“Phillips 66 is well positioned to manage through the challenging environment with our high-quality, diversified asset base and strong balance sheet,” said Greg Garland, chairman and CEO of Phillips 66. “Our top priorities remain the well-being of our employees, our communities, and safe and reliable operations. We are taking action to maintain our financial strength to ensure security of our dividend, execute capital growth projects that are near completion, and maintain our strong investment grade credit rating. We remain focused on disciplined capital allocation and creating long-term value for our shareholders.”
The company is taking the following actions:
- Reducing 2020 consolidated capital spending by $700 million to $3.1 billion.
- Capital spending net of cash capital contributions from joint venture partners (“adjusted capital”) is now expected to be $3.0 billion. This reduction in adjusted capital from the $3.3 billion budget reflects a $700 million reduction in our consolidated capital spending, partially offset by a $400 million reduction in cash capital contributions anticipated from DCP Midstream.
- In Midstream, the Red Oak Pipeline and Sweeny Frac 4 projects, as well as Phillips 66 Partners’ Liberty Pipeline, will all be deferred. Phillips 66 Partners has also postponed its final investment decision on ACE Pipeline. Phillips 66 does not expect DCP Midstream to exercise its option to participate in Sweeny Fracs 2 and 3 in 2020.
- In Refining, the company is deferring and cancelling certain discretionary projects.
- Reducing operating and administrative costs by $500 million in 2020.
- Temporarily suspended share repurchases effective March 18. Share repurchases during the first quarter of 2020 were approximately $440 million. Phillips 66 will evaluate timing to resume share repurchases.
- Secured a new $1 billion, 364-day term loan facility. This facility provides additional liquidity and financial flexibility in addition to the existing $5 billion revolving credit facility. Phillips 66 Partners has a $750 million revolving credit facility.
“We will continue to closely monitor market conditions and evaluate the impact on our portfolio. 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,” said Garland.
The company will host a conference call on March 24 at 9 a.m. EDT to discuss these actions. To access the call, go to the Phillips 66 Investors site, www.phillips66.com/investors, and click on “Events and Presentations.” A replay of the call will be archived on the Investors site approximately two hours after the live call, and a transcript also will be available at a later date.
NOTE: this is NOT the complete release.