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CVR Energy Inc  (NYSE:CVI)
Q1 2019 Earnings Call
April 25, 2019, 1:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Greetings and welcome to the CVR Energy, Inc.'s First Quarter 2019 Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Mr. Jay Finks, Vice President of Finance and Treasurer. Thank you. You may begin.

Jay Finks -- Vice President of Finance and Treasurer

Thank you, Michelle. Good afternoon, everyone. We very much appreciate you joining us this afternoon for our CVR Energy first quarter 2019 earnings call. With me today are Dave Lamp, our Chief Executive Officer; Tracy Jackson, our Chief Financial Officer, and other members of management.

Prior to discussing our 2019 first quarter results, let me remind you that this conference call may contain forward-looking statements as that term is defined under federal securities laws. For this purpose, any statements made during this call that are not statements of historical facts may be deemed to be forward-looking statements. Without limiting the foregoing, the words outlook, believes, anticipates, plans, expects, and similar expressions are intended to identify forward-looking statements. You are cautioned that these statements may be affected by important factors set forth in our filings with the Securities and Exchange Commission and in our latest earnings release. As a result, actual operations or results may differ materially from the results discussed in the forward-looking statements. We undertake no obligation to publicly update any forward-looking statements whether as a result of new information, future events or otherwise, except to the extent required by law.

This call also includes various non-GAAP financial measures. The disclosures related to such non-GAAP measures, including reconciliation to the most directly comparable GAAP financial measures are included in our 2019 first quarter earnings release that we filed with the SEC.

With that said, I'll turn the call over to Dave.

David L. Lamp -- Chief Executive Officer and President

Thank you, Jay, and good afternoon everyone and thank you for joining us on our earnings call. Hopefully, you had the opportunity to listen to the CVR Partners earnings call earlier today. Yesterday, we reported the first quarter consolidated net income of $102 million as compared to $93 million in the first quarter of '18. EBITDA for the first quarter of '19 was $230 million compared to $205 million for the previous year, driven by safe reliable operations, wide Brent-WTI differential, rising crude prices, hedging gains, lagging crude oil differentials and improved fertilizer pricing.

We also announced the first quarter dividend of $0.75 per share, which will be paid on March 13th to stockholders of record on May 6th. On an annualized basis, our current dividend yield of $3 per share represents an industry leading dividend yield of approximately 7% based on yesterday's closing price.

Now I'll speak to some of the first quarter highlights from each of our business segments. For the Petroleum segment, both plants ran well and we safely completed the planned turnaround at Wynnewood on time and under budget. Combined total throughput for the first quarter of 2019 was approximately 213,000 barrels per day as compared to 190,000 barrels per day in the first quarter of '18. As a reminder, the first quarter of '18 was impacted by downtime associated with Cat cracker at Coffeyville, while the Wynnewood turnaround affected the current quarter.

Total liquid yield for the quarter was 98% consistent with prior year period. Our distillate yield as a percentage of total crude oil throughput was 44% in the first quarter of 2019, also consistent with the prior year period. Our distillate yield consistently ranked in the top quartile among the US independent refiners. In total, we gathered approximately 119,000 barrels per day of crude oil during the first quarter of 2019 as compared to 113,000 for the same period last year.

As we continue to shift our slate to crude oils gathered in our own backyard, we have increased our SCOOP gathering by approximately 40% relative to the first quarter of 2018, while decreasing our gathering activities in other regions.

Now turning to the Fertilizer business. During the first quarter, CVR Partners had a strong reliable operations at both facilities. Coffeyville's ammonia unit operated at 96% utilization for the first quarter, consistent with utilization for the first quarter of 2018. At East Dubuque, the ammonia plant operated at 69% utilization compared to 90% in the prior year adjusted for turnaround. We lowered the ammonia rate at East Dubuque during the first quarter to manage storage capacity levels at the plant due to a poor fall -- due to poor fall weather.

The Board of Directors of CVR Partner's general partner declared a first quarter 2019 distribution of $0.07 per common unit which will be paid on March -- on May 13th to unit holders of record of May 6th. As CVR Energy owns approximately 34% of the common units of CVR Partners, we will receive a proportionate cash distribution of approximately $3 million.

Now let me turn the call over to Tracy to discuss some of our financial highlights.

