April 13, 2006
Refinery woes impact Maritrans
Maritrans Inc. (NYSE:TUG) today announced preliminary operating data for the first quarter of 2006.
The company says it expects to report approximately 108 days of out of service time for maintenance and capital projects during the first quarter of 2006.
This number includes 72 days that were forecasted in February 2006 as well as an additional 36 days of unscheduled maintenance primarily due to weather related barge repairs.
In the Delaware River refinery system, there were three refineries undergoing scheduled maintenance for a portion of the quarter and as a result lightering volumes delivered were down less than 2 percent from the fourth quarter of 2005 levels.
Based on the expected total out of service time, the fleet utilization for the first quarter of 2006 was approximately 79 percent compared to 77.1 percent in the fourth quarter of 2005 and 81.8 percent in the first quarter of 2005.
Maritrans also expects to report a total of 43.6 million barrels carried and 1,307 available days in the first quarter of 2006, compared to 41.7 million barrels carried and 1,220 available days in the fourth quarter of 2005 and 45.2 million barrels carried and 1,189 available days in the first quarter of 2005.
A portion of the increase in available days in the first quarter of 2006 is due to the addition of the M/V Seabrook midway through the fourth quarter of 2005.
Rates in the U.S. Jones Act spot market in the first quarter of 2006 averaged 14 percent higher than the first quarter of 2005 and, despite the reduced industry utilization, remained flat compared to the fourth quarter of 2005. Approximately 35 percent of Maritrans' fleet operated in the spot market during the first quarter of 2006.
Jonathan Whitworth, Chief Executive Officer of Maritrans, commented, "The unusual combination of events during the quarter caused scheduled refinery maintenance to be higher than expected. On a clean products yield basis, we estimate that the refining capacity decrease from the first quarter of 2005 to the first quarter of 2006 was equal to approximately 900,000 bbls./day of gasoline, diesel and jet fuel production, which was even higher than industry projections. PIRA Energy Group, an international energy consulting firm, reported that the amount of U.S. refinery capacity offline during the first quarter of 2006 was around 1.7 million bbls/day, which was above the originally scheduled level of 1.1 million bbls/day. While we anticipate that refinery maintenance will continue to be heavy through the second quarter, we expect market fundamentals to remain favorable in the second half of 2006 as a result of the expected demand for the company's transportation services and reduced supply of vessels. Longer term, we also remain optimistic on the Jones Act vessel supply and petroleum transportation demand fundamentals as well as Maritrans' position in the U.S. Jones Act industry."
Maritrans says the preliminary operating data released today may differ from its actual first quarter operating data and may not be predictive of the company's financial results, which are expected to be announced on Monday, May 1, 2006.