Page 6 - NorthAmOil Week 02 2023

NorthAmOil INVESTMENT NorthAmOil

Phillips 66 signs $3.8bn deal

to buy stake in DCP Midstream

US PHILLIPS 66 has agreed to acquire all of the The transaction is expected to generate an
publicly held common units representing lim- incremental $1bn of adjusted earnings for Phil-
ited partner interests in pipeline operator DCP lips 66. In addition, Phillips 66 expects to capture
Midstream, in an all-cash deal worth $3.8bn. operational and commercial synergies of at least
This represents a cash consideration of $41.75 $300mn by integrating DCP Midstream into its
per common unit. existing midstream business.
The deal will double Phillips 66’s economic Phillips 66 intends to fund the roughly $3.8bn
interest in Denver-based natural gas giant DCP purchase through a combination of cash and
to 86.8%. The transaction values DCP at around debt while maintaining its current investment

$8.7bn. The all-cash transaction is expected to grade credit ratings.
close in the second quarter of 2023. In early December, Phillips 66 had said it
Phillips 66, a Houston-based oil refiner, has would raise spending on new projects in 2023
been expanding its business in natural gas liquids year by around 6%, investing more into its pipe-
(NGLs). line businesses and renewable fuels. The DCP
“We are delivering on our commitment Midstream deal represents the first transaction
to grow our NGL business,” said Phillips 66’s as part of that strategy.
president and CEO, Mark Lashier. “Our well- In 2023, total capital spending is estimated to
head-to-market platform captures the full NGL be roughly $3.14bn, up from Phillips 66’s 2022
value chain. As we continue integrating DCP budget of $2.97bn. Phillips 66 has said it would
Midstream, we are unlocking significant syner- have a budget of $2bn per year out to the end of
gies and growth opportunities.” 2024, not including joint ventures.™

PERFORMANCE

Cenovus reduces refinery

throughput guidance

NORTH AMERICA CENOVUS Energy has reported that its refin-
ery throughput and operational availability have
been affected by recent extreme winter storms
and severe cold temperatures at the company’s
US and Canadian refining operations.
The bad weather was coupled with unplanned
operational challenges and third-party pipeline
outages, which also affected refinery through-
put and operational availability, said the Cal-
gary-based company.
The Lloydminster refinery , which Cenovus
took ownership of via its acquisition of Husky was significantly reduced in December. The
Energy has continued to run well over the course company now anticipates its fourth-quarter
of December and into January. However, the 2022 downstream throughput to be 90,000-
company’s refineries in the US and the Lloyd- 95,000 barrels per day (bpd) in Canada, while
minster upgrader experienced various degrees in the US, throughput is forecast to be 370,000-
of unplanned operational issues, weather-related 380,000 bpd.
impacts and third-party pipeline outages. The Lima refinery is now operating at full
As a result, Cenovus’ downstream throughput rates. The Lloydminster upgrader and Borger

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