Tracy D. Jackson -- Executive Vice President and Chief Financial Officer

Thank you, Dave, and good afternoon everyone. Before I get into our results, I'd like to outline that during the first quarter of 2019 we revised our accounting for turnaround and presentation of EBITDA. We now will be capitalizing all of our planned turnaround costs in our Petroleum segment, and as a result, we will no longer be using adjusted EBITDA. Prior year amounts have been conformed to align with this new presentation. Management believes this presentation better aligns our financial results to how we evaluate our operations internally and better aligns with industry peers.

We reported consolidated net income of $102 million in the first quarter of 2019 as compared to $93 million in the prior year period. Diluted EPS was $1 for the first quarter 2019, compared to $0.69 for the prior year period. The effective tax rate for the first quarter of 2019 was 25.5% compared to 16.2% for the prior year period. The increase in income tax rate was due primarily to the decrease in non-controlling interest as a result of the first quarter equity transaction. We continue to expect that our full year 2019 effective tax rate will be between 20% and 25%.

I will now turn to the specific performance of our two business segments impacting our overall quarterly results. The Petroleum segment's EBITDA for the first quarter of 2019 was $209 million compared to $192 million in the same period in 2018. The increase in EBITDA year-over-year was driven by safe and reliable operations, wide Brent WTI differentials, rising crude prices, hedging gains and lagging crude oil differentials.

In the first quarter of 2019, our Petroleum segment's refining margins excluding inventory valuation impacts was $14.88 per total throughput barrel compared to $16.41 in the same quarter of 2018. The increase in crude oil flat price through the quarter generated a positive inventory valuation impact of $1.67 per barrel during the first quarter of 2019. This compares to $1.17 per barrel positive impact during the same period last year. The capture rate excluding the inventory valuation impacts was 86% in the first quarter of 2019, compared to 98% in the first quarter of 2018. Capture rate in the first quarter of 2018 benefited by approximately 20% related to the reduction in our renewable volume obligation.

The Group 3 2-1-1 crack spread averaged $17.26 per barrel in the first quarter of 2019 as compared to $16.67 in the first quarter of 2018. Crude differentials remain favorable during the quarter with the average differential between WTI and Brent remaining nearly $9 per barrel or over $4.50 per barrel wider than in the first quarter of 2018. The WCS differential to WTI tightened in the quarter to $10.51 per barrel, largely as a result of production curtailments imposed by the Alberta Government. This compares to an average WCS to WTI differential of $25.74 per barrel in the first quarter of 2018 with our capacity on multiple pipelines bringing Canadian crude oil into cushing. We were able to capitalize on the WCS differentials during the quarter by selling those barrels to third parties for higher margin than we would have earned running into our system.

Although WCS differential tightened recently, pipeline capacity out of Canada remains constrained and we currently expect to see differentials begin to widen out again in the second half of 2019. Gains on Canadian crude oil positions for the first quarter of 2019 totaled $16 million, which includes unrealized losses of $7 million associated with open purchases that are scheduled for delivery in the second quarter of 2019. In the first quarter of 2018, we had total derivative gains of $59 million, of which $46 million was unrealized at the end of the prior year period.

Rents expense in the first quarter of 2019 was $13 million or $0.68 per barrel of total throughput as compared to the benefit of $23 million or $1.35 per barrel of total throughput in the same period last year. Based upon recent market prices of rents and current estimates of production rates, we currently estimate that our rents expense will be approximately $60 million to $70 million in 2019, excluding any potential reductions in renewable volume obligation.

The Petroleum segment's direct operating expenses were $4.75 per barrel of total throughput in the first quarter of 2019 as compared to $5.39 per barrel in the prior year period. The decrease was primarily associated with lower personnel expenses and higher total throughput volumes as the first quarter of 2018 was impacted by downtime at Coffeyville.

Now turning to our Fertilizer segment. For the first quarter of 2019, CVR Partners reported operating income of $9 million, a net loss of $6 million or $0.05 per common unit, and EBITDA of $26 million. This is compared to operating losses of $3 million and net loss of $19 million or $0.17 per common unit, and EBITDA of $13 million for the first quarter of 2018. The approximate 100% increase year-over-year in EBITDA was primarily due to the improved pricing of 14% and 45% for ammonia and UAN respectively.

Turning to the consolidated balance sheet. Total consolidated capital spending for the first quarter of 2019 was $29 million, which included $26 million from the Petroleum segment and $3 million from CVR Partners. Of this total, environmental and maintenance capital spending comprised $26 million, including $23 million in the Petroleum segment and $3 million in CVR Partners.

