Good day, everyone. Welcome to the PBF Energy First Quarter 2023 earnings conference call and webcast. At this time, all participants have been placed in listen-only mode. The floor will be open for your questions following management's prepared remarks. If anyone should require operator assistance during the conference, please press star zero from your telephone keypad. Please note this conference is being recorded. It is now my pleasure to turn the floor over to Colin Murray of Investor Relations. Sir, you may begin. Thank you, Rob. Good morning and welcome to today's call. With me today are Tom Nimbley, our CEO, Matt Lucey, our President, Karen Davis, our CFO, and several other members of our management team. Copies of today's earnings release and our 10-Q filing, including supplemental information, are available on our website. Before getting started, I'd like to direct your attention to the Safe Harbor statement contained in today's press release. Statements in our press release and those made on this call that express the company's or management's expectations or predictions of the future are forward-looking statements intended to be covered by the Safe Harbor provisions under federal securities laws. There are many factors that could cause actual results to differ from our expectations, including those we describe in our filings with the SEC. Consistent with our prior periods, we will discuss our results today excluding special items. In today's press release, we describe the non-cash special items included in our quarterly results. The cumulative impact of the special items increased first quarter net income by an after-tax amount of $13 million or approximately $0.10 per share, related primarily to net changes in the fair value of contingent consideration. Also included in today's press release is guidance information related to our second quarter operations. For any questions on these items or follow-up questions, please contact investor relations after today's call. For reconciliations of any non-GAAP measures mentioned on today's call, please refer to the supplemental tables provided in today's press release. I'll now turn the call over to Tom. Thanks, Colin. Good morning, everyone, thank you for joining our call. Before commenting on the quarter and providing some market thoughts, I want to take a moment to discuss yesterday's announcement on the next phase of PBF's lifecycle. As of July first, I will be assuming the role of Executive Chairman of the Board. Matt Lucey will become PBF's next Chief Executive Officer. Leading PBF over the last decade has been an honor, privilege, and a rewarding challenge. The company has never been in better shape. It is time to turn the future over to Matt and the rest of the executive team. I will continue to serve PBF as Executive Chairman and work with Matt to develop the strategy for the company's future growth and identify other value-enhancing initiatives. I would also like to thank the employees of PBF, without whom none of our successes would be possible. Thank you. Regarding results, the first quarter was another strong quarter for PBF. We continued strengthening our balance sheet, rewarding shareholders, and finished the quarter with more cash than debt. The safety and reliability of our operations remain our first and top priority, but it is closely followed by maintaining our firm financial footing. Refiners follow the markets and respond to consumer demands. We continue to hear calls for higher refining utilization and see a market supported by low inventories and sustained customer demand. The winter of 2022, 2023 was a mild one in the Northern Hemisphere. Henry Hub U.S. natural gas futures started the year at $4.50 per million BTUs, and it ended the quarter at $2 per million. European natural gas prices fell as well, but still command a premium to U.S. natural gas prices of 6 to 7 times, providing domestic refineries with a competitive advantage. Crude differentials narrowed over the quarter. The OPEC+ production cuts are expected to be somewhat supportive for medium and heavy grades, which may further compress differentials. Although having narrowed, differentials remain wider than historical patterns. Similarly, despite recent declines, refinery margins also remain well above mid-cycle, but have moderated from the distant lead to 2022 levels. A key theme for 2023 is recovery in the demand for jet fuel and gasoline, supported by a stronger summer driving season. In brief, we are experiencing a tremendous amount of volatility in the broader market at intervals of increasing frequency. This makes it challenging to predict the timing of and future moves in the commodity markets. At the same time, we are seeing stable to growing demand for our products at our refinery gates, which continues the call for higher utilization from our assets. We expect volatility-driven market dislocations will continue to generate strong returns for our business. With that, I will turn the call over to Matt. Thank you, Tom. Thank you for your leadership and mentoring over the last decade. While we'll be transitioning roles over the next two months, I feel very fortunate and grateful that the company, as well as our shareholders, will continue to benefit from Tom's leadership in his new role as Executive Chairman. In our business, there are a number of moving pieces in the market that are beyond PBF's control. PBF remains focused on the aspects of our business we can control: the safety and reliability of our operations and our financial position. In recognition of PBF's commitment to safety, five