Vertex Energy names BofA Securities as financial advisor to assist with renewables strategy

Vertex Energy Inc. announced Oct. 16 that it has formally named BofA Securities Inc., previously Bank of America Merrill Lynch, as its strategic financial advisor to assist with the company’s renewable fuels and sustainable products growth strategy.

During this engagement, the company expects to review various potential strategic-transaction opportunities aimed at strengthening the balance sheet to support growth acceleration and asset development in line with Vertex’s forward trajectory as an energy-transition company.

“There can be no assurance that this process will result in any transaction,” the company noted.

Vertex has not set a timetable for the completion of this process and does not intend to comment further unless the board of directors has approved a definitive course of action, or it is determined that other disclosure is necessary or appropriate.

“Scaling our renewable fuels and sustainable products strategy is a top priority for us,” said Benjamin P. Cowart, president and CEO of Vertex. “As such, we are tightening our focus on strategic initiatives and considering options that optimally support our long-term vision. We believe BofA has the right tools and expertise to help us transition into this next phase of development for the company.”

The company cut the ribbon on its renewable diesel unit at its Mobile, Alabama, refinery this spring.

Initial production volumes of renewable diesel were planned to be between 114 million gallons and 143 million gallons per year (mgy), with volumes anticipated to subsequently ramp up to approximately 200 mgy upon installation of additional required infrastructure.

However, in October, Vertex shared that production rates of renewable diesel averaged only approximately 5,200 barrels, or just 218,400 gallons, per day—for the third quarter, “reflecting strategic rate optimization based on pathway development and current economic conditions,” the company stated.

At that rate, annualized production tops out at approximately 75 mgy.

Earlier this month, Vertex said it was continuing to advance the assessment and pathway-approval process for its feedstock-optimization strategy, which began in the second quarter of this year.

The company recently completed its internal quality-approval process for a combination of eight different feedstock blends and is currently awaiting evaluation and approval by the state of California.

“Our strong preliminary third-quarter operational results reflect the impact of facility-optimization initiatives,” Cowart said. “Our conventional feedstock-procurement strategy and yield-optimization efforts extracted substantial value for conventional finished products while our near-term focus on the optimization of different renewable-feedstock blends is steadily progressing according to plan.”