Tesoro still managing business for cash conservation in quarter

By Jennifer Lanning Drey

Portland, Ore., April 30 - Tesoro Corp. continued to manage its operations and capital program to conserve cash during the first quarter, reporting less in capital spending for the period than previously expected, Bruce Smith, chief executive officer of Tesoro, said during its quarterly earnings conference call held Friday.

"Since excess capacity among U.S. refiners has limited margin expansion, our entire organization is focused on financial and operational excellence," Smith said.

The company had $290 million of cash and $1 billion available on its revolving credit facility at the end of the first quarter.

Capital spending, including turnarounds, was $99 million for the first period. The company now expects its full-year capital program, including turnarounds, to be in the range of $500 million to $525 million.

Tesoro remains committed to its improvement plan and expects to spend $60 million on quick-hit capital projects in 2010, Smith said.

The company also said it expects to generate $160 million to $170 million of EBITDA from its non-capital improvement program for the year.

Tesoro reported a first-quarter net loss of $155 million, compared to net earnings of $51 million in the first quarter of 2009.

Also during the call, Smith said Tesoro believes it has adequate property and business-interruption insurance coverage on its Washington refinery, which experienced a fire that fatally injured seven employees on April 2.

The company has temporarily shut down all processing units at the refinery.

Tesoro is a San Antonio-based petroleum refiner.

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