITDA deterioration is related to the revenue declines experienced due to current market conditions, especially in U.S. onshore and offshore markets as well as in Africa. Tubulars Tubulars revenue for the second quarter of 2020 was $8.7 million, compared to $12.5 million for the first quarter of 2020, and $22.3 million for the second quarter of 2019. The sequential decrease was the result of lower demand for the Company's tubular products in light of reduced drilling program activity. Segment adjusted EBITDA for the second quarter of 2020 was $0.7 million, or 8% of revenue, compared to $1.4 million, or 11% of revenue, for the first quarter of 2020 and $3.9 million, or 18% of revenue for the second quarter of 2019. The sequential decrease was driven by lower revenue levels. Cementing Equipment Cementing Equipment revenue was $15.0 million in the second quarter of 2020, compared to $21.5 million in the first quarter of 2020 and $26.7 million for the second quarter of 2019. The sequential decline was driven by significantly reduced customer activity in the U.S. onshore and offshore market. The year-over-year decline is primarily related to the decline in the U.S. onshore market which began during the second half of 2019. Segment adjusted EBITDA for the second quarter of 2020 was $0.9 million, or 6% of revenue, compared to $2.5 million, or 12% of revenue, for the first quarter of 2020 and $3.0 million, or 11% of revenue, for the second quarter of 2019. Lower adjusted EBITDA was driven by revenue declines brought about by market contractions in North and South America. Profit Improvement Actions Update As an update to the progress made in reducing the cost base of the Company, Frank's now anticipates realizing reductions to its cost structure of at least 25% year over year including both operational and support costs. The cost reductions achieved specific to Company support costs are now estimated to yield savings in excess of $50 million in 2020. Compensation cost estimates are expected to be reduced by 30% year over year. The Company intends to continue pursuing additional efficiencies in the coming quarters that are expected to result in further savings. Other Financial Information Cash expenditures related to property, plant and equipment and intangibles were $10.3 million for the second quarter of 2020, with the significant majority of this spend related to in-flight capital projects approved and initiated during 2019. The Company estimates total capital expenditures for the full year 2020 to range between $25.0 million and $30.0 million. As of June 30, 2020, the Company's consolidated cash and cash equivalents were $192.9 million compared to $170.9 million as of the prior quarter, an improvement of $22 million. The Company had no outstanding debt as of June 30, 2020 nor as of the prior quarter. Total liquidity at June 30, 2020 was $218 million, including cash and cash equivalents, and $25 million available under the Company's Credit Facility. For the second quarter of 2020, the Company generated operating cash flow of $26.4 million and free cash flow of $16.1 million. This was produced from both improved customer collections in the quarter and benefits of cost reductions. Income tax expense for the quarter was $9.0 million compared to an income tax benefit in the first quarter of $15.6 million largely attributable to credits resulting from governmental and regulatory support programs. The financial measures provided that are not presented in accordance with U.S. generally accepted accounting principles ("GAAP") are defined and reconciled to their most directly comparable GAAP measures. Please see "Use of Non-GAAP Financial Measures" and the reconciliations to the nearest comparable GAAP measures. Conference Call The Company will host a conference call to discuss second quarter 2020 results on Tuesday, August 4, 2020 at 10:00 a.m. Central Time (11:00 a.m. Eastern Time). Participants may join the conference call by dialing (800) 708-4540 or (847) 619-6397. The conference call ID number is 49849977. To listen via live webcast, please visit the Investor Relations section of the Company's website, www.franksinternational.com. A presentation will also be posted on the Company's website prior to the conference call. An audio replay of the conference call will be available in the Investor Relations section of the Company's website approximately two hours after the conclusion of the call and remain available for a period of approximately 90 days. About Frank's International Frank's International N.V. is a global oil services company that provides a broad and comprehensive range of highly engineered tubular running services, tubular fabrication, and specialty well construction and well intervention solutions with a focus on complex and technically demanding wells. Founded in 1938, Frank's has approximately 2,700 employees and provides services to leading exploration and production companies in both onshore and offshore environments in approximately 50 countries on six continents. The Company's common stock is traded on the NYSE under the symbol "FI." Additional information is available on the Company's website, www.franksinternational.com. Contact: Melissa [email protected] Forward Looking Statements This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this press release specifically include statements, estimates and projections regarding the Company's future business strategy and prospects for growth, cash flows and liquidity, financial strategy, budget, projections and operating results, the amount, nature and timing of capital expenditures, the availability and terms of capital, the level of activity in the oil and gas industry, volatility of oil and gas prices, unique risks associated with offshore operations, political, economic and regulatory uncertainties in international operations, the ability to develop new technologies and products, the ability to protect intellectual property rights, the ability to employ and retain skilled and qualified workers, the level of competition in the Company's industry, global or national health concerns, including health epidemics, including Covid-19, the continuation of a swift and material decline in global crude oil demand and crude oil prices for an uncertain period of time, the length of time it will take for the United States and the rest of the world to slow the spread of the Covid-19 virus to the point where applicable authorities are comfortable easing current restrictions on various commercial and economic activities, future actions of foreign oil producers such as Saudi Arabia and Russia and the risk that they take actions that will prolong or exacerbate the current over-supply of crude oil, the timing, pace and extent of an economic recovery in the United States and elsewhere, the impact of current and future laws, rulings, governmental regulations, accounting standards and statements, and related interpretations, and other guidance. These statements are based on certain assumptions made by the Company based on management's experience, expectations and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Forward-looking statements are not guarantees of performance. Although the Company believes the expectations reflected in its forward-looking statements are reasonable and are based on reasonable assumptions, no assurance can be given that these assumptions are accurate or that any of these expectations will be achieved (in full or at all) or will prove to have been correct. Moreover, such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. These include the factors discussed or referenced in the "Risk Factors" section of the Company's Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC and the additional factors discussed or referenced in the "Risk Factors" section of the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 that will be filed with the SEC. Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law, and we caution you not to rely on them unduly. Use of Non-GAAP Financial Measures This press release and the accompanying schedules include the non-GAAP financial measures of adjusted net loss, adjusted net loss per diluted share, free cash flow, adjusted EBITDA and adjusted EBITDA margin, which may be used periodically by management when discussing the Company's financial results with investors and analysts. The accompanying schedules of this press release provide a reconciliation of these non-GAAP financial measures to their most directly comparable financial measure calculated and presented in accordance with GAAP. Adjusted net loss, adjusted net loss per diluted share, free cash flow, adjusted EBITDA and adjusted EBITDA margin are presented because management believes these metrics provide additional information relative to the performance of the Company's business. These metrics are commonly employed by financial analysts and investors to evaluate the operating and financial performance of the Company from period to period and to compare it with the performance of other publicly traded companies within the industry. You should not consider adjusted net loss, adjusted net loss per diluted share, free cash flow, adjusted EBITDA and adjusted EBITDA margin in isolation or as a substitute for analysis of the Company's results as reported under GAAP. Because adjusted net loss, adjusted net loss per diluted share, free cash flow, adjusted EBITDA and adjusted EBITDA margin may be defined differently by other companies in the Company's industry, the Company's presentation of these non-GAAP financial measures may not be comparable to similarly titled measures of other companies, thereby diminishing their utility. The Company defines adjusted net loss as net loss before goodwill impairment and severance and other charges, net, net of tax. The Company defines adjusted net loss per share as net loss before goodwill impairment and severance and other charges, net, net of tax, divided by diluted weighted average common shares. The Company defines free cash flow as net cash provided by (used in) operating activities less purchases of property, plant and equipment and intangibles. The Company defines adjusted EBITDA as net income (loss) before interest income, net, depreciation and amortization, income tax benefit or expense, asset impairments, gain or loss on disposal of assets, foreign currency gain or loss, equity-based compensation, the effects of the tax receivable agreement, unrealized and realized gains or losses and other non-cash adjustments and other charges or credits. The Company uses adjusted EBITDA to assess its financial performance because it allows the Company to compare its operating performance on a consistent basis across periods by removing the effects of its capital structure (such as varying levels of interest expense), asset base (such as depreciation and amortization), income tax, foreign currency exchange rates and other charges and credits. The Company defines adjusted EBITDA margin as adjusted EBITDA divided by total revenue. Please see the accompanying financial tables for a reconciliation of these non-GAAP measures to their most directly comparable GAAP measures.

