Phillips 66 Announces 2013 Capital Program And Intent To Form MLP

Phillips 66 (NYSE: PSX) will host its inaugural Analyst Meeting today in New York to update investors and analysts on plans to enhance returns, deliver profitable growth and increase distributions to shareholders. Company executives will discuss Phillips 66’s strategy to capitalize on the North American oil and gas production revolution through its formation of a master limited partnership (MLP), $3.7 billion total capital program, and increased use of advantaged feedstocks. With a geographically-advantaged portfolio of refining and marketing (R&M), midstream and chemicals assets, Phillips 66 is uniquely positioned to benefit from these developing market opportunities.

In support of growth and value creation, Phillips 66 intends to contribute a portion of its transportation assets to form an MLP. The company is evaluating assets for contribution to the MLP, which may include certain product and crude pipelines and terminals, rail cars and other rail infrastructure, as well as natural gas liquids (NGL) assets. A registration statement for an initial public offering (IPO) is expected to be filed with the Securities and Exchange Commission in the second quarter of 2013. Subject to market conditions and final approval by Phillips 66’s board of directors, the company anticipates selling a minority interest in the MLP in an IPO in the second half of 2013. Phillips 66 expects the offering to raise approximately $300 million to $400 million of gross cash proceeds.

“We expect to use the master limited partnership as an efficient vehicle to fund growth investments in the transportation and midstream sectors,” said Phillips 66 Chairman and CEO Greg Garland. “We believe the proposed MLP will enable us to enhance value for our shareholders and increase the transparency of our business.”

Phillips 66’s 2013 planned capital program is $3.7 billion. This includes Phillips 66’s portion of planned capital spending by DCP Midstream, Chevron Phillips Chemical Company (CPChem) and WRB Refining totaling $1.8 billion, which is not expected to require cash outlays by Phillips 66. The other $1.9 billion represents Phillips 66’s consolidated investments in R&M, Midstream and Corporate and Other. The 2013 capital program represents a 6 percent increase over expected 2012 capital spend of $3.5 billion.

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