Phillips 66 (PSX) reported earnings on Fri 8 Feb 2019 (b/o)

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Phillips 66 beats by $1.98

• Reports Q4 (Dec) earnings of $4.87 per share, $1.98 better than the S&P Capital IQ Consensus of $2.89.
• Generated $7.6 billion of operating cash flow, including $2.9 billion from equity affiliates

Phillips 66 Partners (PSXP)

• Pipeline transportation of natural gas company
• phillips66partners.com
• Headquarters: Houston, TX
• Founded: 2013
• Div/yield 0.62/4.77

Phillips 66 Partners (PSXP) reaches agreement w/ Phillips 66 (PSX) to acquire its 25% interest in each of Dakota Access, Energy Transfer Crude Oil Company, and Merey Sweeny in a transaction valued at $2.4 bln

The acquisition is expected to be immediately accretive to the Partnership and its unitholders and is anticipated to close in early October 2017.

• The total transaction value of $2.4 billion includes $625 million in proportional non-consolidated, non-recourse Bakken Pipeline debt and $100 million of MSLP debt.
• In connection with the MSLP acquisition, Phillips 66 Partners will enter into a new 15-year tolling agreement that includes a base throughput fee and minimum volume commitment from Phillips 66.
• Consideration for the acquisition is $1.7 billion.
• The Partnership plans to fund the acquisition through a combination of debt, proceeds from a private placement of equity units, and PSXP units issued to Phillips 66.
• The transaction includes interests in the following assets:
  • The Bakken Pipeline, which consists of 1,926 combined pipeline miles and 520,000 barrels per day ("BPD") of crude oil capacity expandable to 570,000 BPD.
  • MSLP, owner of facilities that process residue from heavy sour crude oil into liquid products and fuel-grade petroleum coke at the Phillips 66 Sweeny Refinery in Old Ocean, Texas.

Phillips 66 Partners to sell $750 million of newly issued Series A Perpetual Convertible Preferred Units at $54.27 per preferred unit and 6,304,204 common units at $47.59 per common unit
The Partnership expects to use a portion of the net proceeds from the offering to fund its announced acquisition of a 25 percent interest in each of Dakota Access, LLC and Energy Transfer Crude Oil Company, LLC (collectively, the "Bakken Pipeline"), and a 100 percent interest in Merey Sweeny, L.P. The Partnership expects to use the remaining proceeds for general partnership purposes, including funding of future acquisitions and organic projects and repayment of outstanding indebtedness.

Phillips 66 (PSX) reported earnings on Fri 28 Apr 2017 (b/o)

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Phillips 66 beats by $0.50:

• Reports Q1 (Mar) earnings of $0.56 per share, $0.50 better than the Capital IQ Consensus of $0.06. 

Strategic Update:

• Phillips 66 continues to advance its growth projects in Midstream and Chemicals and invest in return-enhancing projects in Refining. In Midstream, the Freeport LPG Export Terminal was completed and became fully operational late in the fourth quarter of 2016. The export terminal has a capacity of 150,000 BPD that is being utilized for term and spot cargos. The facility demonstrated its ability to operate at design capacity in the first quarter. Phillips 66 has a 25 percent interest in joint ventures to develop the 470,000 BPD Dakota Access Pipeline (:DAPL) and Energy Transfer Crude Oil Pipeline (:ETCOP). Construction on both pipelines has been completed. Commercial operations are expected to begin by June 1. The company continues to expand its Beaumont Terminal, which now has 9 million barrels of crude and product storage capacity. An additional 1.2 million barrels of product storage is planned to be in service by mid-2017. The facility is capable of exporting 400,000 BPD of crude or products, and this capacity is being expanded to 600,000 BPD. Phillips 66 Partners continues to advance its organic growth program. Progress continues on the Bayou Bridge Pipeline segment from Lake Charles to St. James, Louisiana, with commercial operations expected to begin in the fourth quarter of 2017. In addition, the Partnership is developing a new isomerization unit at Phillips 66's Lake Charles Refinery to increase production of higher octane gasoline blend components. Final project approval is expected in the first half of 2018. DCP Midstream recently simplified its structure, which better positions it for growth and improved capital allocation. Phillips 66 expects to receive distributions from DCP in 2017. DCP is expanding the Sand Hills Pipeline capacity to 365,000 BPD, with an expected in-service date in the fourth quarter of 2017. DCP is also expanding its DJ Basin footprint with construction of the new 200 million cubic feet per day Mewbourn 3 gas processing plant, which is expected to be in service in the fourth quarter of 2018. CPChem continues to progress its U.S. Gulf Coast Petrochemicals Project, which consists of a world-scale ethane cracker and two polyethylene derivative units. The polyethylene units are expected to be completed in mid-2017, and the cracker is expected to be complete in the fourth quarter of 2017. This project will increase CPChem's global ethylene and polyethylene capacity by approximately one-third. In Refining, the company is nearing completion of the project to increase heavy crude processing capability at the Billings Refinery to 100 percent, with start-up expected in June. At both the Bayway and Wood River refineries, the company is modernizing fluid catalytic cracking units to increase clean product yield. Both projects are expected to be complete in the first half of 2018. Phillips 66 is also implementing yield improvement efforts at several other refineries, including Ponca City, where a diesel recovery project is expected to be complete in the second half of 2017.