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Mitcham Industries Completes Reincorporation and Rebranding to MIND Technology

Mitcham Industries Completes Reincorporation and Rebranding to MIND Technology THE WOODLANDS, Texas, Aug. 4, 2020 /PRNewswire/ -- MIND Technology, Inc. (NASDAQ: MIND) ("MIND" or the "Company"), formerly Mitcham Industries, Inc., today announced that it has completed the reincorporation of the Company from the State of Texas to the State of Delaware, including a name change to MIND Technology, Inc., and the rebranding of the Company's operations to MIND Technology. The change in legal domicile and rebranding were approved by the affirmative vote of the holders of more than two-thirds of the votes entitled to be cast by holders of the Company's common stock and 9.00% Series A Cumulative Preferred Stock (the "Preferred Stock"), voting separately, at the Annual Meeting of Shareholders held on July 27, 2020. Pursuant to the terms of the reincorporation merger, each outstanding share of common stock and Preferred Stock in Mitcham Industries, Inc., the Texas corporation, has automatically converted into one share of common stock and Preferred Stock in MIND Technology, Inc., the Delaware corporation. Stockholders who hold physical stock certificates are not required to, but may, exchange stock certificates as a result of the reincorporation. The Company's common stock and Preferred Stock will continue to trade on the NASDAQ Global Select Market under their current ticker symbols, "MIND" and "MINDP", respectively. MIND Technology's common stock has been assigned a new CUSIP number of 602566 101 and its Preferred Stock has been assigned a new CUSIP number of 602566 200. No changes have been made to the Board of Directors, management, business or operations of the Company as a result of the reincorporation. The corporate headquarters will remain in Texas. Rob Capps, MIND's Co-Chief Executive Officer, stated, "We see this as a key step and inflection point in the expansion of our role to provide leading technology and solutions to the marine industry. We believe MIND will become known as the 'go-to' supplier for challenging exploration, survey and defense applications. Our Klein and Seamap brands are, and will remain, the 'gold standard' in their respective markets. The steps we have just completed are not an end to themselves, but in our opinion set the stage for the further growth and development that we envision in the coming months and years. "In addition, in recognition of our focus on our marine technology products business, as well as recent changes in the global energy markets, we have now made the decision to exit the seismic land leasing business completely. We will seek to sell or otherwise dispose of those operations or the related assets and expect this process to be completed within the next 12 months," concluded Capps. About MIND Technology MIND Technology, Inc. provides technology and solutions for exploration, survey and defense applications in oceanographic, hydrographic, defense, seismic and security industries. Headquartered in The Woodlands, Texas, MIND Technology has a global presence with key operating locations in the United States, Singapore, Malaysia and the United Kingdom. Its Klein and Seamap units design, manufacture and sell specialized, high performance sonar and seismic equipment. Forward-looking Statements Certain statements and information in this press release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release other than statements of historical fact, including statements regarding our future results of operations and financial position, our business strategy and plans, and our objectives for future operations, are forward-looking statements. The words "believe," "expect," "anticipate," "plan," "intend," "should," "would," "could" or other similar expressions are intended to identify forward-looking statements, which are generally not historical in nature. These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effect on us. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate. All comments concerning our expectations for future revenues and operating results are based on our forecasts of our existing operations and do not include the potential impact of any future acquisitions or dispositions. Our forward-looking statements involve significant risks and uncertainties (some of which are beyond our control) and assumptions that could cause actual results to differ materially from our historical experience and our present expectations or projections. These risks and uncertainties include, without limitation, reductions in our customers' capital budgets, our own capital budget, limitations on the availability of capital or higher costs of capital, volatility in commodity prices for oil and natural gas and the extent of disruptions caused by the COVID-19 outbreak. For additional information regarding known material factors that could cause our actual results to differ from our projected results, please see our filings with the SEC, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, unless required by law, whether as a result of new information, future events or otherwise. All forward-looking statements included in this press release are expressly qualified in their entirety by the cautionary statements contained or referred to herein. Contacts: Rob Capps, Co-CEO MIND Technology, Inc. 936-291-2277 Ken Dennard / Zach Vaughan Dennard Lascar Investor Relations 713-529-6600 [email protected] View original content:http://www.prnewswire.com/news-releases/mitcham-industries-completes-reincorporation-and-rebranding-to-mind-technology-301105189.html SOURCE MIND Technology, Inc.

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USA Compression Partners, LP Reports Second Quarter 2020 Results; Updates 2020 Outlook

