NuStar reports record-breaking crude oil amount from Permian pipeline – San Antonio Express-News

San Antonio-based pipeline and terminal operator NuStar Energy L.P. reported a slight decline in second quarter profit, but the company reduced its debt and saw record-breaking amounts of crude oil flow through its Permian pipeline network.

NuStar posted adjusted profit of $57.6 million, or 19 cents per unit, in the three months ending June 30. That was down 9 percent from a year ago.

Over the past year, NuStar has sold eight storage terminals on the East Coast and one in Nova Scotia, resulting in lower earnings than a year ago, when the company still had those terminals in its portfolio. The company sold the storage terminals for more than $300 million and used the proceeds to pay down debt.

Revenue increased slightly to $430 million from $427 million. Its results were largely in line with Wall Street analysts’ expectations.

Brad Barron, NuStar Energy L.P. President and CEO, speaks Tuesday, April 22, 2019, during the company's annual meeting at the company's San Antonio headquarters.

Brad Barron, NuStar Energy L.P. President and CEO, speaks Tuesday, April 22, 2019, during the company’s annual meeting at the company’s San Antonio headquarters.

William Luther, Staff / Staff photographer

NuStar said it had debt of $3.18 billion at the end of June, down from $3.49 billion at the same time last year.

“We are pleased that our recent divestitures have enabled us to continue to move toward our stated goal of significantly improving our debt metrics and building our financial strength and flexibility,” President and CEO Brad Barron said in a statement.

The total throughput — or daily volume of fuel flowing through a pipeline — of NuStar’s 10,000-mile pipeline system declined nearly 3 percent from last year to 1.8 million barrels of crude oil and refined products. It attributed the decline to operational issues at customer refineries.

Still, NuStar’s Permian crude oil pipeline system handled a record 522,000 barrels per day, an increase of 16 percent from the same period last year.

The company’s pipeline business generated income of $101 million, up from $96.5 million a year ago.

“While overall U.S. oil production has faced supply chain and other challenges this year, our top-tier Permian producers have continued to successfully execute on their drilling plans,” Barron said.

NuStar’s storage terminals saw throughput of 396,000 barrels per day, a nearly 3 percent increase from last year. Income from the segment fell to $31.2 million from $46.2 million.

On the West Coast, NuStar operates an extensive pipeline network delivering low-carbon fuels such as renewable diesel and ethanol. The company recently expanded its ability to store and transport cleaner fuels, which “should further solidify the significant role that NuStar plays in facilitating California’s transition to low-carbon renewable fuels,” NuStar said.

It currently handles 87 percent of California’s sustainable aviation fuel, 21 percent of its renewable diesel and 13 percent of its ethanol.

The company declared a quarterly cash distribution of 40 cents per unit. NuStar’s distributed cash flow this quarter was $83 million, down 15 percent.

On Thursday, stock analysts at Wells Fargo and Barclays both set price targets of $18 per NuStar share.

NuStar shares closed Thursday at $14.89, down nearly 6 percent from Wednesday’s close.

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