Phillips 66 boosts 2015 budget

Phillips 66 (NYSE: PSX) said Dec. 5 its capital budget for 2015 is $4.6 billion, up 18 percent from what it spent in 2014.

Including spending for joint ventures DCP Midstream, Chevron Phillips Chemical Co. and WRB Refining, Phillips 66 expects its total capital program to be $6.8 billion next year.

Last year, Phillips 66 announced its 2014 capital budget of $2.7 billion, not including joint ventures, in December and increased that to $3.9 billion in July.

Here's a basic breakdown of the company's 2015 budget: Midstream:$3.16 billion, plus $550 million for its share of DCP's expenditures

Refining:$1.11 billion, plus $203 million for its share of WRB's capital expenditures

Phillips 66 more than doubled its midstream spending from last year's initial budget. Midstream spending includes the ongoing construction of the Sweeny Fractionator One and the Freeport LPG Export Terminal on the Gulf Coast, as well as pipeline and rail infrastructure projects to move crude oil from North Dakota throughout the U.S. Phillips 66 also is pursuing an expansion of the Beaumont Terminal and related infrastructure opportunities, the company said.

Midstream spending also includes $207 million that Phillips 66 Partners LP, a master limited partnership, plans to spend on organic growth projects.

"The 2015 capital program reflects our commitment to grow our higher-value businesses while enhancing returns in refining," Chairman and CEO Greg Garland said in a statement. "We are executing a portfolio of major midstream and chemicals projects while evaluating a significant backlog of investment opportunities."

The company increased its dividend 28 percent during 2014 and expects double-digit increases for the next two years, Garland said. Through Sept. 30, Phillips 66 returned $3.9 billion of capital to shareholders through dividends, share repurchases and divesting Phillips Specialty Products Inc., and the company still had $2.6 billion available under its share repurchase authorization.

"Our plans for significant growth in enterprise value are supported by our 2015 capital budget and our commitment to a 60/40 ratio of reinvestment to distributions," Garland said in the statement. "Disciplined capital allocation and operating excellence remain our top priorities."

Phillips 66 is the Houston area's largest public company, based on its 2013 revenue of nearly $171.6 billion, according to Houston Business Journal research.

And on the other side of that upstream/downstream split:

ConocoPhillips cutting capital spending by 20 percent
http://fuelfix.com/blog/2014/12/08/conocophillips-cutting-capital-spending-by-20-percent/
December 8, 2014

ConocoPhillips set its 2015 capital budget at $13.5 billion, a decrease of 20 percent over this year, the Houston oil and gas company said Monday.

That reflects lower spending on major projects, several of which are nearing completion, and deferral of spending on North American unconventional plays.

Despite the cut, the company expects to produce about 3 percent more in 2015 from continuing operations, excluding Libya.

“We are setting our 2015 capital budget at a level that we believe is prudent given the current environment,” said Ryan Lance, chairman and chief executive officer.

“This plan demonstrates our focus on cash flow neutrality and a competitive dividend, while maintaining our financial strength. We are fortunate to have significant flexibility in our capital program. Spending on several major projects has peaked and we will get the benefit of production uplift from those projects over the next few years. In addition, we identified inventory in the unconventionals, where we also retain a high degree of capital flexibility.”

About $5.0 billion is allocated toward development drilling programs. This compares to the 2014 budget of $6.5 billion.

In 2015, the Lower 48 development program capital will keep targeting the Eagle Ford and Bakken, but will defer significant investment in the emerging North American unconventional plays, including the Permian, Niobrara, Montney and and Duvernay.

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