USA Compression Partners, LP Reports Second Quarter 2020 Results; Updates 2020 Outlook AUSTIN, Texas, Aug. 04 /BusinessWire/ -- USA Compression Partners, LP (NYSE:USAC) ("USA Compression" or the "Partnership") announced today its financial and operating results for the second quarter 2020. Second Quarter 2020 Highlights Total revenues were $168.7 million for the second quarter 2020, compared to $173.7 million for the second quarter 2019. Net income was $2.7 million for the second quarter 2020, compared to $9.9 million for the second quarter 2019. Net cash provided by operating activities was $97.4 million for the second quarter 2020, compared to $99.8 million for the second quarter 2019. Adjusted EBITDA was $105.5 million for the second quarter 2020, compared to $104.7 million for the second quarter 2019. Distributable Cash Flow was $58.7 million for the second quarter 2020, compared to $54.1 million for the second quarter 2019. Announced cash distribution of $0.525 per common unit for the second quarter 2020, consistent with the second quarter 2019. Distributable Cash Flow Coverage was 1.15x for the second quarter 2020, compared to 1.14x for the second quarter 2019. "USA Compression reported a solid second quarter, driven by the stability of our large horsepower business model, a strong customer base and the benefits of certain cost saving and capital spending decisions taken at the end of the first quarter," commented Eric D. Long, USA Compression's President and Chief Executive Officer. "Business activity, while reduced from earlier in the year and the recent past, continues to reflect the resiliency of natural gas demand in this country. Based on what we are hearing from our customers, we are optimistic that as the remainder of the year plays out, we will see relative stability going forward and potentially some pickup towards the end of 2020." He continued, "We continue to manage through extraordinary times in the energy industry. While we are seeing general business activity picking up as different areas of the country open back up from pandemic-related lockdowns, the general consensus seems to be that things didn't get as bad as many had feared. During the past quarter, we worked with our customers, as we have in previous times of market weakness, to serve as a flexible service provider for their compression requirements. Our current expectations are for the third quarter to represent the low point of this cycle, and we are focused on managing through that period and positioning USA Compression for future quarters." "The long-term future for natural gas demand in this country continues to be favorable, and our services fit right in the middle of that dynamic. As some producing areas start to see declines in natural gas volumes, especially in associated gas regions, we expect other areas will make up for any decreases, all in an effort to provide balance to the supply / demand equation. As we noted in past down cycles when gas production comes back online without supportive drilling activity, additional compression services are generally needed to maintain natural gas delivery capability as reservoir pressures decline. This and other factors are the basis for expected improvement for compression services as we look toward 2021. We will continue to be prudent in our capital spending, and look for ways to use our existing fleet of assets to serve customer needs." Expansion capital expenditures were $22.8 million, maintenance capital expenditures were $4.4 million and cash interest expense, net was $29.9 million for the second quarter 2020. On July 21, 2020, the Partnership announced a second quarter cash distribution of $0.525 per common unit, which corresponds to an annualized distribution rate of $2.10 per common unit. The distribution will be paid on August 10, 2020 to common unitholders of record as of the close of business on July 31, 2020. For the second quarter 2020, the Partnership's Distributable Cash Flow Coverage was 1.15x. Operational and Financial Data ________________________ Liquidity and Long-Term Debt As of June 30, 2020, the Partnership was in compliance with all covenants under its $1.6 billion revolving credit facility. As of June 30, 2020, the Partnership had outstanding borrowings under the revolving credit facility of $447.8 million, $1.2 billion of borrowing base availability and, subject to compliance with the applicable financial covenants, available borrowing capacity of $151.1 million. As of June 30, 2020, the outstanding aggregate principal amount of the Partnership's 6.875% senior notes due 2026 and 6.875% senior notes due 2027 was $725.0 million and $750.0 million, respectively. Full-Year 2020 Outlook USA Compression is updating its full-year 2020 guidance as follows: Net loss range of $600.0 million to $580.0 million; A forward-looking estimate of net cash provided by operating activities is not provided because the items necessary to estimate net cash provided by operating activities, in particular the change in operating assets and liabilities, are not accessible or estimable at this time. The Partnership does not anticipate the changes in operating assets and liabilities to be material, but changes in accounts receivable, accounts payable, accrued liabilities and deferred revenue could be significant, such that the amount of net cash provided by operating activities would vary substantially from the amount of projected Adjusted EBITDA and Distributable Cash Flow; Adjusted EBITDA range of $395.0 million to $415.0 million; and Distributable Cash Flow range of $195.0 million to $215.0 million. Conference Call The Partnership will host a conference call today beginning at 11:00 a.m. Eastern Time (10:00 a.m. Central Time) to discuss second quarter 2020 performance. The call will be broadcast live over the Internet. Investors may participate either by phone or audio webcast. About USA Compression Partners, LP USA Compression Partners, LP is a growth-oriented Delaware limited partnership that is one of the nation's largest independent providers of natural gas compression services in terms of total compression fleet horsepower. USA Compression partners with a broad customer base composed of producers, processors, gatherers and transporters of natural gas and crude oil. USA Compression focuses on providing natural gas compression services to infrastructure applications primarily in high-volume gathering systems, processing facilities and transportation applications. More information is available at usacompression.com. Non-GAAP Financial Measures This news release includes the Non-GAAP financial measures of Adjusted gross margin, Adjusted EBITDA, Distributable Cash Flow and Distributable Cash Flow Coverage Ratio. Adjusted gross margin is defined as revenue less cost of operations, exclusive of depreciation and amortization expense. Management believes that Adjusted gross margin is useful as a supplemental measure to investors of the Partnership's operating profitability. Adjusted gross margin is impacted primarily by the pricing trends for service operations and cost of operations, including labor rates for service technicians, volume and per unit costs for lubricant oils, quantity and pricing of routine preventative maintenance on compression units and property tax rates on compression units. Adjusted gross margin should not be considered an alternative to, or more meaningful than, gross margin, its most directly comparable GAAP financial measure, or any other measure of financial performance presented in accordance with GAAP. Moreover, Adjusted gross margin as presented may not be comparable to similarly titled measures of other companies. Because the Partnership capitalizes assets, depreciation and amortization of equipment is a necessary element of its costs. To compensate for the limitations of Adjusted gross margin as a measure of the Partnership's performance, management believes that it is important to consider gross margin determined under GAAP, as well as Adjusted gross margin, to evaluate the Partnership's operating profitability. Management views Adjusted EBITDA as one of its primary tools for evaluating the Partnership's results of operations, and the Partnership tracks this item on a monthly basis both as an absolute amount and as a percentage of revenue compared to the prior month, year-to-date, prior year and budget. The Partnership defines EBITDA as net income (loss) before net interest expense, depreciation and amortization expense, and income tax expense. The Partnership defines Adjusted EBITDA as EBITDA plus impairment of compression equipment, impairment of goodwill, interest income on capital lease, unit-based compensation expense (income), severance charges, certain transaction fees, loss (gain) on disposition of assets and other. Adjusted EBITDA is used as a supplemental financial measure by management and external users of its financial statements, such as investors and commercial banks, to assess: the financial performance of the Partnership's assets without regard to the impact of financing methods, capital structure or historical cost basis of the Partnership's assets; the viability of capital expenditure projects and the overall rates of return on alternative investment opportunities; the ability of the Partnership's assets to generate cash sufficient to make debt payments and pay distributions; and the Partnership's operating performance as compared to those of other companies in its industry without regard to the impact of financing methods and capital structure. Management believes that Adjusted EBITDA provides useful information to investors because, when viewed with GAAP results and the accompanying reconciliations, it provides a more complete understanding of the Partnership's performance than GAAP results alone. Management also believes that external users of its financial statements benefit from having access to the same financial measures that management uses in evaluating the results of the Partnership's business. Adjusted EBITDA should not be considered an alternative to, or more meaningful than, net income (loss), operating income (loss), cash flows from operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP as measures of operating performance and liquidity. Moreover, Adjusted EBITDA as presented may not be comparable to similarly titled measures of other companies. Distributable Cash Flow is defined as net income (loss) plus non-cash interest expense, non-cash income tax expense, depreciation and amortization expense, unit-based compensation expense (income), impairment of compression equipment, impairment of goodwill, certain transaction fees, severance charges, loss (gain) on disposition of assets, proceeds from insurance recovery and other, less distributions on the Partnership's Series A Preferred Units ("Preferred Units") and maintenance capital expenditures. Distributable Cash Flow should not be considered as an alternative to, or more meaningful than, net income (loss), operating income (loss), cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP as measures of operating performance and liquidity. Moreover, the Partnership's Distributable Cash Flow as presented may not be comparable to similarly titled measures of other companies. Management believes Distributable Cash Flow is an important measure of operating performance because it allows management, investors and others to compare basic cash flows the Partnership generates (after distributions on the Partnership's Preferred Units but prior to any retained cash reserves established by the Partnership's general partner and the effect of the Distribution Reinvestment Plan) to the cash distributions the Partnership expects to pay its common unitholders. Distributable Cash Flow Coverage Ratio is defined as Distributable Cash Flow divided by distributions declared to common unitholders in respect of such period. Management believes Distributable Cash Flow Coverage Ratio is an important measure of operating performance because it allows management, investors and others to gauge the Partnership's ability to pay distributions to common unitholders using the cash flows the Partnership generates. The Partnership's Distributable Cash Flow Coverage Ratio as presented may not be comparable to similarly titled measures of other companies. This news release also contains a forward-looking estimate of Adjusted EBITDA and Distributable Cash Flow projected to be generated by the Partnership in its 2020 fiscal year. A forward-looking estimate of net cash provided by operating activities and reconciliations of the forward-looking estimates of Adjusted EBITDA and Distributable Cash Flow to net cash provided by operating activities are not provided because the items necessary to estimate net cash provided by operating activities, in particular the change in operating assets and liabilities, are not accessible or estimable at this time. The Partnership does not anticipate the changes in operating assets and liabilities to be material, but changes in accounts receivable, accounts payable, accrued liabilities and deferred revenue could be significant, such that the amount of net cash provided by operating activities would vary substantially from the amount of projected Adjusted EBITDA and Distributable Cash Flow. See "Reconciliation of Non-GAAP Financial Measures" for Adjusted gross margin reconciled to gross margin, Adjusted EBITDA reconciled to net income (loss) and net cash provided by operating activities, and net income (loss) and net cash provided by operating activities reconciled to Distributable Cash Flow and Distributable Cash Flow Coverage Ratio. Forward-Looking Statements Some of the information in this news release may contain forward-looking statements. These statements can be identified by the use of forward-looking terminology including "may," "believe," "expect," "intend," "anticipate," "estimate," "continue," "if," "project," "outlook," "will," "could," "should," or other similar words or the negatives thereof, and include the Partnership's expectation of future performance contained herein, including as described under "Full-Year 2020 Outlook." These statements discuss future expectations, contain projections of results of operations or of financial condition, or state other "forward-looking" information. You are cautioned not to place undue reliance on any forward-looking statements, which can be affected by assumptions used or by known risks or uncertainties. Consequently, no forward-looking statements can be guaranteed. When considering these forward-looking statements, you should keep in mind the risk factors noted below and other cautionary statements in this news release. The risk factors and other factors noted throughout this news release could cause actual results to differ materially from those contained in any forward-looking statement. Known material factors that could cause the Partnership's actual results to differ materially from the results contemplated by such forward-looking statements include: changes in the long-term supply of and demand for crude oil and natural gas, including as a result of uncertainty regarding the length of time it will take for the United States and the rest of the world to slow the spread of COVID-19 to the point where applicable authorities are comfortable continuing to ease, or declining to reinstate certain restrictions on various commercial and economic activities; such restrictions are designed to protect public health but also have the effect of significantly reducing demand for crude oil and natural gas; the severity and duration of world health events, including the recent COVID-19 outbreak, related economic repercussions, actions taken by governmental authorities and other third parties in response to the pandemic and the resulting severe disruption in the oil and gas industry and negative impact on demand for oil and gas, which continues to negatively impact our business; changes in general economic conditions and changes in economic conditions of the crude oil and natural gas industries specifically, including the ability of members of the Organization of the Petroleum Exporting Countries ("OPEC") and Russia (together with OPEC and other allied producing countries, "OPEC+") to agree on and comply with supply limitations; uncertainty regarding the timing, pace and extent of an economic recovery in the United States and elsewhere, which in turn will likely affect demand for crude oil and natural gas and therefore the demand for the compression and treating services we provide and the commercial opportunities available to us; the deterioration of the financial condition of our customers, which may result in the initiation of bankruptcy proceedings with respect to customers; renegotiation of material terms of customer contracts no longer in primary term; competitive conditions in our industry; our ability to realize the anticipated benefits of acquisitions; actions taken by our customers, competitors and third-party operators; changes in the availability and cost of capital; operating hazards, natural disasters, epidemics, pandemics (such as COVID-19), weather-related delays, casualty losses and other matters beyond our control; operational challenges relating to the COVID-19 pandemic and efforts to mitigate the spread of the virus, including logistical challenges, protecting the health and well-being of our employees, remote work arrangements, performance of contracts and supply chain disruptions; the effects of existing and future laws and governmental regulations; the effects of future litigation; factors described in Part I, Item 1A ("Risk Factors") of the Partnership's Annual Report on Form 10-K for the fiscal year ended December 31, 2019, which was filed with the Securities and Exchange Commission (the "SEC") on February 18, 2020, Part II Item 1A ("Risk Factors") of the Partnership's Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, which was filed with the SEC on May 5, 2020, and subsequently filed reports; and other factors discussed in the Partnership's filings with the SEC. All forward-looking statements speak only as of the date of this news release and are expressly qualified in their entirety by the foregoing cautionary statements. Unless legally required, the Partnership undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Unpredictable or unknown factors not discussed herein also could have material adverse effects on forward-looking statements. ________________________ ________________________ ________________________ View source version on businesswire.com: https://www.businesswire.com/news/home/20200804005299/en/   back

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Crestwood Announces Second Quarter 2020 Financial and Operating Results

