Greetings and welcome to Par Pacific Holdings First Quarter 2017 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Christine Laborde, Director of Investor Relations. Thank you. Please go ahead.

Thank you, Brenda, and welcome, everyone, to Par Pacific Holdings first quarter 2017 earnings conference call. With me today is William Pate, President and Chief Executive Officer; Will Monteleone, Chief Financial Officer and Joseph Israel, President and Chief Executive Officer of Par Petroleum. Before we begin, please note that some of the statements we make during this call may contain plans, expectations and estimates including but not limited to our outlook for the company. These are forward-looking statements which are subject to change. They are subject to risks and uncertainties, and actual results may differ materially. Because of this, investors should not place undue reliance on forward-looking statements. We disclaim any intention or obligation to update or revise any forward-looking statements. I refer you to the latest Forms 10-K and 10-Q of Par Pacific Holdings filed with the SEC for a more detailed discussion of the major risk factors affecting our business. Further information regarding these as well as supplemental financial and operating information, including reconciliations to GAAP may be found within our press release and our investor presentation on our website at www.parpacific.com or in our filings with the SEC. Please be aware that our use of the term EBITDA throughout the call will correspond with the term adjusted EBITDA as defined in our press release. We may also use other non-GAAP measures as described in the press release. Now, let me turn the call to Bill Pate.

Thank you, Christine, and good morning, to our conference call participants. We began 2017 with excellent financial results for the first quarter. Adjusted EBITDA was $32.3 million, a substantial increase over first quarter adjusted EBITDA in 2016 of $5.4 million. We also reported strong adjusted net income of $20.2 million, or $0.43 per share. All of our business units generated good results for the quarter. Realized margins were solid in Hawaii due to the strength in the Asian market relative to last year; Joseph will cover more on our Refining margins and related operational performance in detail. Overall, our Refining segment Adjusted EBITDA increased $19 million to $25.1 million in the first quarter of 2017 when compared to the prior year quarter. Refinery profitability and excellent execution by our logistics team also resulted in better-than anticipated throughput in our Hawaii Logistics network. These factors combined with the addition of the Wyoming Logistics assets resulted in a 21% increase in measured throughput averaging 182,000 barrels per day, and Logistics segment adjusted EBITDA of $10.9 million, a 79% increase over the first quarter of 2016. Our Retail segment reported $7.6 million in adjusted EBITDA. While this amount represented a 10% decline compared with the 2016 first quarter results, same-store fuel volumes at our retail locations were up 2.8% during the quarter. We are pleased with the conversion of our former Tesoro fuel sites to the new Hele brand, and we are also seeing strong performance from our “76”-branded stores as they compete with the new Texaco brand that is replacing Chevron in the state. In April, we opened one new Hele store in Hawaii Kai to address a nearby location that we lost last fall. We also inked a deal to develop a property and open a new Hele fuel location in western Oahu. We have letters of intent to co-locate with a 7-11 and a major national food service retailer at this site. We purchased the property this quarter, but do not expect to be in operation until 2018. And now, Joseph will provide more details on our downstream business.

Thank you Bill and good morning everyone. In Hawaii, combined Mid Pacific index was $8.90 per barrel during the quarter, compared to $6.58 per barrel during the first quarter of 2016. The favorable market conditions in the first quarter continue to be driven by Singapore gasoline and fuel oil crack spreads. In the first quarter, our refinery throughput in Hawaii was 77,000 barrels per day. Adjusted gross margin was $7.06 per barrel and direct production costs were $3.71 per barrel. We sold 80,000 barrels per day, including 62,000 barrels per day of on-island sales. We exported 18,000 barrels per day during the quarter, including high octane mixed aromatics to the Asian market. On April 21st, we took our reformer offline for a planned 11 days oil-to-oil reformer regeneration. During that window, we took the opportunity to perform planned maintenance and upgrades in our diesel hydrocracker, hydrogen plant and naphtha hydrotreater. As a result, we incurred approximately $1.5 million of cost and $4.5 million of lost opportunities related to the planned maintenance activities. So far in the second quarter, our combined Mid Pacific index has been flat with the first quarter around $8.90 per barrel. Our second quarter planned throughput in Hawaii is 70,000 to 73,000 thousand barrels per day. In Wyoming, our 3-2-1 index was $16.51 per barrel during the quarter, compared to $13.44 per barrel during the first quarter of 2016. In the first quarter, our refinery throughput averaged 14,000 barrels per day. Adjusted gross margin was $9.45 per barrel, and direct production costs were $7.46 per barrel with approximately $0.30 cents per barrel related to our reported special item. On the gasoline front, as mentioned in the previous earnings call, we have started to use railcars to access new markets. On the distillate front, we have seen strong diesel and jet fuel demand in the first quarter, continuing into the second quarter. As a result, starting April, we have increased our distillate yield up from 40% to over 47% so far in the second quarter, to meet demand. These dynamics and capabilities are supporting our commercial flexibility through seasonal volatility, and eventually helping us to optimize capture rate. So far in the second quarter, our Wyoming 3-2-1 index has averaged approximately $21.70 per barrel. We continue to position our refinery and system inventories in Wyoming for the gasoline season, and planned throughput for the second quarter is 15,000 to 16,000 barrels per day. At this point, I'll turn the call over to Will to review Laramie and corporate results.