of our six refineries were honored with safety achievement awards from AFPM with our Martinez Refinery receiving the Elite Silver Award given to the top 10 percentile in safety performance of refining and petrochemical facilities in the U.S. The first quarter was the strongest Q1 in PBF's history. Operations and results in the first quarter were impacted by lingering effects from the unplanned downtime due to Winter Storm Elliott, coupled with the extensive planned maintenance activity. We completed turnarounds at Toledo, Chalmette, and Martinez. Q2 performance will be impacted by the currently ongoing coker and hydrocracker work at Delaware City, which will be wrapping up very soon, and to a much lesser extent, minor work on the hydrocracker in Torrance. There will be a larger FCC and alkylation unit turnaround in the Q4 at Torrance. Outside of these activities, we should have a very clean operational runway. We are also progressing the St. Bernard Renewables project and are happy to report that we are mechanically complete on the renewable diesel unit, and that aspect of the project has been turned over to operations. The RD unit comprises the repurposed hydrocracker and ancillary supporting infrastructure. We are in the commissioning stages now. We should be introducing feed to the RD unit this month, primarily vegetable oils, tech tallow, and distillers' corn oil. We are still completing construction of the pretreatment unit and expect that work to be complete in June. We expect to introduce additional lower CI feedstocks once the pretreator is up and running. The JV transaction with ENI is expected to close later in the second or third quarter. We are awaiting certain regulatory approvals that are the only gated items for closing. On the regulatory front, in the first several months of 2023, we've seen new policies and positions attempting to prematurely alter the marketplace. None of these policies address the most critical component of increasing the supply of energy and all ignore the necessity to ensure reliable, ratable, and affordable energy. Much like the commodity markets, the policy environment is turbulent, and we expect the current volatility to persist. This has and will continue to create market dislocations. Robust market conditions has provided PBF with the opportunity to generate exceptional results, enabling execution of a financial strategy that has altered PBF's trajectory. Over the past 3 years, PBF has navigated financial stress to achieve a sector-leading balance sheet with unassailable financial metrics. We are committed to maintaining our safe and reliable operations while demonstrating the durability and transformation of our through-cycle financial strength. By doing so, we expect our credit ratings will improve, our cost of capital will be reduced, and operating results will continue to support balance sheet strength and the potential for increased shareholder returns. With that, I'll turn it over to Karen. Thanks, Matt. During the first quarter, we continued our work to improve the financial position of the company, strengthen our balance sheet, and reward shareholders. We further reduced our gross debt by another $525 million with the redemption of the PBF Logistics notes in February and reduced our outstanding payables related to environmental credits by approximately $300 million. To date, we have repurchased almost $350 million worth of PBF shares, bringing our total outstanding share count to just under 126 million shares. We have now effectively eliminated the dilution of the shares issued in 2022 in the transaction to fully acquire PBF Logistics. That was the first priority of the share buyback program. Additionally, we increased our existing share repurchase authorization by an incremental $500 million to a total of $1 billion. For the first quarter, we reported adjusted net income of $2.76 per share and adjusted EBITDA of more than $665 million. Consolidated CapEx for the first quarter was approximately $383 million, which includes $220 million for refining and corporate, $3 million for PBF Logistics, and just over $158 million related to the continuing development of the St. Bernard Renewables facility in Louisiana. Heading into 2023, we continue to demonstrate our commitment to prudent balance sheet management. Taking into account our most recent quarter, we reduced our gross debt and environmental liabilities by approximately $3.5 billion and rewarded investors with almost $400 million in returns through our dividends and share repurchases. We have cash in excess of debt with sufficient liquidity to serve the needs of the business. In the near to medium term, given heightened market volatility, we plan to maintain a level of cash above our previous guidance. We expect our gross debt and cash to be in the $1 billion to one and a half billion dollar range, respectively. Said differently, we expect to maintain close to zero net debt in the near term. Quantitatively, we believe we meet or exceed many investment-grade credit metrics. Our refinery should continue to demonstrate durable earnings power, and we are adding diversified earnings streams as SBR comes online. We will continue to exercise balance sheet discipline, targeting robust rating agency-driven metrics and sound financial health. Operator, we've completed our opening remarks, and we'd be pleased to take questions. Thank you. In a moment, we'll open the call to questions. The company requests that all callers limit each turn to one question to one follow-up. You may rejoin the queue with additional questions. If you'd like