Phillips 66 Outlines Budget Cuts

Phillips 66 on Tuesday unveiled its plan for responding to the market downturn.
“Phillips 66 is well positioned to manage through the challenging environment with our high-quality, diversified asset base and strong balance sheet,” Greg Garland, the company’s chairman and CEO, remarked in a written statement. “Our top priorities remain the well-being of our employees, our communities and safe and reliable operations … We remain focused on disciplined capital allocation and creating long-term value for our shareholders.”
Garland noted the company is taking a series of actions to maintain its financial strength to ensure the security of its dividend, execute capital growth projects nearing completion and maintain its strong credit rating.
The plan includes reducing 2020 consolidated capital spending by $700 million to $3.1 billion, Phillips 66 stated. Elements of the capex cuts include:
- Deferring the Red Oak Pipeline and Sweeny Frac 4 midstream projects as well as Phillips 66 Partners’ Liberty Pipeline, and postponing the master limited partnership’s final investment decision for the Liberty Pipeline
- Deferring (by Phillips 66 Partners) the final investment decision on the ACE Pipeline project
- Deferring and cancelling certain discretionary refining projects.
Philips 66 noted that other elements of its budgetary action plan include:
- Cutting operating and administrative costs by $500 million this year
- Temporarily suspending share repurchases effective March 18 after having repurchased approximately $440 million in shares in the first quarter of 2020
- Adding liquidity and financial flexibility by securing a new $1 billion, 364-day term loan facility that augments Phillips 66’s existing $5 billion revolving credit facility.
“We will continue to closely monitor market conditions and evaluate the impact on our portfolio,” commented Garland. “We are prepared to take additional action as needed. During these times of uncertainty, the people of Phillips 66 remain fully committed to providing energy and improving lives.”
To contact the author, email mveazey@rigzone.com.
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Oil Outages in Gulf of Mexico Straining Tight Market
- Oil Price Rally Explained
- Energy Industry Opposes Inflation Reduction Act
- Goldman Sees USA Gasoline Prices Climbing Back to $5
- Shell Finds Gas Off Colombian Caribbean Coast
- Freeport LNG Withdraws Force Majeure
- Thousands To Protest UK Government Sanctioning Jackdaw Field
- USA Gasoline Price Drops to Under $4
- Lime Petroleum Buys Stake In Yme Field
- Cheap USA Oil Undercuts Middle Eastern Crude
- 88 Energy Makes 1 Billion Barrel Oil Announcement
- Oil Supermajors Continue to Hold Back on Investment
- USA Senate Passes Inflation Reduction Act
- W. Virginia Bans Five Banks From State Deals Over O&G, Coal Stance
- Oil Outages in Gulf of Mexico Straining Tight Market
- Brent-WTI Oil Price Spread at Highest Point Since 2014
- USA Drops Rigs
- Pioneer CEO Says Tax Bill May Crush USA Mom-N-Pop Oil Drillers
- Above Normal Atlantic Hurricane Season Still on the Cards
- USA Driving Season Labeled Major Disappointment
- Oil Prices Hit Levels Not Seen Since April
- Over A Quarter Of Turbines Installed On Formosa 2 Wind Farm
- Saudis to Hike Oil Price to Record
- 88 Energy Makes 1 Billion Barrel Oil Announcement
- Pantheon Hits Multiple Oil Reservoirs At Second Alkaid Well
- Analyst Gives Year-End Oil Price Warning
- Guyana Just Keeps On Giving As Exxon Makes Two More Discoveries
- American Drivers Grab $3.11-a-Gallon Gas in Mexico
- Guyana Going Big League With O&G Revenues To Pass $1 Bn In 2022
- Top Headlines: Ships Seized in Mariupol and More