Crestwood Announces Second Quarter 2020 Financial and Operating Results Second quarter 2020 results exceeded revised expectations delivering a net loss of $24.3 million, Adjusted EBITDA of $127.8 million, a 5% year-over-year increase, and Distributable Cash Flow of $74.4 million, a 15% year-over-year increaseG&P volumes outperformed base case forecast and MS&L segment benefitted from recently acquired NGL assets, positioning Crestwood to maintain its distribution for the second quarter and remain on-track to achieve full-year Adjusted EBITDA within the revised guidance range Better than forecasted cash flow contributions combined with significantly reduced capital expenditures position Crestwood to begin generating substantial free cash flow going forward and further enhances Crestwood's solid financial position currently highlighted by approximately 4.2x leverage, more than $400 million in liquidity and no near-term maturities until 2023 HOUSTON, Aug. 04 /BusinessWire/ -- Crestwood Equity Partners LP (NYSE:CEQP) ("Crestwood") today reported its financial and operating results for the three months ended June 30, 2020. Second Quarter 2020 Highlights (1) Second quarter 2020 net loss of $24.3 million, compared to net income of $225.0 million in second quarter 2019 Second quarter 2020 Adjusted EBITDA of $127.8 million, an increase of 5% compared to $121.3 million in the second quarter 2019 Second quarter 2020 distributable cash flow to common unitholders of $74.4 million; Second quarter 2020 coverage ratio was 1.6x Ended June 30, 2020 with approximately $2.6 billion in total debt and a 4.2x leverage ratio; Crestwood had $801 million drawn under its $1.25 billion revolver as of June 30, 2020 Announced second quarter 2020 cash distribution of $0.625 per common unit, or $2.50 per common unit on an annualized basis, payable on August 14, 2020, to unitholders of record as of August 7, 2020 Management Commentary "Despite the unprecedented volatility and uncertainty faced by the energy industry during the first half of the year, I am very pleased with the resiliency of our diversified midstream portfolio in the second quarter generating Adjusted EBITDA of $127.8 million and Distributable Cash Flow of $74.4 million. Importantly, even in an extremely challenging quarter, both cash flow metrics were improved year-over-year and were well-above consensus estimates, driving robust leverage and coverage metrics of 4.2x and 1.6x, respectively, reflecting the current financial health of our partnership," said Robert G. Phillips, Chairman, President and Chief Executive Officer of Crestwood's general partner. "Our stronger than expected second quarter results were driven by improving oil demand, commodity prices and access to market that allowed our Bakken and Delaware Basin producers to swiftly restart shut-in production. Additionally, impressive contributions came from our crude oil storage and terminal assets at COLT, Dry Fork and Arrow, which enabled us to assist our Bakken producers during the market disruption this quarter. Finally, our recently acquired NGL storage and terminal assets were quickly integrated and made a timely contribution to stronger than normal second quarter performance by our MS&L segment." Mr. Phillips continued, "Looking to the second half of 2020, we have increasing confidence in our ability to deliver the mid-to-upper range of our revised annual guidance based on several factors including lower shut-in production on our oil-weighted systems, the resumption of completion activities of the DUC inventory on the Bakken Arrow system, and higher operating margins across our portfolio due to significantly reduced O&M and G&A costs. Moreover, while we are currently dealing with uncertainty regarding both the DAPL pipeline in the Bakken and the bankruptcy of Chesapeake Energy, primarily affecting our Powder River Basin and Marcellus assets, we do not expect these situations to be long-term impediments to meeting our future expectations. With respect to DAPL, Crestwood is taking aggressive steps to mitigate the impact of a potential DAPL shut-in by enhancing our other Arrow downstream connections and offering increased COLT availability for our Arrow producers. On Chesapeake, our G&P contracts in the Powder River Basin are not currently subject to the bankruptcy proceeding and are market-based and competitive with third parties in the region. Chesapeake is current on all payables and we continue to provide critical midstream services in the Powder River Basin and Marcellus. Chesapeake production volumes are currently running at reduced levels in the Powder River Basin due to current lower net-back prices but are at near-record production levels in the Marcellus through our Stagecoach assets. As we work through the challenges 2020 presents, our conservative financial strategy will continue to focus on liquidity and balance sheet strength to provide flexibility in a volatile market, and we will continue to navigate the company through this down cycle to drive increased value for our unitholders, including generating free cash flow after capital expenditures and distributions beginning in the third quarter." Second Quarter 2020 Segment Results and Outlook Gathering and Processing segment EBITDA totaled $87.2 million in the second quarter 2020 compared to $88.8 million in the second quarter 2019. Second quarter 2019 results exclude a $209.4 million non-cash gain related to the Jackalope acquisition in April 2019, and both periods exclude losses on long lived assets. During the second quarter 2020, segment EBITDA benefitted from a 148% increase in Bakken processing volumes as a result of the in-service of the Bear Den II processing plant in August 2019, a 14% increase in both Bakken natural gas gathering and water gathering volumes, and a 14% increase in Delaware gas gathering volumes over second quarter 2019, despite production curtailments across oil-weighted basins. These production curtailments were primarily experienced across the Bakken, Powder River Basin and Delaware Basin during the months of May and June as a result of lower commodity prices during the first half of the quarter driven by reduced hydrocarbon demand and limitations on physical storage capacity. As market conditions improved during the second half of the quarter and led to improved commodity prices, producers were able to return shut-in production quickly and efficiently resulting in production volumes exceeding Crestwood's base case forecast. Looking to the second half of 2020, Crestwood anticipates oil-weighted volumes to be fully back online and new completion activity on the Arrow system beginning in the third quarter 2020. Storage and Transportation segment EBITDA totaled $14.1 million in the second quarter 2020 compared to $13.7 million in the second quarter 2019. Second quarter 2020 natural gas storage and transportation volumes averaged 2.1 Bcf/d, compared to 2.0 Bcf/d in the second quarter 2019. At the Stagecoach Gas Services joint venture with Consolidated Edison, Crestwood continues to see stable transportation volumes driven by the strategic nature of 41 Bcf of underground natural gas working storage capacity supporting integral Northeast and mid-Atlantic markets. In the second quarter, the COLT Hub experienced a decline in rail loading volumes as a result of decreased production across the basin, which was offset by increased demand for crude storage capacity and contango pricing for crude oil. For the second half of 2020, Crestwood expects COLT Hub rail loading volumes to increase as curtailed production volumes in the basin continue to come back online and more producers begin to utilize crude-by-rail to diversify takeaway access out of the basin. Marketing, Supply and Logistics (MS&L) segment EBITDA totaled $23.8 million in the second quarter 2020, compared to $16.4 million in the second quarter 2019. Both periods exclude the non-cash change in fair value of commodity inventory-related derivative contracts. During the second quarter 2020, Crestwood's NGL logistics business was able to take advantage of decreased NGL prices during the quarter to build NGL inventories and optimize its newly acquired storage assets to generate margin opportunities. In addition, similar to the NGL business, Crestwood's crude marketing operations were able to utilize storage capacity to take advantage of the contango market and provide a market for stranded barrels. In the current environment, Crestwood expects to be able to optimize its expanded downstream marketing and storage assets as a result of on-going price volatility for crude, gas and NGLs during the pandemic. Expenses Combined O&M and G&A expenses, net of non-cash unit-based compensation, in the second quarter 2020 were $47.5 million compared to $45.7 million in the second quarter 2019. Early in the second quarter, Crestwood responded to the low-price environment by proactively reducing its O&M and G&A expenses primarily through a reduction in headcount and increased efficiencies across the company, and incurred approximately $8 million of severance and other costs to achieve those reductions. Crestwood expects these reductions will be fully reflected in its third quarter 2020 results and total approximately $40 million on an annual run-rate basis. Second Quarter 2020 Business Update Bakken Update During the second quarter 2020, the Arrow system averaged crude oil gathering volumes of 87 MBbls/d, natural gas gathering volumes of 90 MMcf/d, natural gas processing volumes of 86 MMcf/d, and water gathering volumes of 73 MBbls/d. Processing volumes increased 148% over second quarter 2019 as a result of the in-service of the 120 MMcf/d Bear Den II processing plant in August 2019. Second quarter 2020 average volumes exceeded initial forecasts estimated by Arrow producers and significantly exceeded Crestwood's revised guidance issued in May 2020, which assumed 50% of volumes on the system would be shut-in through July 2020. Currently, approximately 90% of estimated available Arrow production is flowing and based on current producer plans, Crestwood expects the Arrow system to return to 100% flow rates during the third quarter 2020. In the second quarter 2020, Crestwood invested $16 million in the Bakken primarily for optimizations and improvements for the Arrow water gathering system. In late July, Crestwood's key producers resumed completion activity on their DUC inventory and began connecting new wells to the Arrow system which will provide incremental volumes for the second half of 2020 and early 2021. Currently, approximately 20% of the active rigs in the Bakken are operating on the Fort Berthold Indian Reservation which drives Crestwood's full year 2020 three-product well connect estimate of 60 - 70 to the Arrow system. As producers reimburse Crestwood for the majority of well connect capital, the company expects the minimal remaining 2020 capital investment to be focused on optimization projects to support producer water volumes. DAPL Commentary As previously announced, the status of the Dakota Access Pipeline ("DAPL") temporary