to ask a question, please press star one on your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press Star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions. Thank you. Thank you. Your first question is from the line of Doug Leggate with Bank of America. Please proceed with your question. Hey, good morning, guys. This is actually Clayton for Doug. Firstly, I'd like to offer my congratulations to the both of you, Tom and Matt. Tom, I particularly enjoyed listening to your market views over the years. It's really taught me a lot, and I'm sure other people have benefited as well. I guess that brings me to my first question here. My first question is on California. It seems like between the RD conversions at MBC and Phillips and the startup of TMX next year, the setup in California is looking increasingly attractive. Wondering if you can address the evolution that's going on in that market and touch on several points, the market balance, the destock outlook, and the potential impact from what they're calling the new Oversight Committee. Okay, thanks for your kind remarks, Doug, good morning to you. I'll just make some brief comments on California, and I'll turn it over to Paul Davis. Of course, you had three or four points there, Paul's been the point person for the company on many of them. We do expect gasoline and jet demand to pick up in California as we move into the driving season. Certainly, we've seen the strongest cracks in the country regionally right now out in California, led by gasoline. We do expect that distillate will be under some stress because of renewables. As you mentioned, with Rodeo already being down and... I'm sorry, with Marathon already being down, and Rodeo coming down sometime probably by the end of the year, certainly to finish the tie-ins to their project. We believe that California is gonna be a stronger market as we go further into the future. That's gonna be exacerbated by some of the policy decisions that are being made in California. Some of these policies, well-intentioned, have the result of adding costs to the business, have a result of impacting the supply chain negatively. That's what tends to drive the prices up. Paul, why don't you comment on what we're seeing there in actual throughput and the CEC stuff? All right. Well, the, you know, throughput we're seeing today in that marketplace is very, very normalized versus 2018 and 2019 demand. You have a pretty much a normalized marketplace as we speak. With the impending shutdown of Rodeo, that's gonna exasperate the supply. That's the bigger issue in California. They have a supply problem. There's really no way for them to deal with that said supply problem. It needs to attract imports. The import volumes that need to come in are above 100,000 barrels a day on just gasoline. Jet fuel is right behind it at around 40,000-50,000 barrels a day. That's the impending challenge for California, is how do you attract enough ratable supply to stay balanced for the population. With regards to the CEC and the impending rulemaking or not rulemaking, but the legislative bill, you know, we're gonna meet with the CEC next week. We're gonna provide some input for them. They have a cleanup bill that they're gonna be progressing through the legislation to be able to make sure that they've got a bill that can actually work. Right now, the way it's formulated, it's not gonna work for them. We'll meet with them next week. It's gonna be quite the challenge for the state to be able to manage the amount of information that they're seeking from others. Just Trans Mountain. Trans Mountain Pipeline, it looks like, we expect that to go into build mode. That's what the market has. Sometime in the second half of 2023. It's slated to start up first quarter of 2024. Most, if not all of that material, has to sail right by San Francisco and Los Angeles on its way to the lightering point for transpacific moves. I think we're gonna be positioned, as others will in California, to be a good outlet for some of that production. I guess, just to put a finer point on that question, do you see the addition of the WCS barrels in the Pacific Basin, advantaging your feedstock procurement costs relative to what you're seeing today? Does it make heavy crude cheaper? Yeah. We believe that's gonna be the case. You got two things that are rather significant. WCS moving to the West Coast and then being exported. We've got a lot of activity in our system in California, particular well, Martinez and refining, where we're looking at what we can do to increase the volumes that we plan to run. The other thing that is apparently still going to happen is that sometime by the end of the year, LyondellBasell continues to indicate that they're gonna shut down the refinery in Houston, and that, of course, is a heavy crude refinery. So there are some potential tailwinds on the heavy crude side. Got it. Thank you for that. My follow-up is on the cadence of turnarounds. The first quarter here was obviously very heavy, and some of that work is spilling over here into the second quarter. As you wrap these up, can you offer some thoughts on what the turnaround outlook looks like maybe over the next year or two? Sure. The first quarter was heavy. The hydrocracker and fluid coker work at Delaware City is gonna be wrapping up very shortly. We really have minor work in June in Torrance. It should not be too disruptive to earnings. There is a bigger turnaround starting at the very end of Q3, residing in Q4 at Torrance. Absent what I just described, the rest of the runway is very clear. Certainly, for all of