By the OGJ Online Staff
HOUSTON, Nov. 5 -- Frontier Oil Corp. Monday announced record quarterly net income for the 3 months ended Sept. 30 of $34.7 million, or $1.27/share, compared to $10.1 million or 36¢/share, in the third quarter of 2000.
For the 9 months ended Sept. 30, net income was $118.1 million, or $4.32/share, compared to $35.9 million, or $1.29/share, in 2000. The impact of inventory accounting used by Frontier on quarterly earnings was $2.5 million, or 9¢/share on a first-in-first-out basis. The year-to-date inventory impact was a negative $11.5 million or 42¢/share.
Jim Gibbs, Frontier chairman, president, and CEO said, "After weak product margins in July, our markets strengthened until the tragic events of Sept. 11, after which margins deteriorated slightly. We achieved record run rates at both our Cheyenne and El Dorado refineries, allowing us to capture the benefits of the product markets.
"Importantly, our strong earnings and cash generation of the past 6 months enabled us to reduce our debt at a much quicker pace than anticipated while building our equity account, positioning us to take advantage of potential growth opportunities."
Total debt outstanding at Sept. 30 was $211.8 million, down from $220.5 million at June 30 and from $262.6 million at Dec. 31.
Frontier said its Cheyenne, Wyo., refinery recently received a permit from the Cheyenne Department of Environmental Quality allowing the capacity to be increased to 46,000 b/d, up from 41,000 b/d. Frontier said minor equipment upgrades will allow it to operate at the higher capacity within a few months.
Also, Frontier is applying to increase the permitted capacity of its El Dorado, Kan., refinery to 121,000 b/d, up from the current 110,000 b/d.