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January 2, 2017

Refining | 2017 Issue I

Refining Overview

Despite profit margin improvement since the start of 2017, the high cost of RINs led to an increase in operating expenses which more than offset the decrease in cost of goods sold.  Refiners’ inputs and products are both commodities, which means that the price they pay for inputs and the prices they receive for their products are generally determined by the market. Therefore refiners earn profits through generating efficiencies, increasing their market share, and producing higher margin goods.

Although the price of refined products has been somewhat down over the first half of 2017, crack spreads increased over the first half of the year giving the downstream markets optimism about the rest of the year to come.  Additionally, it is thought that the Trump administration will loosen some existing policies which are burdensome to the oil and gas industry.  Overall, the industry has consolidated in order to increase operating leverage.

The data presented in this report includes the most recently available information as of October 31, 2017.  This includes public company earnings metrics as of June 30 and information from the EIA as was available. 

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Bryce Erickson to Speak at Hart Energy’s 2026 Energy Capital Conference
Bryce Erickson to Speak at Hart Energy’s 2026 Energy Capital Conference
Mercer Capital is pleased to announce that Bryce Erickson, ASA, MRICS, Managing Director, will speak at Hart Energy’s 2026 Energy Capital Conference, taking place June 3-4, 2026, at The Post Oak Hotel in Houston, Texas.For more than 20 years, Hart Energy’s Energy Capital Conference has brought together energy executives, private equity leaders, investment bankers, institutional investors, and other financial decision-makers to discuss the deals, strategies, and market dynamics shaping the energy industry. This year’s conference will focus on capital deployment, M&A activity, institutional investment trends, and broader energy finance considerations.Erickson will participate in the panel discussion “Asset Valuations in a High-Price World: Separating Signal from Noise.” The session will examine how capital providers, lenders, and operators are valuing energy assets in today’s elevated commodity price environment while keeping long-term fundamentals in focus. Panelists will discuss valuation assumptions, decline curves, financing structures, return thresholds, and strategies for managing downside risk during commodity price cycles.Bryce Erickson leads Mercer Capital’s energy industry practice and has more than 25 years of experience providing valuation and financial advisory services across the energy sector. Since 1998, he has led approximately one thousand engagements involving oil and gas companies, mineral and royalty interests, oilfield services businesses, and related energy assets for purposes including mergers and acquisitions, tax planning, litigation support, financial reporting, financing, and strategic planning. Bryce regularly publishes on oil and gas industry topics through Mercer Capital’s Energy Valuation Insights blog and is also a contributor to Forbes.com’s Energy sector.Mercer Capital works with energy companies, mineral and royalty owners, oilfield services businesses, investors, attorneys, accountants, and financial institutions on a broad range of valuation and advisory matters. The firm provides business valuation, asset valuation, transaction advisory, financial reporting valuation, and litigation support services across the energy industry, helping clients address complex financial and strategic questions with independent, well-supported analysis.Through its participation in the conference, Mercer Capital looks forward to contributing to discussions around valuation discipline, capital markets activity, and long-term value creation in the energy sector. Additional information about Hart Energy’s 2026 Energy Capital Conference is available on their website: Energy Capital Conference
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