our, you know, the other five refineries outside of Torrance from this point forward should have a very clear runway through the end of the year. Going forward, we're gonna get to a normalized turnaround schedule. We obviously, like everybody else in the industry, when we had these high margin periods, we took steps to safely, but continue to run. The units were pushed pretty hard. To a certain extent, we're paying for that in 2023, with most of that work already underway or done. But we expect to be maybe a little bit higher than normal next year, but from that point on, back to what we would expect. Great. Thank you very much, guys. Good luck. Thank you. Our next question is from the line of Manav Gupta with UBS. Please proceed with your question. Congrats on a good quarter, guys. You buy a lot of heavy sour crude and medium sour crudes globally, even from Canada, and you have a very informative view on where that market is heading. Help us understand a little bit what you're seeing out there in incremental Canadian barrels, some crude coming from Venezuela, BP ramping up some projects, OPEC cutting. Help us understand where these spreads are moving, both medium and heavy, in the near term. I'm gonna take the first part of it, and I'm gonna ask Tom O'Connor to weigh in on your question. As I said in my opening comments, certainly we've seen the light heavy spreads narrow in. Some of that's due to the fact that OPEC came out with their, you know, cut and tighten. That's gonna be a medium or a heavier barrel. The other thing is you would expect the diffs to narrow in some with a decrease in flat price. Because basically, you get penalized more when running a medium or a heavy crude if you don't have cokers, particularly we do. If you don't, there's a penalty if you're trying to run a medium crude. As that flat price comes down, and then that penalty decreases. Propane is not as much of a discount. Coke is not as much of a discount. You would expect them to narrow in. That being said, because of the production that's there, we are continuing to see light heavy diffs that are quite a bit wider than the historical norm. Tom, would you add? I don't have a lot to add. I mean, Tom's comments, I think, summarized it well. I mean, I think the only thing I'd really kind of add is that the market certainly has to deal with sort of the disruption over the fact that, you know, particularly I think in the Eastern Basin or the Pacific Basin, there's really an imbalance basically in crude costs between people that are consuming discounted Russian crude versus people that are paying market indicators. That certainly has, I think, exacerbated some of the moves that we saw coming out of the OPEC+ cuts, you know, when they were announced. Feels like things normalized just a little bit of a touch. As you mentioned, there certainly is some, you know, marginal growth at this point coming out of the U.S. Gulf Coast. You know, certainly it seems like Venezuela is producing more barrels, which are finding their way to the U.S. Yeah. Perfect, guys. One quick follow-up here is, over the years, you've done a very good job of fixing up these assets and improving the reliability. Two small items caught our eye. One was, generally, you are much better in your op cost on the West Coast. It seemed a little high on the quarter, we are hoping it tapers down again. MidCon, you have a good asset. Just help us understand what exactly happened during the quarter, because generally it's a very good asset. Yeah. I'll start Matt weigh in. Well, op cost in the West Coast, natural gas really blew out on the West Coast. Some of that was weather related. Natural gas in the first quarter was high across the entire country. Particularly in Northern California, it was extremely high. That certainly hit us on operating costs. Those gas prices come back to norm. Toledo, which is a very good machine, Toledo Refinery was hurt badly from Winter Storm Elliott. Is that what we called it? The Christmas Eve freeze. Yeah, go ahead. You take it. The freeze that happened on Christmas Eve, you know, we suffered unplanned downtime both at Chalmette and Toledo. Just from a management of that, we were able to accelerate some work which mitigated what otherwise would have been, you know, a more blatant, you know, Result from the unplanned downtime. We are able to sort of couple it with work, but we had to go into the cat cracker at Toledo, and so we're able to take a, essentially, a surgical strike there, which definitively impacted the quarter between the two. Nothing has changed at Toledo. It's still an exceptional refinery, but it has to run, and it has to run reliably for that to be the case. That's certainly the expectation going forward. One other thing I should have mentioned on the, on the West Coast, natural gas prices was a big player. We also did execute a turnaround in Martinez, and it was a good size turnaround. We shut down a crew unit, and we were able to keep because we had commercially set up to be able to continue to try to fill or at least run the downstream units. Throughput was down because of that turnaround being down. On a unit basis, that hurt us on cost. Thank you for the detailed responses and all the best to Matt for the new leadership role. Thank you. Thanks, Paul. The next question is from the line of Ryan Todd with Piper Sandler. Please proceed with your question. Thanks. Yeah, let me start out. Congratulations, Tom and Matt. You and the team have done an amazing job of transforming the company over the last 10 years and positioning it for success going forward. Congratulations