Delta's Oil refinery

[BEfly]

http://seekingalpha.com/article/115...l-refinery-the-math-doesn-t-work?source=yahoo


During a time when most refiners are reporting good earning numbers as price gain of petroleum products has outpaced stagnant WTI crude prices, Delta reported loss of $63 million at the Trainer refinery in 4Q, and expects more losses of up to $100 million in 1Q 2013. Delta chalked it up to Sandy, the super storm.

 

[BILL LUMBERG]

I am always skeptical of what management spins but they claim it's because all of the pipeline issues and infrastructure around the facility not being able to supply fuel due to Sandy. The facility itself was fine.

But then again, their lips were moving.

 

[General Lee]

Sandy didn't do anyone favors up there. But, as oil continues to climb, potential savings is there. Once it is up and fully running, the investment will probably be worth it and then some.


Bye Bye---General Lee

 

[Freebrd]

sureeeeeeeeee it will Jenny you putz

 

[HighSpeedClimb]

I got 3 very good friends flying for Phillip66. Needless to say, the sale of that refinery made 66 very happy. It will and continue to be a headache for DL. IMHO of course

 

[Andy]

Sandy didn't do anyone favors up there. But, as oil continues to climb, potential savings is there. Once it is up and fully running, the investment will probably be worth it and then some.


Bye Bye---General Lee

Once again, the refinery purchase is simply a hedge on crack spread prices. It has no impact on the price of a barrel of oil paid by Delta.

I'll give Delta a mulligan through 2013 on the Trainer refinery, but I doubt that it will ever be a success for Delta. I expect the Trainer refinery to be a drag on Delta's earnings until they decide to sell it.

Other than this misstep, Delta's management seems to be making a lot of smart moves. But no one's perfect.

 

[Beechdriver32]

So- if I understand this right- an OIL company sells a refinery that is unprofitable to an airline-- because the airline thinks it can make the oil refinery profitable.

Even though the oil company couldn't. Right?

Interesting.

 

[redflyer65]

So- if I understand this right- an OIL company sells a refinery that is unprofitable to an airline-- because the airline thinks it can make the oil refinery profitable.

Even though the oil company couldn't. Right?

Interesting.

You nailed it. The refinery was unprofitable for many, many years. So much so that they decided to close it. Wasn't worth even operating.

 

[BILL LUMBERG]

Hey Red,

When you know nothing about a subject, it's best to just stay quiet and make people think you don't care.....

If we start a thread on the Warrior spirit, we'll be ready for your smart opinion.

 

[redflyer65]

Funny thing is Bill, you just assume I don't know anything about the subject.

You couldn't be more wrong, but thanks for trying.

Now tell me how I had it wrong.