shutdown is uncertain at this time. As a result, Crestwood has been working with its Arrow customers to ensure all crude oil gathered on the Arrow system will have downstream market access. The Arrow gathering system currently connects to the DAPL, Hiland and Tesoro pipelines and is close to another long-haul takeaway pipeline to which the company is working to connect. Additionally, Crestwood can transport Arrow crude oil to COLT by pipeline or truck with total connectivity of approximately 200,000 barrels per day. In the event operations on DAPL are temporarily suspended, crude-by-rail facilities in the Bakken will become increasingly valuable and relevant as an alternative takeaway option. Crestwood's COLT Hub facility is the leading crude oil terminal in the Bakken with multiple pipeline connections, storage capacity of 1.2 MMBbls and rail loading capacity of 160,000 barrels of crude oil per day. Historically, the COLT Hub, located on the BNSF rail line, has been a premier Bakken supply and aggregation source for marketers and refiners in the East and West coast markets, making it a natural supply aggregation point to clear barrels out of the Bakken markets. Powder River Basin Update During the second quarter 2020, the Jackalope system averaged gathering volumes of 91 MMcf/d and processing volumes of 87 MMcf/d. Volumes in the second quarter 2020 were affected by Jackalope's anchor customer, Chesapeake Energy ("Chesapeake") (OTC:CHKAQ), shutting-in a portion of its wells due to the depressed commodity price environment. Based on current market conditions and improving basin differentials, Crestwood expects shut-in wells to be fully brought back online by the beginning of the fourth quarter 2020 and remain on natural field decline through the balance of 2021. During the second quarter, Crestwood paid $34 million of remaining invoices related to the 200 MMcf/d Bucking Horse II processing plant project, which was completed in the first quarter 2020. Based on revised production forecasts for the basin, Crestwood is actively engaged with other producers and midstream providers in the region to consolidate volumes from older, less-efficient third party processing plants in an effort to optimize Bucking Horse spare capacity, reduce operating costs and to provide better recoveries and improved netbacks for producers in the current commodity price environment. Chesapeake Energy Update On June 28, 2020, Chesapeake voluntarily filed for bankruptcy protection under Chapter 11 of the US Bankruptcy Code. To date, the Jackalope contract has not been named as a midstream contract Chesapeake is seeking to reject in the bankruptcy process. As a reminder, the Jackalope gathering and processing contract was renegotiated in January 2017 at market rates for a 20-year term and includes acreage dedication and covenant running with the land language. Additionally, Chesapeake is current on all receivables owed to Crestwood and there are full letters of credit in place supporting current operations. Crestwood is fully committed to continuing to operate the Jackalope and Bucking Horse assets and working with Chesapeake and its advisors throughout the bankruptcy process. Delaware Basin Update During the second quarter 2020, Crestwood's Delaware Basin natural gas gathering assets averaged volumes of 190 MMcf/d, a 14% increase compared to 167 MMcf/d in second quarter 2019. The increase in gathering volumes in the Delaware Basin was driven by Royal Dutch Shell's ("Shell") continued development program on the Nautilus gathering system and lower than expected shut-ins during the second quarter on the Willow Lake gathering system. There were 22 wells connected to the Nautilus system in the first half of 2020, and as of the end of July, there were three rigs running on acreage dedicated to Crestwood. In the second quarter, capital invested in the Delaware Basin went towards the completion of the previously announced produced water gathering and disposal system for a large producer customer. During the quarter, Crestwood successfully drilled a deep salt water disposal well and constructed related infrastructure that now positions Crestwood to provide a safe and reliable produced water gathering and disposal solution to producers active between the company's Willow Lake and Orla assets where produced water to oil ratios continue to exceed 8:1. Capitalization and Liquidity Update Crestwood invested approximately $50 million in consolidated growth capital projects during the second quarter 2020 which focused on the remaining invoices for the Bucking Horse II processing plant and Arrow water gathering system optimizations. With these projects now largely complete, Crestwood expects to invest minimal growth capital for the remainder of 2020 and as a result, expects to begin generating significant free cash flow beginning in the third quarter of 2020 that will be utilized to maximize liquidity and preserve balance sheet strength through the current down cycle. As of June 30, 2020, Crestwood had approximately $2.6 billion of debt outstanding, comprised of $1.8 billion of fixed-rate senior notes and $801 million outstanding under its $1.25 billion revolving credit facility, resulting in a leverage ratio of 4.2x. Based on current market conditions and forecast, Crestwood anticipates a leverage ratio between 4.25x and 4.75x for full year 2020. Crestwood has more than $400 million of liquidity under its revolving credit facility. Crestwood remains committed to achieving a leverage ratio of 4.0x or less over the next 12 to 18 months. Going forward, the company expects to use availability under the revolver and free cash flow to manage its future cash needs and will continue to evaluate opportunistic non-core asset divestitures as an incremental alternative to further accelerate the strategy of preserving balance sheet strength through this down cycle. Crestwood currently has 71.3 million preferred units outstanding (par value of $9.13 per unit) which pay a fixed-rate annual cash distribution of 9.25%, payable quarterly. The preferred units are listed on the New York Stock Exchange and trade under the ticker symbol CEQP-P. Sustainability Program Update In June 2020, Crestwood published its 2019 sustainability report entitled Embracing a Culture of Sustainability. The second annual report provides enhanced transparency on the company's environmental, social and governance (ESG) performance, and for the first time it includes multi-year trend data and analysis. Crestwood also highlights the progression on its three-year sustainability strategy as it continues to integrate sustainability into every aspect of its diversified midstream energy business. The 2019 sustainability report has been prepared in accordance with the Global Reporting Initiative (GRI) Standards - Core option and is aligned with the Sustainability Accounting Standards Board (SASB) midstream reporting framework. Following the issuance of the 2019 report, Bloomberg increased Crestwood's total company ESG ranking by 65% to a revised score of 46.7, highlighting Crestwood's commitment to enhanced disclosures on waste and air emissions data, as well the publication of its biodiversity policy. Additionally, as an organization that is always looking to deliver best in class performance, Crestwood understands diversity & inclusion is essential to succeeding in a rapidly changing industry and continues to foster a work environment founded on respect and inclusion. For more information on Crestwood's Diversity & Inclusion statement and the 2019 sustainability report please visit https://esg.crestwoodlp.com. Upcoming Conference Participation Crestwood's management intends to participate in the following upcoming virtual investor conferences. Prior to the start of each conference, new presentation materials may be posted to the Investors section of Crestwood's website at www.crestwoodlp.com. Citi One-on-One MLP/Energy Infrastructure Conference, August 12 - 13, 2020 NYSE Utilities and Midstream Investor Access Day, September 16, 2020 Earnings Conference Call Schedule Management will host a conference call for investors and analysts of Crestwood today at 9:00 a.m. Eastern Time (8:00 a.m. Central Time) which will be broadcast live over the internet. Investors will be able to connect to the webcast via the Investors page of Crestwood's website at www.crestwoodlp.com. Please log in at least 10 minutes in advance to register and download any necessary software. A replay will be available shortly after the call for 90 days. Non-GAAP Financial Measures Adjusted EBITDA and distributable cash flow are non-GAAP financial measures. The accompanying schedules of this news release provide reconciliations of these non-GAAP financial measures to their most directly comparable financial measures calculated and presented in accordance with GAAP. Our non-GAAP financial measures should not be considered as alternatives to GAAP measures such as net income or operating income, or any other GAAP measure of liquidity or financial performance. Forward-Looking Statements This news release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities and Exchange Act of 1934. The words "expects," "believes," "anticipates," "plans," "will," "shall," "estimates," and similar expressions identify forward-looking statements. Forward-looking statements are subject to risks and uncertainties and are based on the beliefs and assumptions of management, based on information currently available to them. Although Crestwood believes that these forward-looking statements are based on reasonable assumptions, it can give no assurance that any such forward-looking statements will materialize. Important factors that could cause actual results to differ materially from those expressed in or implied by these forward-looking statements include the risks and uncertainties described in Crestwood's reports filed with the Securities and Exchange Commission, including its Annual Report on Form 10-K and its subsequent reports, which are available through the SEC's EDGAR system at www.sec.gov and on our website. Readers are cautioned not to place undue reliance on forward-looking statements, which reflect management's view only as of the date made, and Crestwood assumes no obligation to update these forward-looking statements. About Crestwood Equity Partners LP Houston, Texas, based Crestwood Equity Partners LP (NYSE:CEQP) is a master limited partnership that owns and operates midstream businesses in multiple shale resource plays across the United States. Crestwood is engaged in the gathering, processing, treating, compression, storage and transportation of natural gas; storage, transportation, terminalling, and marketing of NGLs; gathering, storage, terminalling and marketing of crude oil; and gathering and disposal of produced water. Visit Crestwood Equity Partners LP at http://www.crestwoodlp.com; and to learn more about Crestwood's sustainability efforts, please visit https://esg.crestwoodlp.com. View source version on businesswire.com: https://www.businesswire.com/news/home/20200804005228/en/   back

