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Delek (DK) Hikes 2022 CapEx View, Lowers Q421 Throughput Target

Delek US Holdings, Inc. DK has released its capital budget for 2022, with plans to invest $250-260 million the following year.

DK expects to invest an additional $50 million in 2022, mostly on discretionary midstream and retail projects after initially forecasting $150 million of capital spending for 2021, which now grew to $200 million or more.

Growth in 2022 will primarily focus on expanding the Delek Permian Gathering business, which has high producer demand. For midstream expansion investments, DK expects to well exceed its internal 15% target rate of return criteria. Delek is also stepping up its retail expansion plans, with four new-to-the-industry sites set to open in 2022.

This Brentwood, TN-based DK chose to execute minor maintenance work at Tyler in the fourth quarter of 2021, deferring next turnaround activity until 2023. As a result, Delek's fourth-quarter refining throughput target is revised to 275-280 million barrels per day.

Also, last month, Delek declared in its 2020-2021 Sustainability Report that it intends to lower its Scope 1 and Scope 2 emissions by 34% within 2030. DK aims to be a pioneer in this critical energy transition while also delivering inexpensive transportation fuels that enhance the standard of living in the areas it serves.

Founded in 2001, Delek is an independent refiner, transporter and marketer of petroleum products. DK’s operations are organized into three reportable segments, namely Refining, Logistics and Retail.

Zacks Rank & Key Picks

Delek currently has a Zack Rank #3 (Hold). Investors interested in the energy  sector might look at the following stocks worth considering with a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Occidental Petroleum Corporation OXY is an integrated oil and gas company with significant exploration and production exposure. OXY is also a producer of various basic chemicals, petrochemicals, polymers and specialty chemicals. As of 2020 end, OXY's preliminary worldwide proved reserves totaled 2.91 billion BOE compared with 3.9 billion BOE at the end of 2019.

In the past year, shares of Occidental Petroleum have surged 99% compared with the industry's growth of 96.6%. OXY's 2021 earnings are expected to soar 151.4% from the year-ago reported figure. OXY has also witnessed eight northward estimate revisions in the past 60 days. In the third quarter, OXY achieved its divestiture target of $10 billion by inking a deal to sell off its interest in two offshore Ghana assets for $750 million.

PDC Energy PDCE is an independent upstream operator dealing in exploration, development and production of natural gas, crude oil and natural gas liquids. PDCE, which reached its present status following the January 2020 merger with SRC Energy, is currently the second-largest producer in the Denver-Julesburg Basin. As of 2020 end, PDCE's total estimated proved reserves were 731,073 thousand barrels of oil equivalent.

In the past year, shares of PDC Energy have gained 169% compared with the industry's growth of 108.6%. PDCE's earnings for 2021 are expected to surge 273.4% from the prior-year reported figure. In the past 60 days, the Zacks Consensus Estimate for PDC Energy's 2021 earnings has been raised 26.8%. Earnings of PDCE beat the Zacks Consensus Estimate in all the last four quarters, the average being 51.06%.

Phillips 66 PSX is the leading player with respect to operations like refining, chemicals and midstream in terms of size, efficiency and strengths. PSX’s operations include processing, transportation, storing, and marketing fuels and products worldwide. PSX is currently valued at $33.9 billion and offers a quarterly dividend of 92 cents.

PSX is projected to see an earnings surge of 532.6% in 2021 from the prior-year reported number. It has witnessed three upward revisions in the past 30 days. Phillips 66’s bottom line beat the Zacks Consensus Estimate thrice in the last four quarters and missed the same once. PSX currently has a Zacks Style Score of A for Value.




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