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Phillips 66 (PSX) Sets 2017 Capital Budget at $2.7 Billion
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Phillips 66 (PSX - Free Report) recently provided the capital budget for 2017 at $2.7 billion. According to the company’s estimates, $1.3 billion will be directed toward midstream growth and $0.9 billion will be allotted for boosting refining returns and supporting operating excellence. The impact of this news on stock price is yet to be seen. Phillips’ price chart reveals that it has outpaced the Zacks categorized Zacks sub industry Oil Refining & Marketing Market, year to date. Phillips 66 has risen by 6.6%, whereas the broader market has decreased by 3.5%. In Midstream, Phillips 66 intends to invest $1.5 billion in its Natural Gas Liquids (NGL) and Transportation businesses, with 85% targeted toward growth projects. The company plans to concentrate on the further development of its existing infrastructure as well as continued expansion of the Beaumont Terminal and investment in pipelines and other terminals.
Midstream capital comprises spending anticipated by Phillips 66 Partners L.P. (PSXP) of $437 million, including $56 million of maintenance capital. The partnership will put in expansion capital to support organic projects, such as the Bayou Bridge Pipeline, which will link the Beaumont Terminal with St. James, LA. The western leg of the pipeline was commissioned in Apr 2016, while the eastern leg – with service from Lake Charles, LA, to St. James – is scheduled to come online in the second half of the next year.
In Refining, the company proposes capital expenditures and investments of $905 million, with 65% for reliability, safety and environmental projects. Growth capital in Refining will be apportioned toward small, high return, quick pay-out projects, mainly to decrease feedstock costs and improve clean product yields. These comprise a project at the Billings Refinery to enhance heavy crude processing capabilities and yield improvement projects at the Bayway and Ponca City refineries.
In Marketing and Specialties, the company intends to invest $132 million of growth and sustaining capital. The growth investment reveals Phillips 66’s plans to keep expanding and boosting its fuels marketing business.
In Corporate and Other, Phillips 66 proposes to finance projects worth $112 million, mainly related to information technology and facilities.
Phillips 66’s joint ventures – Chevron Phillips Chemical Company LLC (CPChem), DCP Midstream, LLC (DCP Midstream) and WRB Refining LP (WRB) – are expected to fund proportionate share of capital spending of $1.1 billion. Including these equity affiliates, the company’s total 2017 capital program is estimated at $3.8 billion.
In Chemicals, CPChem is likely to invest in projects intended to capture cost-advantaged petrochemical feedstocks on the U.S. Gulf Coast. Phillips 66’s share of CPChem’s 2017 capital expenditures is anticipated to be $675 million. The funding will be utilized toward completion of CPChem’s 3.3 billion pound per year ethane cracker and two 1.1 billion-pound-per-year polyethylene facilities being constructed in the Gulf Coast region. The polyethylene facilities are anticipated to be commissioned by mid-2017, while the ethane cracker is expected to be brought online in the second half of next year. On completion, these facilities will boost CPChem’s global ethylene and polyethylene capacity by about one-third. Phillips 66’s expected share of DCP Midstream’s 2017 capital spending is $243 million, while its expected share of WRB’s capital expenditures is $135 million. Capital spending by these three joint ventures is anticipated to be self-funded.
SunCoke Energy posted a positive earnings surprise of 177.78% in the last reported quarter. It reported a positive earnings surprise in three of the four preceding quarters.
Suncor Energy posted a positive earnings surprise of 300.00% in the preceding quarter. It reported an average earnings surprise of 40.55% for the four preceding quarters.
Futurefuel Corp. posted a positive earnings surprise of 20.83% in the last reported quarter. It reported a positive earnings surprise in all of the four preceding quarters.
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Phillips 66 (PSX) Sets 2017 Capital Budget at $2.7 Billion
Phillips 66 (PSX - Free Report) recently provided the capital budget for 2017 at $2.7 billion. According to the company’s estimates, $1.3 billion will be directed toward midstream growth and $0.9 billion will be allotted for boosting refining returns and supporting operating excellence. The impact of this news on stock price is yet to be seen. Phillips’ price chart reveals that it has outpaced the Zacks categorized Zacks sub industry Oil Refining & Marketing Market, year to date. Phillips 66 has risen by 6.6%, whereas the broader market has decreased by 3.5%.
In Midstream, Phillips 66 intends to invest $1.5 billion in its Natural Gas Liquids (NGL) and Transportation businesses, with 85% targeted toward growth projects. The company plans to concentrate on the further development of its existing infrastructure as well as continued expansion of the Beaumont Terminal and investment in pipelines and other terminals.
Midstream capital comprises spending anticipated by Phillips 66 Partners L.P. (PSXP) of $437 million, including $56 million of maintenance capital. The partnership will put in expansion capital to support organic projects, such as the Bayou Bridge Pipeline, which will link the Beaumont Terminal with St. James, LA. The western leg of the pipeline was commissioned in Apr 2016, while the eastern leg – with service from Lake Charles, LA, to St. James – is scheduled to come online in the second half of the next year.
In Refining, the company proposes capital expenditures and investments of $905 million, with 65% for reliability, safety and environmental projects. Growth capital in Refining will be apportioned toward small, high return, quick pay-out projects, mainly to decrease feedstock costs and improve clean product yields. These comprise a project at the Billings Refinery to enhance heavy crude processing capabilities and yield improvement projects at the Bayway and Ponca City refineries.
In Marketing and Specialties, the company intends to invest $132 million of growth and sustaining capital. The growth investment reveals Phillips 66’s plans to keep expanding and boosting its fuels marketing business.
In Corporate and Other, Phillips 66 proposes to finance projects worth $112 million, mainly related to information technology and facilities.
Phillips 66’s joint ventures – Chevron Phillips Chemical Company LLC (CPChem), DCP Midstream, LLC (DCP Midstream) and WRB Refining LP (WRB) – are expected to fund proportionate share of capital spending of $1.1 billion. Including these equity affiliates, the company’s total 2017 capital program is estimated at $3.8 billion.
In Chemicals, CPChem is likely to invest in projects intended to capture cost-advantaged petrochemical feedstocks on the U.S. Gulf Coast. Phillips 66’s share of CPChem’s 2017 capital expenditures is anticipated to be $675 million. The funding will be utilized toward completion of CPChem’s 3.3 billion pound per year ethane cracker and two 1.1 billion-pound-per-year polyethylene facilities being constructed in the Gulf Coast region. The polyethylene facilities are anticipated to be commissioned by mid-2017, while the ethane cracker is expected to be brought online in the second half of next year. On completion, these facilities will boost CPChem’s global ethylene and polyethylene capacity by about one-third. Phillips 66’s expected share of DCP Midstream’s 2017 capital spending is $243 million, while its expected share of WRB’s capital expenditures is $135 million. Capital spending by these three joint ventures is anticipated to be self-funded.
Phillips 66 currently has a Zacks Rank #3 (Hold). Some better-ranked players in the same sector include SunCoke Energy Inc. (SXC - Free Report) , Suncor Energy, Inc. (SU - Free Report) and Futurefuel Corp. (FF - Free Report) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
SunCoke Energy posted a positive earnings surprise of 177.78% in the last reported quarter. It reported a positive earnings surprise in three of the four preceding quarters.
Suncor Energy posted a positive earnings surprise of 300.00% in the preceding quarter. It reported an average earnings surprise of 40.55% for the four preceding quarters.
Futurefuel Corp. posted a positive earnings surprise of 20.83% in the last reported quarter. It reported a positive earnings surprise in all of the four preceding quarters.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>