Thank you, Joseph. Laramie began 2017 with strong execution of its drilling plan and setting the table for further production growth through the year. During the quarter, Laramie generated net income of $17.5 million and income from operations of $1.2 million. Laramie's net income included $24.2 million in unrealized derivative gains and $5.4 million in realized derivative losses for a net derivative impact on the quarter of $18.8 million. DD&A totaled $13.3 million and non-cash compensation expense totaled $1.7 million. Quarterly Production averaged 146 million cubic feet a day equivalent and March exit production was 145 million cubic feet a day equivalent, growing 6.5% and 3.6% compared to the fourth quarter of 2016 and December exit production, respectively. During the quarter, Laramie completed eight wells and drilled 18 wells, finishing the quarter with 22 drilled but uncompleted wells. Laramie expects to add another rig during the month of May consistent with our prior expectation. Unhedged price realizations continue to improve and during the quarter gas realizations were $3.01 per Mcf, Natural Gas Liquids $0.3 per gallon and condensate $47 per barrel. Laramie recently added propane hedges for the balance of 2017 and remains hedged on natural gas between 80% to 90% of existing production through December 2018. Laramie generated approximately $7.7 million in EBITDAX for the first quarter, spent approximately $12.6 million in CapEx, leaving a revolver balance of $121 million as of March 31. Laramie EBITDAX includes cash bonuses as paid of $1.9 million and a $1.4 million cash deficiency payment during the period. Laramie's debt to EBITDAX as of quarter end was of 3.0x. Regarding future plans, Laramie expects to run a 2-rig program for the second half of the year and completions activity is back-end weighted. Based upon this staggered 2 rig program, Laramie anticipates exiting 2017…

[Operator Instructions] Our first question comes from the line of Chi Chow with Tudor, Pickering, Holt. Please go ahead with your questions.

Couple of questions on refining, Joseph. I guess on Hawaii's crude slate, ANS differentials have tightened up here, with pricing pretty much on top of Brent. It looks like you lightened up the slate a little bit in 1Q, but how are you thinking about the optimal feedstock and mix in this environment and how do you see differentials trending going forward here?

We don't provide specific commercial guidance. We do work on our flexibility every day, commercially and operationally and you're right, in the summer ANS is typically short, and the differential is tight and this is where we work beyond the crude fronts to supply our refinery with the optimized barrel. At this point, it looks like there’s pressure on crude differentials across the board and we'll continue to monitor it and buy the right crude. It looks like the fourth quarter is starting to shape up correctly from a crude differential standpoint and will be interesting to see if starting August we’re getting there as well.

If you run lighter barrels through that system, any sort of thoughts on yield impact or cap rate impacts relative to your index?

Yeah. 2.5 years ago, we were running at 33%, 34% fuel oil. This quarter, we ran 18% fuel oil. Yield basically our ULSD and gasoline increased as a result. So we definitely have this flexibility running a lighter crude.

Okay. Thanks. And then at Wyoming, I know it's only been three quarters now, but the operating expenses have been moving around a bit. How should we think about what normalized levels are going forward there on OpEx?

Yeah. We mentioned in the previous calls, $6.50 per barrel kind of the run rate operating expense. I still think it's a good number. This quarter, it was about $1 million or $0.75 per barrel, associated with timing and personnel costs and some maintenance. You will see it up and down, but I think $6.50 is a good number going forward. And also there was the throughput impact in the first quarter were 14,000 barrels increase production costs on a per barrel basis.

Our next question is coming from the line of Tim Rezvan with Mizuho Securities.

I had a couple of different topics. I guess, I will start with Will. I apologize I didn't hear this. What was the first quarter EBITDAX of Laramie?