to both of you. I wanted to ask on some of the cash or the uses of cash going forward. You reduced your balance of environmental liabilities by $300 million in the quarter. Can you run through the non-CapEx related kind of uses or potential calls on cash over the remainder of the course of this year? How much more environmental liability you anticipate, you know, reducing to get back to a normalized level? I believe there's, you know, there's a J. Aron inventory management agreement that you could look to address. What are the non-capital related potential uses of cash that we should expect to see between now and year-end? Sure. Thanks for the question. We ended the quarter with $1.6 billion in cash, and I'm glad you focused. There are certainly some cash calls coming forward. We're gonna continue to execute on the annual capital program, which is elevated above normal levels $700-$750 this year. In the near term, in the second quarter, we'll be finishing up the SBR project and funding its initial working capital. As you mentioned, we are going to continue to reduce our environmental credit liability. We've described that. We have a plan that we'll be doing that over the next five to six quarters. I think you would likely should expect to see a more normalized environmental credit liability balance in the 2-4 months range, RINs liability range. Yeah, Ryan, the RIN program is obviously matches up with our new operation, which is gonna start generating RINs. We've, we've worked hard in sort of syncing the normalization of the RIN balance to our new production of RIN credits. Of course, the other thing that. Sorry, go ahead. I was just gonna mention, we obviously got board approval to, as we mentioned in the script, Karen mentioned, to up the repurchase program. We'll be using some cash opportunistically to do that. Go ahead. I'm sorry. I was just gonna say on the normal, I think you talked about two to four months. I mean, I guess it depends on RIN prices, but is that $400 million environmental liability, $300 million that kind of remains on a go-forward basis on a, you know, that rolls? Well, I think that's gonna be based on, we consume about 100 million RINs a year, is our RVO. Yeah, depending on price. Yeah. It's a couple hundred million dollars. Go ahead, Tom. Yep. Yep. Okay. All right. Maybe switching gears. Gasoline inventories remain extremely tight, particularly in Pad 1. Can you talk about what you're seeing on, you know, kind of market dynamics in your areas of operation, particularly in the Northeast, and what that might mean for gasoline and distillate markets as we head into summer driving season? Yeah. I'll ask Paul to handle that. quick talking. The short answer is our rack demand, wholesale de-demand remains very strong. Go ahead, Paul. I mean, he stated it. Inventory positions in pad one are, you know, around five-year lows coming into driving seasons. Things are starting to show a pretty good bid. Our wholesale business in the East Coast is year to date is up 10% from last year, and current run rate right now is 15% above first quarter. It's shaping up to be a strong season going into the summer, and we're anticipating that really across the country. Great. Thank you. Our next question is from the line of John Royall with J.P. Morgan. Please proceed with your question. Hey, good morning. Thanks for taking my question and congrats to Tom and Matt. We did notice a bump of, I think, about $50 million on full spend on the SBR project. Now I realize in the broader context of the $800 million plus you're bringing in, it's somewhat less material, but just any color on that incremental spend would be helpful if we have that right. You do. While we're not pleased, with, you know, we try to drive to perfection with delivering projects on time. There was a small increase, although we're getting down to the short strokes. As I said, the renewable diesel unit has been turned over to operations. They're commissioning it now. In fact, we, you know, we expect to feed in this month. The pretreatment unit, much of the work is done, but there's about another month or so of work to get done there. While I was a bit disappointed with the rise in the budget, the project is well in hand, and we're getting towards the end, and I fully expect the pretreatment facility, like I said, to be turned over to operations in June. Great. Thank you. Maybe just 1 follow-up on capital allocation. You know, you talked about some of the moving pieces of environmental liabilities and things like that. You know, you have this inflow of $835 million coming in related to SPR. Your net debt negative, even after paying down a, you know, a good chunk of the environmental liabilities. You talked about staying near zero on net debt and also increase your authorization. It seems like generally we can expect most of that $835 million to go back to shareholders via the buyback. Just wanna make sure we're thinking about that correctly. Well, as we've been saying for some time, our balance sheet's our first priority, and we do have some additional initiatives that we could do address further strengthening of the balance sheet. You had mentioned, you know, potential retiring of inventory, financing agreements. We could also reduce long-term debt and then, of course, reducing the environmental payables over the next five or six quarters is gonna require some cash. Then, you know, we expect to continue and potentially increase shareholder returns through the dividend and share repurchase program. Also, you know, we think it's prudent to retain some cash for