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Phillips 66 Reduces 2016 Capex, Raises Share Buyback Plan

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U.S. refiner Phillips 66PSX has lowered its capital budget for 2016. The firm has, however, increased its share buyback plan.

The company has set its capital expenditure, excluding Phillips 66 Partners L.P.'s PSXP capital program, at $3.6 billion for 2016. Per an analyst report, the company's pervious capital budget for 2015 was $4.6 billion of which, $200 million was allocated for Phillips 66 Partners.

Of the total budget, Phillips 66 intends to spend $2 billion in its midstream business and $1.2 billion in its refining operations. The 2016 budget emphasizes on financing Midstream growth and improving returns in Refining.

The company is building a 4.4 million barrel per month liquids export terminal at Freeport, TX. The construction is expected to complete in the second half of 2016. Phillips 66 is also expanding its natural gas liquids fractionator in the nearby area of Sweeny along with investing in several pipeline projects.

In Transportation, the company is financing the new DAPL and ETCOP pipeline projects to carry crude oil from the Bakken production area of North Dakota to market centers throughout the United States. Also, storage capacity at the Beaumont Terminal in Nederland, TX is being increased. Additionally, the company is investing in the Bayou Bridge pipeline project to carry crude oil from Texas to Louisiana markets.

Phillips 66 also increased its share buyback by $2 billion to $9 billion. Per management, the company intends to hike dividends in 2016.

Phillips 66 carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the same space are Natural Gas Services Group Inc. NGS and ReneSola Ltd SOL . Both these stocks sport a Zacks Rank #1 (Strong Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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