Look for Pullbacks in Pumped-Up Oil Refiners

(Barron's; 11 Feb 2013) While shares of oil refiners have been outpacing the broad market since 2010, many of them have been really pumped up since last May. While the stocks now are technically overbought for the near term, long-term chart trends remain positive. That suggests an opportunity is coming to buy a price dip.

For example, HollyFrontier (ticker: HFC) moved higher in a relatively tame rising trend after breaking out last June (see Chart 1). Chart watchers will point out that prices advanced within the confines of a rising trend channel, which is simply a rising trendline drawn through price lows and a parallel line drawn through price highs.

Trend channels can indicate a more orderly rally than a trendline alone as they tamp down on exaggerated price swings within the rising trend. But when prices move outside a channel we can quickly surmise that something changed. A breakdown, of course, would be bearish and indicate a possible reversal in trend. Conversely, a move above a rising channel would indicate an accelerated trend, and that means pullbacks become very shallow. Investors must act quickly to join in on the rally.

But such speed can quickly push a stock too far, too fast, leaving it overbought, or overextended, and ripe for a sharp correction. That is where HollyFrontier is now. Momentum indicators such as the relative strength index (RSI) are at very high levels. While this does not automatically result in a correction, it greatly increases the risk of chasing the stock higher.

A dip back down to the top of the former trend channel is a good place for late bulls to look for an opportunity to buy. Based on current trading, that could take as much as a 10% decline. It sounds big; but in the context of a doubling of price since last June, it is quite reasonable. Given the strength in HollyFrontier to date, however, it does not seem likely the stock will pull back quite that much before eager bulls jump back in.

Tesoro (TSO) is in a similar situation with an accelerated rally and overbought momentum indicators. Making it even more risky is that it has moved 54% above its own 200-day moving average (see Chart 2). Considering that this moving average is used as a proxy for long-term trend, we can see how the stock has indeed gotten a bit ahead of itself. Anything trading too far away from its major moving average is prone to a snapback.

Further, Tesoro has reached an upside price objective derived from its 2011-early 2012 trading range. By projecting the height of the pattern up from the breakout point, we can find a likely price zone at which the rally may run into problems. If the stock survives any selling pressure that arises, it often moves higher again by a similar amount.

In rough terms, Tesoro's range was between 18 and 30, so the first target was 12 points higher, at 42. The second target was another 12 points higher at 54 and the stock traded Monday at 54.34.

Again, long-term trends remain strong, so any pullback should provide investors with a better price at which to buy.

There are several other stocks in the group with similar technical conditions. Western Refining (WNR) is a smaller stock but its trend, following a pullback, looks just as strong. And larger stocks, such as Phillips 66 (PSX) and Marathon Petroleum (MPC), offer potential buys following pullbacks and sport single-digit price-earnings ratios (on trailing 12-month results) to make them interesting from the fundamental side as well.

Refiners:

• Marathon Petroleum (MPC)
• Western Refining (WNR)
• Phillips 66 (PSX)
• HollyFrontier (HFC)
• Tesoro (TSO)