It was $7.7 million for Laramie. And that is inclusive of basically cash compensation expense during the period. There's cash compensation expense during the period associated with the bonus payout that I called out in my notes. It was effectively, about 1.9 million of bonus expense that's included in that $7.7 million. There is also $1.4 million cash deficiency payment during the period. So if you were to add back those amounts and treat it sort of more consistent with the accrual, you'd be running closer to the $11 million range.

And then there was discussions last quarter about thoughts around the three rig program. Where does Laramie stand on that now and I guess how quickly can you get a rig in if you want to do that?

Yeah. I think we're evaluating the pace of the development plan at Laramie. And I think what the two-rig program would feel like we can generate some pretty significant production growth. I think that adding a third rig is possible with the right gas price environment and then also just managing for debt to EBITDAX profile. So I think that's really the way we're evaluating the notion of adding a third or fourth rig. I would say with the two rigs running, we're going to be growing production pretty substantially and I think to the extent we can hedge into a higher gas price environment and manage our debt to EBITDAX, I think we'd be looking to add additional rigs in the future.

Okay. So leverage is just sort of the governor on that.

Yes.

Okay. And then on, just quickly I was curious on interest expense. So essentially, the [indiscernible] cash, essentially paying down 10% paper and interest rate on that 30 million, is it the way we should be thinking about that?

Correct. So it's roughly 7% cost of funds and we're repaying 10% paper at the parent company level.

Okay. So we can work that into interest expense modeling I guess? Okay. That's great. And then if we can move to logistics front very strong throughput in the first quarter, should we expect that run rate going forward, was there anything one-off in that quarter? Not even, similar to Wyoming, what a good run rate kind of for EBITDA?

For EBITDA, I think that run rate is a reasonably good run rate at the current throughputs in Hawaii. Of the EBITDA, keep in mind that about 2.6 million of that was related to the Wyoming acquisition, but the remaining 40% growth in EBITDA was related to higher throughput in Hawaii. And in Hawaii, our costs are semi-fixed. So to the extent that throughput goes up, our margin goes up some. And in addition, so more profit falls to the bottom line. At the levels of throughput that we're talking about in the first quarter, I think you can expect that kind of EBITDA. Joseph has mentioned that our throughput in Q2 is going to be down a little bit, so EBITDA in Hawaii probably will come down a little bit. It's going to depend a little bit too. There's a little more complexity because you have to think about kind of every toll point in Hawaii and it depends on where the barrels are coming in. We might have barrels, we're generating revenues as we move barrels to the outer islands or generating revenues as we move barrels through the SPM and we had a fair amount of exports last quarter, which also increased the SPM throughput in the logistics network relative to Q4 for example.

Okay. That's helpful. And then one last one, thinking kind of on the M&A front, your shares are back over $17 for the first time of the year. So you're pretty good at currency there, relative to last year. What are you seeing out there, what are your kind of big picture thoughts on bolt-ons?

Well, first of all, I think that we're focused on acquisitions that are bolt-ons. And just about any opportunity we evaluate will require an equity issuance. And the cost of that capital is something that's important to us and we want to make sure that we are pursuing and completing transactions that are accretive. Ultimately there will be some dilution with an equity raise. So even at these share prices, I want to make sure we have attractive opportunities to pursue deals. I think that the deals that we see, I want to make sure that they provide synergies with our existing assets because there's plenty of value to be realized just working our current asset base.

Our next question is coming from the line of Mike Harrison with Seaport Global. Please go ahead with your questions.

Good morning, this is Jacob Schowalter on for Mike. My first question is on Laramie, in terms of the new drilling pattern, are you guys getting any early results on it that show maybe the actual performance versus kind of your internal expectation?

So in terms of timing at Laramie front, we've had that the two patterns growing commenced in December with the rig that we added and we really don't expect the completion activity to begin there until June. So I don't think we're going to have any initial results until early Q3. But we do think with regards to this pattern and just to give you a bit more color on this, we've evaluated other players in the basin that have used this design and have switched to this and based on those results and there's a pretty large dataset in around that we feel confident that new pattern is going to yield positive results that we expect.

And then you guys exited 145, to get to the 160 to 180, can you go through kind of the cadence of how you expect that to ramp with the more so kind of similar in the second quarter and then kind of stepwise jump into third and fourth quarter.

I mean I think given the lack of completion activities that I'm referencing as it relates to the first rig that we started, I think the completion cadence is going to be backend weighted. And therefore the production growth is going to be backend weighted in the second half of the year. So again I think that's we don't have a lot of completions planned during the second quarter.

Our next question comes from line of Chi Chow with Tudor, Pickering, Holt. Please go have a good questions.