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NuStar Energy L.P. Reports Second Quarter 2020 Earnings Results

NuStar Energy L.P. Reports Second Quarter 2020 Earnings Results Solid Results Reported Despite Challenges of Global Pandemic, Including Some Improvements Over Second Quarter 2019 ResultsSecond Quarter Storage Segment Performance ShinesPromising Recovery for Refined Product and Crude Pipeline Volumes Provides Encouraging 2020 Outlook SAN ANTONIO, Aug. 04 /BusinessWire/ -- NuStar Energy L.P. (NYSE:NS) today announced results for the three months ended June 30, 2020. "Despite the challenges of a global pandemic, a crushing economic downturn, and a historic collapse in crude oil prices, we are very pleased to have generated solid second quarter 2020 results, some of which exceeded our second quarter 2019 results, thanks to our great employees, our world-class assets and our blue-chip, quality customers," said NuStar President and CEO Brad Barron. While NuStar reported second quarter 2020 income from continuing operations of $30 million, compared to $47 million for the second quarter of 2019, NuStar also reported earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations of $162 million for the second quarter of 2020, up from $161 million from the same period in 2019. Distributable cash flow (DCF) from continuing operations was $62 million for the second quarter of 2020, compared to $83 million in the second quarter of 2019, primarily as a result of increased interest expense. And the distribution coverage ratio to common limited partners from continuing operations was 1.43 times for the current period. "To improve EBITDA during a quarter that was a low-water mark for not only U.S. refined product demand, but also U.S. refinery utilization and U.S. crude oil production, in an environment in which individuals and businesses around the world were struggling, is a true testament to the self-help actions we took over the past months and the resilience and flexibility we have built into our business over the past few years," Barron said. "In 2019, we lowered our leverage below four times, and we brought in a number of key low-multiple/high-return projects on time and under budget. In March, when faced with the global pandemic and dramatic economic downturn, we prioritized, adapted and took action to protect our employees and our stakeholders by cutting our spending to preserve cash, and we are proud to have delivered solid second quarter results during one of the most challenging quarters in the history of the U.S. energy industry. "In addition to these self-help measures, we also seized the opportunities presented by contango in the storage market during the second quarter and successfully filled 100 percent of our available storage capacity. Also, our storage segment benefitted from a full quarter's contribution from the completion of our Taft 30" pipeline, which flows into our North Beach Terminal within our Corpus Christi Crude System, which more than outweighed Covid-19-related throughput declines at certain facilities that directly support some of our customers' refineries. Our storage segment also benefited from our Mexico and West Coast expansion projects, and new storage contracts and renewals of existing contracts that all together brought online about 3 million barrels of previously idled storage capacity," Barron noted. "And, as the second quarter progressed, we saw refined product demand improve. In fact, during the second quarter alone, we moved almost 138 million barrels of crude oil and refined products through our pipelines. And we have seen additional encouraging signs of progress toward recovery in July and thus far in August as well. On average, so far this quarter, we are at about 94 percent of typical demand across our refined products system, which has improved significantly over the low of approximately 70 percent we saw in April," said Barron. "Taking all these factors into account, we continue to project that NuStar will generate full-year 2020 adjusted EBITDA of between $665 and $735 million, which is the same guidance we provided in May and is, midpoint to midpoint, less than 6% lower than our pre-pandemic guidance," Barron said. Self-help Measures to Preserve Cash and Strengthen Balance Sheet "As noted above, during the months of March through May, we acted quickly and decisively to reduce spending and preserve cash," Barron said, noting the following actions: "We improved our near-term liquidity through a significant reduction in our 2020 spending and lowered our strategic capital by over $145 million, or approximately 45 percent below levels we forecasted in early 2020; "We identified $40-$50 million of controllable and operating expense reductions for the full-year of 2020; "We also obtained a leverage-neutral term loan and reduced our distribution, both in an effort to further assure we have the liquidity to address our near-term debt maturities." Encouraging Demand Trends "As the second quarter progressed we saw refined product demand improve, which was evidenced by the following: "Our Central East system in the Midwest, which serves a rural population with healthy agricultural demand, has seen system throughputs rebound strongly from lows of 80 percent back up to about 95 percent. At the same time, the distillate market in that region has continued to hold up, as it has throughout the year; "Our ammonia pipeline, another bright spot in the Midwest, has continued to perform at near-record levels with strong agricultural demand again this year; "On our Central West system, we saw system throughputs decline to about 65 percent at its low point in April, as refinery utilization dropped to accommodate demand deterioration in Texas and surrounding states. We have seen numbers improve in recent months to close to 80 percent despite the uptick in COVID-19 cases in Texas since Memorial Day; and "In South Texas, our system throughputs, at the low point, were about 75 percent. Since that low, we have seen overall system throughputs rebound sharply to pre-pandemic levels." Barron then provided an update on NuStar's crude pipeline business. "On the crude pipeline side of our business, we continue to believe in the viability and fundamental strength of U.S. shale production, particularly in the Permian and specifically on our Permian Crude System. Prior to the pandemic, during the first quarter, our Permian system was moving an average of about 450,000 barrels per day, up about 4 percent over fourth quarter 2019. Then in May, U.S. rig counts fell, and so did production, across the U.S., in the Permian and on our system. We are encouraged that our volumes rebounded in July to 434,000 barrels per day, 21 percent above our May lows and 8 percent above our second quarter 2020 average. We are also encouraged by our August nominations of 444,000 barrels per day. In light of the quicker-than-expected recovery and our customers' drilling plans, we have raised our expected 2020 exit rate to about 401,000 barrels per day, about 8.5% higher than our projection that we provided in May. "With regard to our Corpus Christi Crude System, we are seeing some reason for optimism on exports. After seeing exports dip below minimum volume commitments in May, we have been pleased with the ramp-up we have seen in June, July and in the beginning of August in both WTI and Eagle Ford volumes." Conference Call Details A conference call with management is scheduled for 9:00 a.m. CT today, August 4, 2020. The partnership plans to discuss the second quarter 2020 earnings results, which will be released earlier that day. Investors interested in listening to the discussion may dial toll-free 844/889-7787, passcode 8774744. International callers may access the discussion by dialing 661/378-9931, passcode 8774744. The partnership intends to have a playback available following the discussion, which may be accessed by dialing toll-free 855/859-2056, passcode 8774744. International callers may access the playback by dialing 404/537-3406, passcode 8774744. The playback will be available until 12:00 p.m. CT on September 3, 2020. Investors interested in listening to the live discussion or a replay via the internet may access the discussion directly at https://edge.media-server.com/mmc/p/bqyuuamr or by logging on to NuStar Energy L.P.'s website at www.nustarenergy.com. NuStar Energy L.P., a publicly traded master limited partnership based in San Antonio, is one of the largest independent liquids terminal and pipeline operators in the nation. NuStar currently has approximately 10,000 miles of pipeline and 75 terminal and storage facilities that store and distribute crude oil, refined products and specialty liquids. The partnership's combined system has approximately 75 million barrels of storage capacity, and NuStar has operations in the United States, Canada and Mexico. For more information, visit NuStar Energy L.P.'s website at www.nustarenergy.com. Cautionary Statement Regarding Forward-Looking Statements This press release includes, and the related conference call will include, forward-looking statements regarding future events, such as the partnership's future performance, plans, capital expenditures and expense reductions. All forward-looking statements are based on the partnership's beliefs as well as assumptions made by and information currently available to the partnership. These statements reflect the partnership's current views with respect to future events and are subject to various risks, uncertainties and assumptions. These risks, uncertainties and assumptions are discussed in NuStar Energy L.P.'s 2019 annual report on Form 10-K and subsequent filings with the Securities and Exchange Commission. Actual results may differ materially from those described in the forward-looking statements. Except as required by law, the partnership does not intend to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise. NuStar Energy L.P. and Subsidiaries Consolidated Financial Information - Continued (Unaudited, Thousands of Dollars, Except Ratio Data) Note 1: NuStar Energy L.P. utilizes financial measures, such as earnings before interest, taxes, depreciation and amortization (EBITDA), distributable cash flow (DCF) and distribution coverage ratio, which are not defined in U.S. generally accepted accounting principles (GAAP). Management believes these financial measures provide useful information to investors and other external users of our financial information because (i) they provide additional information about the operating performance of the partnership's assets and the cash the business is generating, (ii) investors and other external users of our financial statements benefit from having access to the same financial measures being utilized by management and our board of directors when making financial, operational, compensation and planning decisions and (iii) they highlight the impact of significant transactions. We may also adjust these measures or calculate them based on continuing operations, to enhance the comparability of our performance across periods. Our board of directors and management use EBITDA and/or DCF when assessing the following: (i) the performance of our assets, (ii) the viability of potential projects, (iii) our ability to fund distributions, (iv) our ability to fund capital expenditures and (v) our ability to service debt. In addition, our board of directors uses EBITDA, DCF and a distribution coverage ratio, which is calculated based on DCF, as some of the factors in its compensation determinations. DCF is a widely accepted financial indicator used by the master limited partnership (MLP) investment community to compare partnership performance. DCF is used by the MLP investment community, in part, because the value of a partnership unit is partially based on its yield, and its yield is based on the cash distributions a partnership can pay its unitholders. None of these financial measures are presented as an alternative to net income, or for any periods presented reflecting discontinued operations, income from continuing operations. They should not be considered in isolation or as substitutes for a measure of performance prepared in accordance with GAAP. The following is a reconciliation of income (loss) from continuing operations to EBITDA from continuing operations, DCF from continuing operations and distribution coverage ratio from continuing operations. NuStar Energy L.P. and Subsidiaries Consolidated Financial Information - Continued (Unaudited, Thousands of Dollars, Except Ratio Data) The following is the reconciliation for the calculation of our Consolidated Debt Coverage Ratio, as defined in our revolving credit agreement (the Revolving Credit Agreement). The reconciliation of net income (loss) to EBITDA includes reconciling items from continuing and discontinued operations on a combined basis. The following is a reconciliation of net loss to EBITDA to adjusted EBITDA. View source version on businesswire.com: https://www.businesswire.com/news/home/20200804005409/en/   back

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Ecopetrol Business Group Announces Second Quarter 2020 Results and the update of its Business Plan 2020-2022