We currently estimate the total consolidated capital spending for 2019 to be approximately $210 million to $240 million, of which approximately $150 million to $175 million is environmental and maintenance capital. This includes planned turnaround spending -- this excludes planned turnaround spending for the year, which we estimate will be approximately $48 million.

Our cash position remain strong as we ended the quarter with cash of approximately $467 million on a consolidated basis, which includes $97 million at CVR Partners. As a reminder, the equity transaction that we completed in January resulted in the use of cash during the quarter of approximately $300 million. We feel confident in our strong balance sheet and liquidity position.

Looking ahead, we estimate our total throughput for the second quarter of 2019 to be approximately $217,000 to $227,000 barrels per day. We expect total direct operating expenses for the second quarter to be approximately $85 million to $95 million and total capital spending to range between $35 million and $40 million.

With that Dave, I will turn the call back to you.

David L. Lamp -- Chief Executive Officer and President

Thank you, Tracy. In summary, we are proud of our strong results for the first quarter of 2019. Our mission continues to be a top-tier North American petroleum refiner and fertilizer company as measured by safe, reliable operations, superior financial performance and profitable growth.

Looking at 2019 and beyond, we currently see a host of market themes that drive our constructive outlook. First, global oil demand is strong and new worldwide refining capacity has been delayed. In the United States, gross domestic product growth is healthy and gasoline demand is steady, driven by low unemployment. IMO 2020 is currently on track for January implementation and we view the new regulations as positive for both gasoline and diesel.

The Brent TI differential remains healthy, driven by ever growing domestic shale oil production and decline in crude -- corn inventories frame improving outlook of our Fertilizer businesses. Nitrogen fertilizer represents about 50% of a farmer's cost structure and significantly improves their yields. We believe CVR Energy is well positioned for 2019 and beyond.

On our last call, I outlined our strategic objectives for 2019. A recap of those objectives are: continued improvement in all environmental, health and safety matters; safety is our number one priority; and safe operations, result, and reliable operations.

Profitable growth of our crude gathering and logistics systems by purchasing local crudes in our backyard and building out our pipeline system to supply our refinery operations continue to increase our internally generated RINs and reduce our rent exposure. This includes increasing biodiesel blending, as well as continuing to explore building the wholesale and retail business. Increased liquid yield at our refineries execute our turnarounds on time and on or under budget and prudently manage our costs.

In support of these objectives, we have a number of initiatives that we are progressing as previously discussed on our fourth quarter 2018 earnings call. A recap of those initiatives are: increased liquid yield at Wynnewood by completing the design and evaluation of a new isomerization unit and which will increase our production of premium gasoline and improve capture rate. We have also started Schedule A process design to replace our hydrofluoric acid catalyst in our Wynnewood alkylation with a solid catalyst. This project is also expected to increase production of premium gasoline at Wynnewood. Increase our natural gasoline processing and WCS capacity to 40,000 barrels per day through phase projects at Coffeyville refinery. If approved, all these projects I listed above by our Board, we'll have expected returns of 30% or higher. Complete the sale of our Cushing, Oklahoma tank farm as it is an underutilized asset for us, and install an oxygen source system at the Coffeyville fertilizer plant.

As a reminder, we have approximately $50 million to $60 million of profit improvement projects in our capital budget that would require additional approvals by our Board. We continue to develop these initiatives and as I move forward I'll provide updates.

As we look at the second quarter of 2019, Group 3 cracks have averaged approximately $21.34 and the Brent TI spread has averaged $7.37 quarter-to-date. These market drivers remain strong, and yesterday they were approximately $21 per barrel on the Group 3 cracks and $8 per barrel on the Brent TI spread. Brent prices has continued to decline with ethanol averaging $16 or $0.16 per quarter to-date, down $0.20 -- down from $0.20 in the first quarter and the biodiesel RINs are a bit averaging $0.37 quarter-to-date, down from $0.51 last quarter.

With that operator, we're ready to take questions.

Questions and Answers:

Operator

Thank you. We will now be conducting a question-and-answer session. (Operator Instructions) Our first question comes from the line of Prashant Rao with Citigroup. Please proceed with your question.