future potential opportunities that might come our way. Thank you. Okay. Operator? Yes. The next question is from the line of Neil Mehta with Goldman Sachs. Good morning to you. Congrats, Tom, and congrats to you as well, Matt. Wish you well in your new roles. The first question is just around the renewable diesel at Chalmette. As you think about the mid-cycle EBITDA associated with the 320 million gallons of production, you know, how would you frame that out? There are a lot of moving pieces since you first talked about that last year, so any update on the framework would be helpful. Yeah. You know, obviously, it's a fledgling business, and there's gonna be new market participants, and so you're gonna have a bigger call on feeds. What we saw in 2022 was an EBITDA margin for, you know, modeled to what our plant and the capabilities of our plant will be. Was an EBITDA margin of, you know, $1.25 to $1.50. I think in regards to the feedstock side, RD and what we'll extend to SAF has a distinct advantage over, you know, historical biodiesel plants. I think, you know, as the market evolves, you'll see feedstock shift probably from biodiesel plants to renewable diesel plants as the economics are much stronger. There's gonna be lots of puts and takes. you know, we modeled a base case that, you know, was below last year's levels, but, you know, are still very attractive for the investment and for the returns for the shareholders. Where it's gonna end up, my guess is it'll be below 2022 levels, but certainly I would expect going forward, your EBITDA margins are gonna be greater than $1 and hopefully much higher. That's helpful. Then, Matt, maybe can ask you just big picture. A lot of what you guys have orchestrated over the last couple of years have been preparing the balance sheet and setting some growth and capacity initiatives in place. Can you talk about, you know, how you think about the five-year strategic vision as you step into this new role? Thanks. No, I appreciate the question. I mean, the overriding principle is, you know, Tom and I have worked together for 13 years, and it's been incredibly a rewarding partnership, not for the company, just from a personal standpoint working with Tom. It's a strategy that we've working hand in hand in regards to building PBF up. Continuity will be a big theme, obviously. Tom and I have been lockstep in everything that PBF has done, over the last, you know, 13 years. Hopefully, it's my hope, and it is not to indicate that there's a lack of energy, but any change provides a new breath of energy. Obviously we're a refining company. That is not gonna change. Operations is the center of our universe. That's not gonna change. We do have some initiatives. SPR is one that's been in the works for a long time. We're just getting out of the gates now, which is very, very exciting. I think there's gonna be a lot of growth opportunities with our partnership with Eni there, not only potentially into new products, whether it's sustainable aviation fuel or it could be on the feedstock side. That will develop over time in connection with our partnership. I will say, with the partnership with Eni, it hasn't closed yet, but it's already started bearing fruit. Our renewable diesel team was over in Italy visiting both of their plants. We got to visit a plant in Sicily and in Venice. Very excited about that partnership, obviously. Beyond St. Bernard Renewables, we're in the sort of mid stages now, sort of beyond the early stages in exploring a hydrogen hub opportunity on the East Coast. We submitted an application with a consortium there, and so I think there's gonna be real opportunities there. We have this unique asset in Delaware City, where beyond being a hydrogen hub, you have, we're blessed with 5 times the amount of real estate that our refinery sits on, sort of in surrounding areas. As that project, if it's able to move forward, I think the opportunities will be manifest. As Karen said, that we're in, you know, volatile, you know, markets and maintaining a rock-solid balance sheet with terrific liquidity, opportunities will pop up. To the degree we feel like we can grow the company and reward shareholders, we'll certainly try to do that. All right. Great. Thanks for that. Thank you. Our next question is from the line of Matthew Blair with Tudor Pickering Holt. Please proceed with your questions. Hey, good morning. Matt and Tom, congrats on the new roles. I wanted to follow up, I think it was Karen's comment where you talked about, it was prudent to retain cash for future ops. Could you expand on that a little bit more? I guess, should we take that to mean that PBF would be potentially interested in looking at, you know, future refining acquisitions? It's Matt. You know, I think it's always prudent to maintain some flexibility, especially when you're entering volatile markets. There's nothing planned. We look at everything that comes up. Obviously, you know, there's been activities over the last year where refineries have come for sale and haven't been able to find a buyer and are going away. We will evaluate every opportunity that is in front of us. Generally speaking, if there's periods of volatility, opportunities usually come up. We've said it before, we'll say it again, or we sort of say it till we're blue in the face. We are absolutely committed to maintaining a strong balance sheet. By the way, that's not just for the benefit of our bondholders. That goes directly to the benefit of our equity holders. Obviously, it lowers your cost of debt as you improve. It lowers your cost of insurance. It improves