Ecopetrol Business Group Announces Second Quarter 2020 Results and the update of its Business Plan 2020-2022 BOGOTÁ, Colombia, Aug. 4, 2020 /PRNewswire/ -- Ecopetrol S.A. (BVC: ECOPETROL; NYSE: EC) announced today the Ecopetrol Group's financial results for the second quarter and the first half of 2020 and the update of the Business Plan 2020-2022. Financial results were prepared in accordance with the International Financial Reporting Standards applicable in Colombia. Table 1: Financial Summary Income Statement - Ecopetrol Group Billion (COP) 2Q2020 2Q2019 ∆ ($) ∆ (%) 6M2020 6M2019 ∆ ($) ∆ (%) Total sales 8,442 18,309 (9,867) (53.9%) 23,514 34,251 (10,737) (31.3%) Depreciation and amortization 2,236 2,052 184 9.0% 4,388 4,023 365 9.1% Variable cost 3,570 6,777 (3,207) (47.3%) 10,266 12,893 (2,627) (20.4%) Fixed cost 1,810 2,385 (575) (24.1%) 4,249 4,531 (282) (6.2%) Cost of sales 7,616 11,214 (3,598) (32.1%) 18,903 21,447 (2,544) (11.9%) Gross income 826 7,095 (6,269) (88.4%) 4,611 12,804 (8,193) (64.0%) Operating and exploratory expenses 2 1,138 (1,136) (99.8%) 1,081 1,892 (811) (42.9%) Operating income 824 5,957 (5,133) (86.2%) 3,530 10,912 (7,382) (67.7%) Financial income (loss), net (599) (391) (208) 53.2% (1,265) (776) (489) 63.0% Share of profit of companies 77 72 5 6.9% 77 233 (156) (67.0%) Income before income tax 302 5,638 (5,336) (94.6%) 2,342 10,369 (8,027) (77.4%) Income tax (3) (1,872) 1,869 (99.8%) (633) (3,546) 2,913 (82.1%) Net income consolidated 299 3,766 (3,467) (92.1%) 1,709 6,823 (5,114) (75.0%) Non-controlling interest (277) (280) 3 (1.1%) (624) (593) (31) 5.2% Net income attributable to owners of Ecopetrol before impairment 22 3,486 (3,464) (99.4%) 1,085 6,230 (5,145) (82.6%) (Expense) recovery for impairment long-term assets 4 1 3 300.0% (1,204) 2 (1,206) (60,300.0%) Deferred tax of impairment (1) 0 (1) - 277 0 277 - Net income attributable to owners of Ecopetrol 25 3,487 (3,462) (99.3%) 158 6,232 (6,074) (97.5%) EBITDA 1,996 8,307 (6,311) (76.0%) 7,253 15,665 (8,412) (53.7%) EBITDA Margin 23.6% 45.4% - (21.8%) 30.8% 45.7% - (14.9%) * Ebitda adjusted to exclude the effect of the Voluntary Retirement Plan amounts to COP 2,168 billion in 2Q20 and COP 7,425 billion in 6M20. The figures included in this report are not audited. The financial information is expressed in billions of Colombian pesos (COP), or US dollars (USD), or thousands of barrels of oil equivalent per day (mboed) or tons, as noted. For presentation purposes, certain figures in this report were rounded to the nearest decimal place. In words of Felipe Bayón Pardo, CEO of Ecopetrol: "In line with the guidance announced at the end of the first quarter, results for the second quarter reflect the impact of the unprecedented situation caused by the global spread of COVID-19. April reported the worst performance of crude prices since the beginning of the crisis. The inventory build-up and the contraction in demand as a result of the lockdown measures implemented worldwide led to a 38% decline in the Brent, compared to 2019 year-end, even with negative levels for WTI, and below USD 20 for Brent during some days. Likewise, during the second quarter, sales of our main products reported a decrease of 46%, mainly in jet fuel (-89%), gasoline (-46%) and diesel (-35%). This new reality required a rapid financial and operational adjustment that we executed decisively, while reinforcing our three strategic pillars: strict capital discipline, cash protection and cost efficiency, as well as reserve growth and profitable production. Thanks to this intervention, along with the gradual improvement in market conditions reported since mid-May, our operating and financial results, although impacted, were positive. As a result, the Ecopetrol Group reached a net income of COP 158 billion and an EBITDA of COP 7.3 trillion by the end of the first half of the year. In response to the COVID-19 health emergency, we adapted our operations prioritizing the care and safety of our employees and contractors, through strict biosafety protocols and prevention measures, both in our operation areas and for those working remotely. As part of Ecopetrol Group's commitment to the country, we continue allocating social investment resources to confront the pandemic, for a cumulative total of COP 88 billion to date, which includes: humanitarian aid, biosafety elements supply, aid for vulnerable families, provision of medical equipment to strengthen the healthcare system, in addition to our participation in the "Comparto mi Energía" program to support the payment of electricity services for low income families, the "Ayudar Nos Hace Bien" campaign which benefits the most vulnerable families, as well as initiatives in technology and innovation for medical equipment. We continued to structure the economic reactivation program, which aims to support territorial entities in the implementation of short-term projects to help promote local productive employment. As part of this initiative and to alleviate the financial crisis of our small and medium suppliers, Ecopetrol implemented advance payments or "early payments" without discount for nearly COP 60 billion per month, which has allowed them to preserve their economic activities, leverage their cash flow, safeguard employment and mitigate the negative impact from the COVID-19 pandemic. In order to address the health emergency caused by the pandemic, the COVID-19 Crisis Committee continues its operations, deploying the protocols and guidelines for the prevention, control and mitigation of the pandemic's effects on our employees, and to ensure the continuity of our operations during this health emergency. Likewise, our Oil Price Committee has deployed the financial contingency plan through which we have managed the economic impact of the international oil price drop and changes in demand. In response to the aforementioned, we were able to promptly reassess the 2020-2022 Business Plan, which responds to the crisis and protects the business sustainability going forward. The new Plan includes: i) an organic investment of USD 11 - 13 billion, of which between USD 3.0 - 3.4 billion will be invested in 2020, similar to the investment levels that of 2019, and higher than the announced in May; ii) sustainable levels of profitable production in a range between 700 - 720 mboed, maintaining the focus on exploration, where more than 30 wells are expected to be drilled; enhance recovery in higher value opportunities; Comprehensive Research Pilot Projects development for unconventional reservoirs in Colombia (PPII for its Spanish acronym); and continuity of highest potential international investments; iii) stable transported volumes in a range between 1,100 - 1,025 mbd, iv) increasing consolidated throughput in a range between 300 - 380 mbd by 2022, focusing on developing initiatives to increase the refining margin and iv) a continued focus on reducing operating cost and expenses without affecting the reliability and safety of our operations, which will allow us to achieve cumulative savings of up to COP 6.5 trillion by 2022. The Technology, Environmental, Social and Governance (TESG) front remains a priority. Therefore, we maintain our decarbonization target of 1.8 - 2.0 MtCO2e/year in 2022, renewable energy generation capacity of ~300 MW by 2022, and social and environmental investment of COP 1.7 trillion between 2020 and 2024. Likewise, in an effort to accelerate digital transformation, we will invest around USD 158 million in innovation and technology. The commitment to the continuous strengthening of our corporate governance has been reflected in a greater periodicity of the Board of Directors meetings, which has followed up on all the strategic aspects to confront the current exceptional environmental conditions. Regarding the results for the first half of the year, we highlight the strength of our commercial strategy which has allowed us to maintain the combined refineries operation above their minimum levels and ensure the necessary revenues to make operations in our fields viable. In the exploration campaign, during the first half of the year, the Group and its partners completed the drilling of seven wells, five in Colombia and two in Brazil. Ecopetrol and Shell continue to move forward with the COL-5, Purple Angel and Fuerte Sur projects, highlighting the start in the second half of the year of the environmental monitoring activities in the area where the appraisal well will be drilled, which is expected to occur in 2021. In the first half of 2020 Ecopetrol Group's average production closed at 706 mboed, 19 mboed less than first semester of 2019, mainly explained by the current situation, as well as by public order events and blockages in the Rubiales and Suroriente fields. These impacts were partly offset by higher sales of white products from the LPG Plant in Cupiagua, and the operations reversal in the Pauto and Floreña fields. The gas business made a significant contribution to the country's energy safety, whose hydric reserves reached critical levels during May and June. Transitional regulation allowed gas to replace hydro generation, compensating for the impact on the Group's demand as a result of the health emergency. Regarding Non-conventionals, the Ministry of Mines and Energy published the technical regulation on July 7th, and we expect that the environmental, civil and contractual regulation will be published released in the coming months, completing the regulatory framework for the development of the Comprehensive Research Pilot Projects (PPII). The activity planned in the Mid-Magdalena Valley remains within the new 2020-2022 Plan, with an investment of around USD 127 million, and we recently announced a preliminary agreement with ExxonMobil to jointly work on these pilots. We highlight the reactivation of operations of our activity with Oxy in the Permian during the second half of 2020. Activities will mainly focus on the drilling of 22 new wells, additional to the 22 already producing, and that will be completed and begin production in the first quarter of 2021. We estimate an average net production for the Ecopetrol Group of ~5.5 mboed in 2020, higher than the 4 - 5 mboed announced in the first quarter of the year. In addition to the economic rationale, this reactivation allows us to continue with the knowledge transfer and confirms the competitiveness of the position and the alignment with our strategic partner. In the midstream segment, transported volume decreased 10% as compared to the first half of 2019, impacted by lower domestic production, as well as lower consumption of crude by our refineries. Given the exceptional situation and, with the aim of mitigating permanent impacts on volumes, a temporary relief program was activated that resulted in total financing of USD 8.7 million and commercial tariffs discounts between 5.5% and 10%s, for April and May. Also, volume requirements were relaxed for some ship-or-pay contracts. No reversal cycles have been carried out this year, thanks to reduced maintenance times for the repair of the Caño Limón oil pipeline. The downstream segment performance was negatively impacted by the drop in demand associated to the lockdowns, as well as in the prices for major refined products worldwide. However, given the gradual recovery in demand, refineries have increased their throughput, reaching a combined throughput of 300 mbd and an integrated refined gross margin of 8.1 USD/Bl, compared to 364 mbd and 9.7 USD/Bl for the first half of 2019. On June 25, 2020, the Superintendence of Companies decreed the termination of the reorganization process of Bioenergy, a subsidiary of the Ecopetrol Group, and the opening of a judicial liquidation process within the framework of the corporate insolvency law 1116 of 2006. The liquidation process will be carried out under the rules that govern this kind of processes, under the direction of the Superintendence of Companies. Continuing with our commitment towards the energy transition and the preservation of the environment, during the first semester we achieved a reduction of 687,769 tons of CO2 equivalent, verified by Ruby Canyon Engineering firm, which will be registered in order to obtain an equivalent number of Certified Emission Reductions. Likewise, in line with the announcement made in the first quarter, the competitive bidding process for the procurement of the San Fernando Solar Park received six bids for its construction. This is the Group's second mega solar farm, which will have a capacity of 50 MW and will be located in the municipality of Castilla La Nueva in Meta, and whose contract is expected to be signed in August. Additionally, we continue to make progress in the maturation of other projects for nearly 100 MW of solar generation that are expected to be awarded during the second half of 2020. Ecopetrol remains committed to generating sustainable value for society. Today more than ever, the safety and care of our employees and contractors, the reliability of our operations and the financial discipline that leverages results are at the core of our business. With our actions, we continue to promote the implementation of better environmental, as well as the social and economic development of the regions where we operate." To review the full report please visit the following link: http://www.ecopetrol.com.co/wps/wcm/connect/41e44fb5-ed1a-4bc9-b410-4d01219c28d6/Q2+Earnings+Release+-+ENG+-+VF.pdf?MOD=AJPERES&id=1596535705431 Bogotá, August 4, 2020 This release contains statements that may be considered forward looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934. All forward-looking statements, whether made in this release or in future filings or press releases or orally, address matters that involve risks and uncertainties, including in respect of the Company's prospects for growth and its ongoing access to capital to fund the Company's business plan, among others. Consequently, changes in the following factors, among others, could cause actual results to differ materially from those included in the forward-looking statements: market prices of oil & gas, our exploration and production activities, market conditions, applicable regulations, the exchange rate, the Company's competitiveness and the performance of Colombia's economy and industry, to mention a few. We do not intend, and do not assume any obligation to update these forward-looking statements. For further information, please contact: Juan Pablo Crane de Narváez Head of Capital MarketsPhone: (+571) 234 5190E-mail: [email protected] Jorge Mauricio Tellez Media Relations (Colombia) Phone: (+ 571) 234 4329 E-mail: [email protected] View original content to download multimedia:http://www.prnewswire.com/news-releases/ecopetrol-business-group-announces-second-quarter-2020-results-and-the-update-of-its-business-plan-2020-2022-301105506.html SOURCE Ecopetrol S.A.