Prashant Rao -- Citigroup -- Analyst

Hi, good afternoon. Thanks for taking my question. I wanted to start on the crude side. I had a couple of questions about the Canadian heavy, and then also on Midland, but maybe starting with the Canadian heavy. If you could remind us your total -- what is your total access stand versus what you ran in the quarter? I'm trying to get a sense of how strategic you were able to be in terms of selling barrels into the market in the quarter and may be idea kind of a magnitude of how much the margin was and profit was on those barrels?

And then secondly, how much might be left given that this is a 60-day lag? What's your inventory sort of right now or is that pretty much done, given the -- now the differentials have tightened up. So some color there? And then I repeat on the -- I think I just missed it and I'm sorry about that, but the $16 million number that Tracy, you called out related to this, just wanted to sort of get those numbers again?

David L. Lamp -- Chief Executive Officer and President

Okay. On the WCS capacity, what we have is line space for about 35,000 which we could prorate it typically to around 30,000. We took -- typically don't run much -- any of -- any at all of WCS in our plants, because it's more profitable, solid and cushing. That price has been very strong lately. We do run some just in order to keep our crude rates and higher rates in the Coffeyville facility and probably averaged around 3% of the slate. With that said, I forgot the rest of your questions.

Prashant Rao -- Citigroup -- Analyst

Sure. Absolutely. So I just wanted to -- so that's helpful. I was understanding how much was sold in 1Q. I guess, is there in terms of barrels that you still have to sell that could be profitable given that it was a 60-day lag on average, is there more benefit? I think you mentioned that in the prepared comments into 2Q or is that -- so now that the differentials have tightened is that kind of behind us and think about how you're going forward into 2Q sort of tailwind you could get for that WCS, it doesn't make more sense to run it now?

David L. Lamp -- Chief Executive Officer and President

No, it's still profitable to sell it today. As the prices compressed, the price we get in Cushing is also has gone down dramatically. So today, we're trading -- WCS is trading in the 20 -- $12.50 range. With that, with about a $6 freight to get it to Cushing. We can still sell it at a couple of bucks profit in the Cushing market and that needs what we can do in the plan.

Prashant Rao -- Citigroup -- Analyst

Okay. That makes sense. And that 60 day lag, is that usually -- and forgive me if you've already mentioned this before, but is that usually been the lag or...

David L. Lamp -- Chief Executive Officer and President

Yeah, it's 60 days plus.

Prashant Rao -- Citigroup -- Analyst

Okay.

David L. Lamp -- Chief Executive Officer and President

It can be -- that just depends on how the batches come.

Prashant Rao -- Citigroup -- Analyst

Okay, I have a question on the light sweet side, since you've got more of your sourcing at your own backyard in the SCOOP/STACK. Your Midland barrels, since those are on like a 30 day lag, we've seen mid cush differentials come in and now start to widen back out again. Would you be selling some of those Midland barrels to taking advantage of differentials as we get some volatility here now that you've got more SCOOP/STACK in the system and that's probably not as big as the WCS tactical opportunity you have, but curious if you're seeing some opportunity there given how the -- how does (ph) this have been moving over the last couple of months?

David L. Lamp -- Chief Executive Officer and President

Well, of course, the way we run our gathering business is such that we use that as an option to supply the refineries. We're buying on a Cushing basis, most of that gathering system, although we do have about 30,000 barrels of space on the -- historical space on basin pipeline, which does give us a modest amount of exposure to the Midland differential. But generally we use it as an option and we will either resell those barrels that we gather in Cushing or run them depending on what the best mix is. Our overall strategy and our overall gathering system is to buy barrels in our backyard exclusively, but also buy them at the wellhead and be very picky about what we buy and we want to -- be able to deliver and need to Cushing and get into our system either to Coffeyville or to Wynnewood.

Prashant Rao -- Citigroup -- Analyst

Okay. Has there been -- related to that, speaking of neat barrels, we've got some questions over the last month, month and a half from investors in the market about the new West Texas light, I guess, we think of more like a condensate barrel and that being a market for that and what kind of discount that goes through? I'm curious your thoughts about the dynamics of what that's doing for Midland pricing, what that could mean going forward as we get some -- maybe some price discovery between Permian grades. There is a sort of a view that all of this has to go to the water and ends up maybe in Asia being used as feedstock there -- given where you said, Tracy, curious to hear what you guys are seeing in the market and how do you think that develops?

