James Rhame: Yeah. So this is James. Thanks. I’ll answer that question. Our costs are competitive. If we go in comparison on a per barrel basis, we’re continuing to look at that and we’ll always look at what our costs are, as a one refiner site and without some of the conversions, we have we believe this cost us competitive, if we go back to the history of the site. With RD what will occur on that per barrel basis, we may split the pie up as the RD once it’s up it takes its share of the cost of the site. But the size of the pie will not change. It will be the same amount with both the RD operating now as a separate business and we will bifurcate it in that manner. Does that answer your question?
Ben Cowart: So I’ll add just to make sure it’s clear. We already carry the burden of running the hydro cracker in those costs. As we bring RD on, we don’t anticipate our operating cost to change very much. It will be kind of bifurcated as we discussed earlier.
Amit Dayal: Yes. Thank you. It’s clear now. Thank you. Appreciate that Ben and James. Just with respect to the RD another question I have is, are we deploying the pretreatment unit in this initial ramp, or is that coming later? And if it’s coming later, what’s the time line for that and CapEx et cetera that you expect to incur related to that?
James Rhame: Yeah. Thank you. This is James again. I’ll answer that. We’ve been looking real hard at pretreatment and how does it fit and what is the best path forward for that. However, in this process of our investigation, we have found a commercial arrangement with pretreatment facility this at a cost below our capital hurdle rate. And even though it’s not settled yet, we believe it’s a path towards settling that commercial arrangement that would tell us we would not have to be economically best for us not to invest in a pretreatment facility as of today.
Amit Dayal: Okay. Is this local to you guys, or are you getting it from another state or something?
James Rhame: Yeah. And there’s actually two of these facilities. They’re relatively local to our mobile refinery.
Amit Dayal: Okay. Understood. Just one last one for me. Congrats on the sale on the UMO business. Just wondering what is remaining of that business. And what do you expect to do with anything that is remaining for the UMO side of things?
Ben Cowart: Yeah. So thank you Amit for coming into the call and just the coverage work and what you guys are doing over the years. So we’re very pleased with the sale of Heartland. We’re very excited about our legacy business that remains, its 3x bigger. It may be a little more than that than what we were doing at Heartland and various dating to what we are focused on in the Gulf region. So we will continue to combine our Mobile operations with all the work that we’re doing on our UMO collections in refining. And so we see some real synergies and upside as we move that business forward. So it’s just refining that’s our focus to the Gulf. And really focused — continue focus on low carbon products and the molecules that come from our legacy business are becoming more and more valuable. So we’re going to really dial that business in.
Amit Dayal: Understood Ben. Thank you so much. That’s all I have.
Ben Cowart: Thank you.
Chris Carlson: Thank you.
Operator: And our next question comes from Michael Hoffman with Stifel. Please go ahead.
Michael Hoffman: Hey team Vertex. Thanks for taking the call. And I echo everybody’s comments. It’s nice to see this plant at its strides for you given some of the pumps initially. You have a working capital arrangement — sorry Ben go ahead.
Ben Cowart: I just want to thank you. You’ve been here a long time in fight with us. So I was looking forward to sharing this moment with you and appreciate all the work you’ve done.
Michael Hoffman: Yeah. It’s been 15 years, Ben.
Ben Cowart: Yeah, I was — so go ahead with your question. I apologize to interrupt.
Michael Hoffman: Okay. No, not at all. You have a working capital arrangement with Macquarie that hasn’t kicked in yet. What needs to happen next for that to kick-in? And then when it does some of that 75 — of the $85 million net proceeds, you’ve got $74 million you’re using for working capital. Can I peel that back and that goes to paying down more debt and get some more of that 15% money off your balance sheet?
Chris Carlson: Yeah. Hey Michael, it’s Chris. So yeah, we’re — I mean we’re in probably the 50-yard line of working through the next agreement with our lenders for the soybean oil products. It should be a lot simpler than the first one. As far as cash, once we get into that deal, yes, we will have a little bit more cash that will come back to us. And the use of that are going to be to continue to finish out the RD project, which is almost done. And then as noted, we’ll focus on a healthier balance sheet and we will look at opportunities where we can to reduce debt.
Michael Hoffman: Okay. I mean at 15%, you’re really in the cost of equity territory. So it would be nice to see that come down. Q-on-Q sequentially from 3Q to 4Q, there’s a $34 million reduction in inventory. Can you talk us through what was going on there? And what should we see as the trend for 1Q versus 4Q?
Chris Carlson: Yeah. The real story there in the inventory is the value. The cost of the commodities, Brent, diesel, et cetera came down what $10, $15 a barrel. So that, obviously, reduced the financing requirements quarter-over-quarter?
Michael Hoffman: Okay. So it wasn’t a drawdown on it as well physically, so actual volume drawdown. So total volume is consistent just the underlying mark-to-market has changed.
Chris Carlson: Yeah, it’s just the dollars involved. That’s right.