your trade credit. It introduces new shareholders, all of which, is profound in running our business. We wanna be opportunistic, but we're gonna stay debt disciplined, and we're, you know, we think we have a realistic view of what the future holds. We're very excited about it. Sounds good. Have you started to procure low CI feeds for the RD unit? If so, could you just talk about the availability? Are you looking at, like, U.S. feeds or international feeds? And do you expect the ENI partnership to help in this regard? Absolutely, we do. Look, they're already in the business. From a just, I don't wanna get too deep into the weeds, but, you know, for the first couple months of operations, we're going to be running low CI feeds. We've been focused on lining up those feeds for the renewable diesel unit. As we get closer to pretreatment startup, we'll start layering in those lower CI feeds. You know, look, this is where it's similar to a refining business or a traditional petrochemical or a petroleum refining business, in that we're a merchant renewable diesel manufacturer, and we're gonna go out and procure the most economic feeds that are available at any given time. There will be volatility in those markets, and we'll be as quick and entrepreneurial as we can in shifting between the feeds. There's no question, on the feed side with ENI, where they're already in the marketplace. They've been investing, in the upstream in regards to feeds, and they have access to some very interesting opportunities, but it also extends to the product side. I'd say there's a reasonably high probability, in the, you know, not too distant future, once we're up and running, that we could see, products going into Europe. There's no question they'll be adding value to our operation, as we execute that business. Great. Thank you very much. Thank you. Our next question is from the line of Paul Cheng, Scotiabank. Please proceed with your question. Thank you. Good morning, Tom and Matt. First, let me add my congratulations. Tom, are you sure that you're ready that you spend all this time in the golf course? You're too young. Sorry? Spend all his time on the golf course. Oh, on the golf. I'll tell you, Paul, I haven't played golf, a round of golf in three years. I'm not gonna spend all the time on the golf course, but I'm going back to the golf course. But I'll remain as Executive Chairman, involved in the business. I've got too much committed. My general counsel sitting across me reminds me on occasion that I am the largest private shareholder in PBF's in my blood forever. All right. Matt, just curious that some of your peers that after they sum up their RD projects, they realize that they don't have sufficient hydrogen. Could you talk about what's the situation in Chalmette? Also that a lot of the feeds is high acidic, and that has been pretty nasty to the catalyst and the machine itself. That how you guys going to safeguard on that? The second question is that strategically that I think California is interesting, right? I mean, on one hand, the shutdown of those facility is probably going to make at least the near term or that for the next couple of years margins to be good. At the same time that the regulatory and the government attitude is maybe very challenging. I guess my question is that if there's a asset in California, good asset to be on sale, if the price is right, strategically, do you guys still want to add to your position in California given the regulatory environment and the government attitude? The short answer is no. We look at everything, but I don't think we get approval to buy another asset in California given that we've got Torrance and Martinez already. Paul, as I said, we look at everything, but I would doubt that that would be something that we could effectively do, even if something came on the market. Yeah. There's no question about that. In regards to hydrogen. Look, one of the benefits of being located in the Gulf Coast, hydrogen simply won't be a problem for us. It's something that we recognized early on. It's something that we signed on for well in advance. There's abundant supply of hydrogen and it really does go to one of the competitive strengths of being located down in the Gulf. In regards to feeds and we've talked a lot about internally, obviously, and I know it's been a focus for, you know, all of all of you guys looking at the company. We've worked very, very hard in recognizing where others have stumbled out of the gates. We've tried to bake in all those lessons that, you know, that have been learned over time. Jim, would you add anything in regards to the specific low CI feeds and the preparation we did in getting our equipment ready for that? Well, you know, the low CI feeds that we're gonna bring in will benefit us once we get the pathways approved in through California specifically. We'll have provisional CI scores for the facility initially, but as we go through the pathway process in California, which we're well underway, we'll be able to fully realize those in the future when they get approved. Hey, Matt, or Karen, can you remind us that what's the remaining CapEx spending in the second quarter, for the SBR project to finish and including the pretreatment unit? I'm sorry. There's two different questions. In regards to the pretreatment unit, You know, the project will end up being, you know, $675 million. You know, $675-$700, if you wanna ban it, is where the total RD facility project's gonna be. In regards to the Torrance work, I don't know that we've given out specific turnaround budgets for, you know, any one