Restructuring meant new strategy and identity
TPate,HE founding date for Par Pacific is listed as 1984, but its president and CEO, William Pate, insists its true birth date is 2012. “It’s a completely different company,” said who has helmed the growth-hungry Par Pacific since 2015 and currently oversees a workforce of about 1,200.
Par Pacific emerged out of the 2012 restructuring of Delta Petroleum, an exploration and production company. The headquarters moved to Houston from Denver. With a single employee on the payroll, Par Pacific acquired a crude logistics and trading business as E&P operations became a footnote.
The company assembled an entirely new employee base, board of directors and a management team that set the strategy to acquire the guts of what Par Pacific is today — an energy and infrastructure business. Par Pacific now has a refinery in Wyoming and another in Hawaii that both feed gasoline and diesel into companyowned convenience stores as well as jet fuel and diesel to military bases.
The only asset left from its E&P days is a nonoperating investment stake in Laramie Energy, a natural gas producer in Colorado.
Now, Par Pacific ranks among the Chronicle 100 list of top public companies. Its record year in 2017 also resulted in its first appearance on the list of Fortune 1000. Adjusted earnings per share of $1.77 were more than four times the previous highest it ever recorded, in 2015.
The strong year led to an increase in book value of more than 20 percent, while it was able to reduce its debt by $56 million.
Par Pacific’s strategy is to acquire and operate energy and infrastructure companies that tie geographically to its refineries in what it calls complex markets: those remote to fuel providers where competition is limited.
In March, for example, the company acquired 33 Cenex Zip Trip convenience stores in Washington and northwestern Idaho, a bolt-on acquisition that extends its Rocky Mountain operations and provides an alternative outlet for its 18,000-barrelper-day Wyoming refinery, which it purchased in 2016.
Pate said the performance of Par Pacific’s 94,000-barrel-per-day refinery in Kapolei, Hawaii, was another solid contributor to its 2017 success. The refinery was purchased by Par Pacific in 2013 from Tesoro and is the largest in the state. It produces diesel, gasoline and marine fuel, but its most successful product is the jet fuel it sells to nearby military bases, such as Pearl Harbor, and to commercial airlines.
The company also owns a large retail business of 90 gas stations in Hawaii operating under the Hele and 76 brands.
Growth will continue to be the main driver for Par Pacific, Pate said.