David L. Lamp -- Chief Executive Officer and President

Well, it's starting to shape up as a three tier system out there. You've got the 38 to 42 API gravity crudes which are kind of the, what I'll call the WTI regular. And then you have another class, that's 43 to -- up to 48, 50. That's kind of the light. And then you got the ultra light that's 50 plus and those are -- those historically have not traded with a large discount between them, because a lot of them more get blended often in various ways, but that is all starting to come to an end. And you're starting to see just a good indicator is that WT light, but also as White Cliffs what's happening with that, it's -- that's widened out to $1.75 and that's as far as I can remember as one of the higher numbers in the market lease in the last three years.

So I think, ultimately these continue to spread as more and more lights are produced and they have less and less places to go. And that -- we are trying to capitalize on that strategy also, because our sweet spots are little different than others and we are able to make the same amount of diesel out of some of these crudes that others cannot. So we don't really have to have the heavy barrel, we don't have to have the light barrel.

Prashant Rao -- Citigroup -- Analyst

Okay. That makes sense. Last question and I'll turn it over. M&A environment, obviously, we're still pre IMO. So I would imagine that we don't -- the opportunity is not quite there yet, but I wanted to check with you on that and also sort of in the context of now we are seeing some upstream consolidation being integrated to getting involved and there are some questions about, will they need more downstream capacity to help with their integrated model? Does that change the picture at all? We've seen obviously what's going on with Chevron and Anadarko and Oxy, but there is an expectation that that shale value will be able to more upstream consolidation majors versus than the key players. Is there sort of a knock-on effect and what that means for the M&A environment for you guys?

David L. Lamp -- Chief Executive Officer and President

Well, I think we've stated before that we are probably not a consolidator but a consolidatee. I mean, I think we are a classic case of refining system that has 100% exposure to the Brent TI and we would be an excellent fit for somebody that needs to manage that risk and I think that there lies the attraction to these assets that -- and commands the premium that we get today in the marketplace. We -- nothing has changed on that front or we have not started a process yet or don't know if we will, but we will see what happens here in the future.

Prashant Rao -- Citigroup -- Analyst

And just very lastly, I just wanted to capture the number, Tracy, you went over it, but you called out on the WCS I think of $16 million in gain, could you just repeat those please?

Tracy D. Jackson -- Executive Vice President and Chief Financial Officer

Sure. We had gains on the Canadian crude oil positions in the first quarter of $16 million and that included unrealized losses of $7 million for open purchases that we will have delivered here in the second quarter. Did you want the prior year numbers as well.

Prashant Rao -- Citigroup -- Analyst

Yeah, just to compare things.

Tracy D. Jackson -- Executive Vice President and Chief Financial Officer

Sure. In the first quarter of 2018, we had total derivative gains of $59 million, of which $46 million was unrealized at the end of the prior year period.

Prashant Rao -- Citigroup -- Analyst

Perfect. Thank you very much. Appreciate all the color. I'll turn it over.

David L. Lamp -- Chief Executive Officer and President

Sure.

Operator

Thank you. And our next question comes from the line of Neil Mehta with Goldman Sachs. Please proceed with your question.

Neil Mehta -- Goldman Sachs -- Analyst

Hey team, Thanks for taking the time. Really good quarter here. And just wanted to build on you remarks, Dave, as you look to Q2. So when we clean out your 1Q results for one timer's, we kind of get to $0.80 (ph) something in EPS. And as you look at 2Q versus 1Q, obviously we're early in the quarter. Anything you would say that we should think about as incrementals or decrementals, because with the crack spread environment, one would think that 2Q set up pretty well?

David L. Lamp -- Chief Executive Officer and President

Well, I think the comment I'd make Neil is that, there were a lot of interruptions in the first quarter by others not us. Other than our turnaround that we -- I think we benefit from. If you look at the basis between the NYMEX and the Group, it was about as narrow as it's ever been in the first quarter. And I think we benefited strongly from that. Will that repeat? I mean, the basis has already spread out a bit just running right now, you see it in the -- the NYMEX is almost $23 and with the Group is $21. Where that will go, I mean, I think everybody is back up and running and making lots of gasoline. If demand doesn't pick up some more, there is probably some of that basis comes out, but also we're running into the driving season. So I'm pretty optimistic that it will turn around and the supply from the Gulf will come up into our -- in our markets like it usually does in the second and third quarter.