project. The Torrance work in the second quarter, though is not as significant as what we're gonna do in the third and fourth quarter in Torrance. Torrance, When we took Torrance over, of course, you all are aware that with the precipitator explosion that Exxon was down for a while, and they did an extensive overhaul and turnaround on that cat cracker. I will tell you, I have never seen a cat cracker run for as long as the Torrance cat cracker ran. It's finishing up in the fall, a 7-year+ run. The one in the second quarter is not gonna be material. Do you remember how much of that we have left on the PTU or the RD project? It's probably about $1.40-$1.50 in the quarter. In the quarter. The whole quarter, but some of that has already been spent. Yeah. All right. Thank you. Thank you. Our last question is from the line of Jason Gabelman with Cowen and Company. Please receive your questions. Hey, thanks for taking my questions. Paul and Matt congrats on the new roles and best of luck. First I wanted to go back to the balance sheet 'cause it's certainly a focus for us and I believe investors. You know, you discussed keeping debt to cash equal. The overarching question is, at what point does that framework change? Is it when you reach investment grade rating? Is it when you reduce the environmental liabilities? I guess tied to the environmental liabilities, are the RIN obligation that you're gonna pay down the...? Is there gonna be a transfer cost mechanism between kind of the biofuels plants and I guess, paying down the environmental obligations? Is that gonna be at market price or are you gonna recognize that at something different? Thanks. Yeah. I can take the last piece for sure, which is PBF, you know, we have a pure partnership with ENI. The financials from SBR will be, you know, pure market-based, you know, everything at market prices. That being said, PBF will acquire the RINs from SBR as they are produced, which will be, you know, will essentially bring insulate benefits to PBF in that we're not gonna be in the marketplace acquiring those. It's a true joint venture and it's at a market joint venture, so there's not any subsidy there to speak of. Got it. Yeah. With respect to cash balances and all of the balance sheet initiatives, you know, as I said in my prepared remarks, we're given heightened market volatility, and as we pursue investment grade ratings, we intend to maintain this near net debt zero target. Then after that, it's going to be pretty much market conditions and operations dependent. It's hard to say. I mean, nothing is static, obviously. We have a couple things that we want to address. Quite frankly, we wanna sit down with the rating agencies and have a frank conversation with them and understand their perspective. As Karen said, we live in volatile times. It's hard to imagine, over the last three years, sort of the volatility that we've gone through. We'll continually assess, you know, what's best for the company and by extension, obviously the shareholders. All right. Based on your conversations with the ratings agencies, do you feel like you're close to getting that investment grade rating? I can't assess what their timing is, but I can assess what our balance sheet is, and I can, you know, certainly look at it, look at the metrics. There's no question that when you analyze the financial metrics, we are investment grade. Okay. my follow-up is, I'm gonna ask two since we're at the end of the call, if I may. The first, just a clarification that the OpEx guidance you gave last quarter, $8-$8.50 per barrel still holds for the full year. The other, just, you know, you've mentioned you would be interested, it sounds like in pursuing potential acquisitions, if they arise. Would it be a focus on single refining assets as you've done in the past, or would you be comfortable, acquiring, say, a system of refining assets as if they were to become available? Thanks. First, with respect to OpEx, the guidance we give is based on our annual budget and our annual budgeted throughput. There is some seasonality. Q1 is typically the highest because of energy costs. Second quarter tends to be the next highest. When we put that guidance out, natural gas was materially higher than it is now. Yeah. That will move. In regards to your acquisitions questions, I appreciate, you know, the desire to sort of get more and more sort of clarity. We don't know what's coming down or what will come down the pike. We look at everything. We've always said that. There's not a imperative that we must grow by any stretch. We're very pleased with the system we have. If opportunities come up, who knows what they will be? We'll certainly look at them and try to do the best for our shareholders. Great. Thanks for the answers. I appreciate it. Thank you. We've reached the end of the question and answer session. I'll now turn the call over to Tom Nimbley for closing remarks. Thank you for joining us today on today's call. As we have discussed, the markets will continue to be volatile and consumer demand will continue to be resilient. PBF remains in good hands. Our operating principles are unchanged. We are focused on operating safely, reliably, and in an environmentally responsible manner. In doing so, we will continue to provide our essential products to meet consumer demand. As we mentioned, our balance sheet is in its strongest condition ever, and we expect our operations and financial discipline will allow us to continue rewarding our investors. I look forward to speaking with you all again next quarter. Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.