2 Texas refiners see their profits jump

SAN ANTONIO — Production companies continue to feel plenty of pain from sharply lower oil prices. But those crude prices have ushered in good times for independent refiners, including San Antonio’s Valero Energy Corp. and Tesoro Corp.

In the quarter that ended Sept. 30, Valero Energy’s net income jumped 30 percent in the third quarter, while Tesoro’s profit jumped 91 percent. Nation’s largest

Valero, the nation’s largest refiner, reported net income from continuing operations of $1.38 billion, the company said Wednesday. The company attributed the results to higher margins on the gasoline it makes, along with solid demand. Valero posted revenue of $22.6 billion, topping revenue estimates of $18.6 billion.

CEO Joe Gorder said in a statement that strong demand for Valero’s products has continued into the current quarter.

Favorable margins “were supported by strong demand during the quarter,” Gorder told analysts during a conference call, prompting Valero to run its refineries at an average 96 percent capacity.

Gorder said that so far this year, Valero has invested $1.7 billion back into the business. On Wednesday, Valero’s board OK’d a 25 percent increase in its quarterly dividend to 50 cents a share from 40 cents. And Gorder said Valero has more than doubled its share buybacks this year.

Analyst Roger Read of Wells Fargo Securities told clients in a note that Valero’s “increased devotion” to enhancing shareholder returns has allowed the company “to be among the leaders of the pack among independent refiners over the last 12 months and year to date.”

Valero’s stock closed at $63.42 a share, up 96 cents, on Wednesday. Favorable for 2016

Looking ahead, Gorder said there is “seasonal pressure” on margins now, but demand is strong, contributing to his favorable outlook for 2016.

In addition, two crude topping units at the company’s Corpus Christi and Houston refineries will be completed in the fourth quarter. The units will boost the plants’ ability to process light crude.

At Tesoro, the largest refiner in the Western U.S., net income from continuing operations jumped to $759 million, or $6.13 a share.