Neil Mehta -- Goldman Sachs -- Analyst

That's helpful. And I want to talk about the dividend here, you guys, again trading at a 7% dividend yield. Is the view that there is the potential over time for dividend growth as well or as long as you trade at this type of yield, we should just hold that sort of $3 dividend flat for the foreseeable future?

David L. Lamp -- Chief Executive Officer and President

Well, I think we're very comfortable with the $3 yield -- $3 dividend. I think we generate enough cash to support it for a long time as well as grow our business in some of these profit improvement projects. I think it's -- as a good way to reward our shareholders as it is for the increase in the dividend. So I think depending on how we do and what the Board approves that will determine what happens I think with the dividend going forward.

Neil Mehta -- Goldman Sachs -- Analyst

All right. Dave last question from me. Brent WTI, big debate about where it's going to evolve when all these Permian pipes come online and (inaudible) basin, crudes flow into the cushing, some of that could get diverted down to the Gulf Coast? Have you think about the outlook for Brent WTI on a normalized basis in transportation economics post the onslaught of all these Permian pipelines? What do you think the-- what do you think the new normal is?

David L. Lamp -- Chief Executive Officer and President

Well, I think I said in my comments -- my prepared comments that the ever increasing shale oil production. I don't think I see that changing, particularly was $65 crude. It's going to continue to grow. It will probably accelerate, although the E&P companies have seen to get a lot of capital discipline here lately, but that -- generally in my experience, they are drillers and they like to drill. So that tells me that our shale oil will come on.

As far as it manifest itself in the Brent TI, I think Neil, what you really have here is that as you continue to increase -- I think the takeaway capacity in the Gulf Coast is somewhere around 5 million, 5.5 million barrels a day. We're at 3 million -- 2.5 million, 3 million. You will see the Brent TI probably have to widen, maybe not widen but maintain where it is just to keep that flow growing and frankly all the Gulf Coast refiners are saturated with light crude, short of them building some new splitters or something. I don't see how that barrel will clear without reaching further into the world, further away, which to me tells me that the Brent TI stays pretty close to where it is or some even better to have some upside to them.

Neil Mehta -- Goldman Sachs -- Analyst

Okay. Let me sneak in one last one, I'm sorry. You talked about how you view yourself as a consolidatee and not a consolidator. Given the fact that you do trade at a premium relative to the other refiners as you said, why CVI not a logical consolidator?

David L. Lamp -- Chief Executive Officer and President

Well, I -- I just -- I don't know that I have a great answer for that. It's -- I think our shareholder structure such that there is some interest in moving on, although one of our primary shareholders is on this business for seven years and he is very happy with it and maybe very happy with -- living with it for another seven years. I don't know -- I think a little bit -- it just seems like the market is at a point where if you wanted to exit the business, it's not a bad place to be. So I think that's the way the logic is thinking.

Neil Mehta -- Goldman Sachs -- Analyst

Yeah. It makes sense. Thanks Dave.

David L. Lamp -- Chief Executive Officer and President

You're welcome.

Operator

Thank you. Our next question comes from the line of Matthew Blair with Tudor, Pickering, Holt & Company. Please proceed with your question.

Matthew Blair -- Tudor, Pickering, Holt & Company -- Analyst

Good morning, Dave.

David L. Lamp -- Chief Executive Officer and President

Good morning.

Matthew Blair -- Tudor, Pickering, Holt & Company -- Analyst

Circling back to this $16 million derivative gain in the first quarter relating to WCS. I was under the impression that a lot of your WCS hedges were set to roll off at the end of 2018. So I was curious, did you extend any of these hedges and can you provide any sort of details on, I guess, future volumes, the strike price and just the overall duration like this is -- is this going to be a continuing event throughout 2019?

David L. Lamp -- Chief Executive Officer and President

No, we're completely unhedged now. We did have 10,000 barrels a day I believe at $10.50 or that has expired at the end of '18 or somewhere in that neighborhood $10 I think. That is off now. But just by the nature of how we buy, there's a two month lag. So you do have some exposure there and I think we believe that's where a lot of this is coming from. Tracy, if you can...

Tracy D. Jackson -- Executive Vice President and Chief Financial Officer

I'll just remind you that we have the intermediation agreement that helps move a lot of our barrels and the buying and selling of those gets accounted for a little bit differently when we sell that barrel and don't run it through the refinery. So I very carefully use my words when I said, there were gains on Canadian crude oil purchases in the first quarter of this year and they were hedged gains and gains last first quarter.