Just a follow up back on logistics, in Wyoming, are you gathering more barrels than you run at the refinery. And what do you seeing on the Powder River Basin crude production trends seems like the producers some of the producers there are talking about that region being one that gets scale is there other opportunities to gather more so to ramp the volumes beyond Newcastle's requirements.

At this point, we're really focused on is feeding our refinery and only gathering the barrels that we need and then we're supplementing anything we gather at Powder River Basin with our access to the Butte pipeline. I think given the rig count right now it [the Powder River Basin] is really just maintaining the production. And so we don't see any real positive trends at this point, but it's obviously something that we're giving consideration to depending on the - there has been a fair amount of enthusiasm from some of the producers and if rig count picks up, and growth and volume picks up, we'll revisit that.

Can you provide any sort of rough percentage breakdown though on logistics operating income contribution between Hawaii and Wyoming?

Yes, in terms of EBITDA, I don't know about operating income, in terms of EBITDA 10.9 million, about 2.6 million was Wyoming.

[Operator Instructions] Our next question comes from the line of Andrew Shapiro with Lawndale Capital. Please go ahead with questions.

Your release reported mid pacific index and crack spreads for the end of the first quarter or maybe for the average of the first quarter? Can you share what the index and spreads are at today here in the middle of the second quarter?

Yes, we did that in the script Andrew and it's very flat. In the first quarter, it's $8.90 per barrel for the combined index.

So it's unchanged then for the first quarter, I understand the quarter, and I know that was in the script. I was just wondering where they've fluctuating here in the middle of the second?

They are the same, yes.

On Wyoming, your utilization rate at 78%, is that kind of the seasonal norm for the soft period or is that something that coming over the next year. I know in the summer it will ramp up anyway, but is that something that will improve upon next year the same time?

Yeah. Andrew, you asked about the index for the Hawaii, and let me make sure the comment regarding Wyoming is clear. We gave guidance $21.70 is the Q2 average so far, so this is $5 per barrel better than Q1. With regards to the utilization rate, yeah it is seasonal business, Q4, Q1 and to be lower Q2, Q3, our optimization throughout will be higher. We'll keep looking at it and get the crude that we need to make the necessary sales. So we are talking now about going up to 15,000 to 16,000 barrels per day and we'll see what we need to do from there.

And then on logistics, we saw a large uptick in your operating income, and EBITDA for Q1 versus the prior year, and obviously some of that's Wyoming. But it was similar to what we also saw in Q4. So I just wanted to know if this is the level to kind of expect going forward you're your logistics business because it should be somewhat of a steady state, am I correct?

It's correct, but keep in mind that our throughput was relatively high in Q1 in Hawaii and our costs are semi fixed and as a result our margins were strong in Q1. So going forward to the extent that our throughput and I think as I mentioned Joseph has said that our throughput could be down a little bit in Q2. You should expect that is going to work the other way. So I'd say this is indicative of what the logistics EBITDA would be with the current throughput levels.

And on the Mid Pac for the convenience store side, do you guys track, monitor and then could report on the retail sales on the same store sales basis obviously that's kind of ex-gasoline because that would certainly impact things to the max.

We do track it, but I don't have that data in front of me, let me get back to you on that.

And lastly, can you just give us some guidance as to the incoming - the upcoming investor presentations and conferences in case I'm going to be in the same cities in advance.

Andrew, this is Christine. We have the Tudor, Pickering, Holt conference in June and then we are evaluating a couple other in the second and third quarter.

So, if you could let us know when you kind of lock down those cities and when that would be helpful.

Absolutely, will issue press releases with all the details.

Right, but that's usually only a week in advance of that you're going to present and that's a little late to go get a flight and register for the conference.

The Tudor, Pickering conference is in Houston. We can send you the details, we'll get those details and get them to you Andrew.

[Operator Instructions] And it looks like we have no further questions at this time. I'd like to turn the floor back to management for closing comments.

Thank you operator, we want to thank everyone for joining us today. We're delighted to report strong first quarter financial results at all of our business units, while Asian inventories have improved, they're still somewhat above normal. Although Pacific refining margins continue to be near and even slightly above mid-cycle. We look forward to the summer driving season in Wyoming and are very pleased with the capabilities demonstrated by our Wyoming refining operation. We also look forward to the growth in the last half of the year from the Laramie drilling program which will allow our affiliate to achieve a greater operating scale. Thank you for joining us, have a good day.

Thank you, this concludes today's conference, you may disconnect your lines at the time. Thank you for your participation.