Valero Energy to pay off $640 million of Premcor debt in 2008

By Jennifer Lanning Drey

Portland, Ore. Feb. 7 - Valero Energy Corp. plans to pay down approximately $640 million of high-coupon Premcor Inc. debt in 2008, according to slides presented Thursday by Bill Klesse, the company's chief executive officer, at the Credit Suisse Energy Summit in Vail, Colo.

The debt repayment is part of Valero's focus on maintaining a balanced approach to cash allocation under its long-term plan for increasing shareholder value. Other plans for cash usage include continuing the company's stock buyback program and a possible dividend increase in 2008, according to the slides.

In 2007, the company purchased 14% of its shares that were outstanding at the end of 2006 and raised the dividend rate by 50%.

The company's plans for creating additional shareholder value also include optimizing its refining portfolio, investing in organic growth projects, focusing on reliability and cost efficiency, and continuing to seek acquisitions that meet the company's criteria, according to the slides.

In 2007, Valero restructured its retail business and reorganized refinery accounting and procurement for pre-tax savings of an estimated $25 million per year. The company has also identified problems that led to unbudgeted downtime in 2007, which cost the company $2 billion in lost opportunity.

Based in San Antonio, Texas, Valero owns and operates 17 refineries in the United States, Canada and the Caribbean.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.