Matthew Blair -- Tudor, Pickering, Holt & Company -- Analyst

Okay, that's helpful. And I was curious if you could offer any sort of loss profit opportunity from the Wynnewood turnaround. Normally it seems like that might have had a big impact just given it hit in the most profitable month of the quarter, but then, David, I think you said something where you started actually might have helped you in the quarter? Could you expand on that?

David L. Lamp -- Chief Executive Officer and President

Well I said it probably helped the industry because we were cut back at a time when gasoline -- when we started the turnaround, frankly, it was the perfect time. Gas cracks were in the toilet and as the turnaround progressed, they improved, which we didn't anticipate, but we're glad it happened. The fact that we took barrels off the market and where I was saying we contributed to the increase. I don't know that I view it as a lost opportunity because of the planned turnaround and that's something that frankly we wouldn't even calculate it that way. Our total lost opportunities for the refining sector was less than $9 million for the quarter. So it's a very good. From our standpoint, that's a pretty low number.

Matthew Blair -- Tudor, Pickering, Holt & Company -- Analyst

Okay, thank you. And then last question, I guess, probably for Tracy. Just on the CapEx guidance, I think you revised it to $210 million to $240 million. And then now with the new accounting system to capitalize turnarounds, should we add in that $48 million of turnaround spending into your CapEx number, so the final number looks more like, I don't know $260 million to $290 million, I guess.

Tracy D. Jackson -- Executive Vice President and Chief Financial Officer

So there were no revisions to our capital estimates for the year. I believe in your notes you didn't include the corporate amount. You were just adding petroleum and fertilizer together. So there the capital estimates from year-end to first quarter end have not changed. Turnaround being capitalized, we are not including that as a component of our capital spend profile. We will talk about that separately.

David L. Lamp -- Chief Executive Officer and President

Remember too, though, there is a lot of money in there for projects that we don't have final Board approval on top $50 million to $60 million as we mentioned. So make sure you factor that into your calculation.

Matthew Blair -- Tudor, Pickering, Holt & Company -- Analyst

Okay. But I guess just to be clear, the $48 million in turnaround spending, that's going to flow through the cash flow statement, right?

Tracy D. Jackson -- Executive Vice President and Chief Financial Officer

Yes.

Matthew Blair -- Tudor, Pickering, Holt & Company -- Analyst

Okay. Thank you very much.

Operator

Thank you. (Operator Instructions) Our next question comes from the line of Jay Tobin with Macquarie. Please proceed with your question.

Jay Tobin -- Macquarie -- Analyst

Hi guys. Great quarter. And I think most of my questions have been brought up, but I will throw one. It looks like Coffeyville ramped up its condensate volumes processed. Just with a lot of excess light moving around, just curious if there is driver in there that you opportunistically will take more or less condensate?

David L. Lamp -- Chief Executive Officer and President

Well, you remember, we have reversed Red River pipeline this last, I guess, it's really started up in the beginning of this first quarter at (inaudible). And with the turnaround at Wynnewood, we have the opportunity to move the substantial quantity of the SCOOP type barrels to Coffeyville where they were run. So I think that's what you're seeing in there.

Jay Tobin -- Macquarie -- Analyst

Got it. Great. Thanks for that.

David L. Lamp -- Chief Executive Officer and President

By the way it is our plan going forward. More and more of that is what you're going to see.

Jay Tobin -- Macquarie -- Analyst

Excellent. Thanks.

David L. Lamp -- Chief Executive Officer and President

You're welcome.

Operator

Thank you. We have reached the end of our Q&A session. I would like to turn the call back over to management for any closing remarks.

David L. Lamp -- Chief Executive Officer and President

Again, we'd like to thank you all for your interest in CVR Energy. Additionally, I would like to thank our employees for their hard work and commitment toward safe, reliable and environmentally responsible operations. We look forward to reviewing our second quarter results during our next earnings call. Thank you and have a good day.

Operator

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.

Duration: 39 minutes

Call participants:

Jay Finks -- Vice President of Finance and Treasurer

David L. Lamp -- Chief Executive Officer and President

Tracy D. Jackson -- Executive Vice President and Chief Financial Officer

Prashant Rao -- Citigroup -- Analyst

Neil Mehta -- Goldman Sachs -- Analyst

Matthew Blair -- Tudor, Pickering, Holt & Company -- Analyst

Jay Tobin -- Macquarie -- Analyst

More CVI analysis

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