Valero’s Revenue and Earnings Boosted by Eagle Ford Crude

Valero’s margins are being supported by growing production volumes in the Eagle Ford Shale. As the company upgrades its facilities to handle more Eagle Ford Shale Crude, expect these margins to grow. The light crude and condensate from the Eagle Ford is easier for refineries to handle. Eagle Ford is a more profitable option than heavy crude from South America. 

Stronger demand for its fuels and Valero Energy Corp.’s ability to purchase some crudes at a discount helped the San Antonio-based refiner post a 28 percent jump in net income in the second quarter.

Valero’s net income rose to $744 million, or $1.30 a share, compared with $583 million, or $1.03 a share, for the same period in 2010.

At Three Rivers, the company is spending about $10 million to enable the plant to process more crude oil from the Eagle Ford shale of South Texas. By year’s end, the 100,000-barrel-a-day plant is likely to process 60,000 barrels a day of Eagle Ford crude, said Lane Riggs, senior vice president of refining operations.

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Kenneth E. DuBose

Kenneth E. DuBose

Kenneth DuBose is the past President of Cheyenne Minerals Inc., an independent oil and gas operator. He began his energy industry career with ARCO Oil & Gas. Mr. DuBose then directed development of natural gas storage projects with Tejas Power Corp. He was a founding member of U.S. Minerals, (acquired by Torch Energy in 1999) a provider of internet based education for America’s mineral owners. Mr. DuBose holds a BS in Petroleum Engineering from Mississippi State University. He has served on various industry steering committees, non-profit boards, and is an active member of the Society of Petroleum Engineers, the National Association of Royalty Owners, the American Association of Professional Landmen, as well as being a Registered Investment Advisor. He writes on topics of oil and gas investing, wealth management and personal finance, having appeared in the Wall Street Journal, Kiplinger’s, Kiplinger’s Personal Finance, Houston Business Journal, Financial Advisor and various radio and TV outlets.