HOUSTON - Phillips 66 (NYSE: NYSE:PSX), a diversified energy manufacturing and logistics company with a market capitalization of $50.7 billion, has announced its capital budget for the year 2025, amounting to $2.1 billion. This budget includes $998 million allocated for sustaining capital and $1.1 billion earmarked for growth capital. According to InvestingPro data, the company maintains a FAIR financial health score, supported by strong operational metrics and a stable 3.75% dividend yield.
The company's chairman and CEO, Mark Lashier, emphasized the alignment of investments with strategic priorities, focusing on the natural gas liquids (NGL) wellhead-to-market value chain and refining competitiveness enhancements. The company's strategic focus has helped maintain its robust financial position, with last twelve months revenue of $147.7 billion and EBITDA of $5.57 billion.
The 2025 capital budget is distributed across various segments of the company's operations. In the Midstream sector, Phillips 66 plans to invest $975 million, with $429 million for sustaining projects and $546 million for growth projects. This investment aims to solidify the company’s position in key basins and increase gas processing capacity.
Refining will see an investment of $822 million, split between $414 million in sustaining capital and $408 million in growth capital to support high-return, low-capital projects. The Marketing and Specialties capital budget will continue to enhance the company's branded network.
Renewable Fuels is set to receive $74 million, directed towards optimizing feedstocks and logistics for renewable diesel and sustainable aviation fuel production at the Rodeo Renewable Energy Complex.
Corporate and Other capital will primarily fund information technology projects, reflecting the company's commitment to modernizing its operations.
Additionally, Phillips 66's share of capital spending by joint ventures Chevron (NYSE:CVX) Phillips Chemical Company LLC (CPChem) and WRB Refining LP (WRB) is expected to total $877 million, which will be self-funded. CPChem's growth capital will support the construction of petrochemical facilities on the U.S. Gulf Coast and in Ras Laffan, Qatar, with expected start-up in 2026.
Including the joint ventures' capital spending, Phillips 66's total capital program for 2025 is projected at $3 billion.
This announcement underscores Phillips 66's strategy of disciplined capital investment and commitment to delivering shareholder value. The company, headquartered in Houston, operates globally, focusing on safety, reliability, and pursuing a lower-carbon future. With a P/E ratio of 15.6 and analyst price targets reaching up to $161, Phillips 66 currently trades near its InvestingPro Fair Value. For deeper insights into Phillips 66's financial health and growth prospects, investors can access comprehensive analysis through InvestingPro's detailed research reports, available for over 1,400 US stocks.
The information presented here is based on a press release statement from Phillips 66.
In other recent news, Phillips 66 reported a solid financial performance in its Q3 2024 earnings call, despite challenges in the refining market. The company has returned $12.5 billion to shareholders since July 2022 and is close to achieving its target of $13 billion to $15 billion. The Midstream segment's earnings were bolstered by the strategic sale of a 49% interest in a Swiss retail joint venture and strategic acquisitions. The company's adjusted earnings were $859 million, with an operating cash flow of $1.1 billion.
In other developments, Phillips 66 plans to shut down its Los Angeles refinery by Q4 2025 due to declines in local crude production and regulatory pressures. The company is also on track to reach $3 billion in asset sales and projects a mid-cycle earnings capacity of $14 billion by 2025. Analysts noted that despite some bearish highlights such as margin declines in the West Coast market, Phillips 66 remains committed to returning 50% or more of operating cash flow to shareholders by 2025. These are among the recent developments for Phillips 66, a company that continues to focus on strategic growth and operational efficiency.
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