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Houston-based petroleum refinery Phillips 66 (NYSE:PSX) is actively discussing the sale of some of its assets, according to a Thursday statement made by the company's CEO.
The plan to sell $3 billion of its non-core assets this year was hatched last year when the company said it would look to cut costs and assets in order to boost returns.
According to Mark Lashier, there is no fixed timeline as to when a sale of these assets may occur. "We don't have (a) sense of urgency... It's really going to be a function of whether someone puts a greater value on these assets than we do," Lashier said on Thursday.
2023 was an unkind year for the U.S.-based refiner, seeing its profits plunge by 46% in the second quarter of the year, with adjusted earnings of just $1.8 billion—compared to $3.3 billion in Q2 2022. Its Q3 adjusted earnings were higher at $2.1 billion, but still failed to live up to analyst expectations.
Its refinery utilization, however, was the highest in years at 95%.
Then, in November, activist investor Elliott Investment Management snapped up a $1 billion stake in the refiner, citing the company's underperformance. The group submitted a letter to Phillips 66 outlining the ways in which it could do better and chastised the company for letting operating expenses get too high.
But even before Elliot Investment Management bought shares in the refiner, Phillips 66 selected $3 billion in non-core assets for a possible 2024 sale. At the time, Lashier said the company had indeed identified which assets would go on the chopping block, but failed to disclose them. Lashier said the refiner wasn’t “in any rush” and that for now, the assets provided the refinery “good value”.
The Phillps 66 share price rose 34.63% over the past year to $135.55.
By Julianne Geiger for Oilprice.com
Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.