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Apache Prices $1.25 Billion Notes Offering

Apache Prices $1.25 Billion Notes Offering HOUSTON, Aug. 03, 2020 (GLOBE NEWSWIRE) -- Apache Corporation (NASDAQ: APA) today announced that it has priced $500 million in aggregate principal amount of 4.625% notes due 2025 and $750 million in aggregate principal amount of 4.875% notes due 2027 in an underwritten public offering. Apache intends to use the net proceeds from the offering to purchase a portion of Apache's outstanding senior indebtedness in cash tender offers with respect to several series of its outstanding notes, which commenced on August 3, 2020, with a maximum aggregate purchase price of $460.0 million (the "Tender Offers"); to repay a portion of outstanding borrowings under Apache's senior revolving credit facility, and for general corporate purposes. Net proceeds to Apache, after deducting the underwriting discount but before deducting offering expenses payable by Apache, are expected to be approximately $1.237 billion. The offering is expected to close August 17, 2020, subject to the satisfaction of customary closing conditions. Joint book-running managers for the notes are J.P. Morgan Securities LLC, BofA Securities, Inc., BMO Capital Markets Corp., and Scotia Capital (USA) Inc. This announcement is for informational purposes only and is not an offer to purchase or sell or a solicitation of an offer to purchase or sell, with respect to any securities, including in connection with the Tender Offers, nor shall there be any sale of these securities in any jurisdiction in which such offer or solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.About Apache Apache Corporation is an oil and gas exploration and production company with operations in the United States, Egypt and the United Kingdom and exploration activities offshore Suriname. Apache posts announcements, operational updates, investor information and press releases on its website, www.apachecorp.com. Cautionary Statements and Risk Factors That May Affect Future Results Certain information contained in this release is forward-looking information based on current expectations and plans that involve risks and uncertainties. Forward-looking statements are not guarantees of performance. Actual events or results may differ materially because of conditions in our markets or other factors. Moreover, Apache does not, nor does any other person, assume responsibility for the accuracy and completeness of those statements. Unless otherwise required by applicable securities laws, Apache disclaims any intention or obligation to update any of the forward-looking statements after the date of this release. If Apache does update one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those or other forward-looking statements. All of the forward-looking statements are qualified in their entirety by reference to the factors discussed under "Risk Factors" in the Offer to Purchase and under "Forward-Looking Statements and Risk" and "Risk Factors" in Apache's Annual Report on Form 10-K for the year ended December 31, 2019 and Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2020 and June 30, 2020 (each of which is incorporated by reference in the Offer to Purchase) and similar sections in any subsequent filings, which describe risks and factors that could cause results to differ materially from those projected in those forward-looking statements. Those risk factors may not be exhaustive. Apache operates in a continually changing business environment, and new risk factors emerge from time to time. Apache cannot predict these new risk factors or assess the impact, if any, of these new risk factors on Apache's businesses or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those described in any forward-looking statements. Accordingly, forward-looking statements should not be relied upon as a prediction of actual results. Contacts Website: www.apachecorp.com APA-F

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Moody's Confirms Ecopetrol S.A.'s Investment Grade Rating

Moody's Confirms Ecopetrol S.A.'s Investment Grade Rating BOGOTÁ, Colombia, Aug. 3, 2020 /PRNewswire/ -- Ecopetrol S.A. (BVC: ECOPETROL; NYSE: EC) announces that the rating agency Moody's kept the Company's long-term international rating at Baa3, with stable outlook. Moody's highlighted the Company's strength as a leading firm in Colombia, the benefits of being an integrated company, as well as the adequate liquidity levels required to navigate the current situation. Moody's maintained Ecopetrol's individual credit rating (Stand - Alone/ without incorporating government support) at ba1. Ecopetrol is Colombia's largest firm and is an integrated oil company that is among the 50 largest in the world and the four largest in Latin America. In addition to Colombia, where it generates over 60% of the country's production, it is active in exploration and production in Brazil, Peru and the United States (Gulf of Mexico). Ecopetrol operates the largest refinery in Colombia, most of the country's oil-pipeline and polyduct network, and is significantly increasing its share of bio-fuels. This press release contains statements relating to business prospects, estimates of operating and financial results, and Ecopetrol's growth prospects. All are projections, and therefore are based solely on management's expectations of the company's future and its continuous access to capital to finance the company's sales plan. Achieving these estimates in the future depends on its performance under given market conditions, regulations, competition, performance of the Colombian economy and industry, among other factors; therefore, they are subject to change without prior notice. For further information, contact: Juan Pablo Crane De NarváezHead of Capital MarketsPhone: (+571) 234 5190Email: [email protected] Media Relations (Colombia)Jorge Mauricio TellezTelephone: + 571-234-4329Email: [email protected] View original content:http://www.prnewswire.com/news-releases/moodys-confirms-ecopetrol-sas-investment-grade-rating-301105082.html SOURCE Ecopetrol S.A.

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Forum Energy Technologies Announces Timing of Second Quarter 2020 Earnings Release and Conference Call

Forum Energy Technologies Announces Timing of Second Quarter 2020 Earnings Release and Conference Call HOUSTON, Aug. 03 /BusinessWire/ -- Forum Energy Technologies, Inc. (NYSE:FET) announced today that it will host a conference call to discuss its recently announced successful debt exchange and its second quarter 2020 earnings at 9:00 AM CDT on Friday, August 7, 2020. Forum will issue a press release regarding its second quarter 2020 earnings prior to the conference call. To participate in the earnings conference call, please call 855-757-8876 within North America, or 631-485-4851 outside of North America. The access code is 3675003. The call will also be broadcast through the Investor Relations link on Forum's website at www.f-e-t.com. Participants are encouraged to log in to the webcast or dial in to the conference call approximately ten minutes prior to the start time. A replay of the call will be available for two weeks after the call and may be accessed by dialing 855-859-2056 within North America, or 404-537-3406 outside of North America. The access code is 3675003. Forum Energy Technologies is a global oilfield products company, serving the drilling, downhole, subsea, completions and production sectors of the oil and natural gas industry. The Company's products include highly engineered capital equipment as well as products that are consumed in the drilling, well construction, production and transportation of oil and natural gas. Forum is headquartered in Houston, TX with manufacturing and distribution facilities strategically located around the globe. For more information, please visit www.f-e-t.com. View source version on businesswire.com: https://www.businesswire.com/news/home/20200803005790/en/   back

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