Phillips 66 Explores Sale Of Rockies Express Pipeline Stake Worth Over $1B: Report
Portfolio Pulse from Lekha Gupta
Phillips 66 (NYSE:PSX) is considering selling its 25% stake in the Rockies Express Pipeline, valued over $1 billion, including debt. The company aims for a premium over the stake's book value of $451 million, with over $500 million in debt obligations. The pipeline spans 1,700 miles from Wyoming and Colorado to Eastern Ohio. Phillips 66 is in discussions with potential buyers, including private equity and infrastructure funds, without rushing the divestment process. Elliott Investment Management, a significant investor, has previously advised Phillips 66 on improving performance and shareholder value. PSX shares dropped 1.02% in premarket trading.
March 27, 2024 | 10:28 am
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NEUTRAL IMPACT
The VanEck Oil Refiners ETF, which includes Phillips 66, may be influenced by the company's exploration of selling its stake in the Rockies Express Pipeline.
CRAK, as an ETF that holds Phillips 66, could see its performance impacted by major developments within Phillips 66, such as the potential asset sale. The effect on CRAK's performance will depend on the overall market's perception of the sale's impact on Phillips 66's future prospects.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50
NEUTRAL IMPACT
Investors can gain exposure to Phillips 66 through the IShares U.S. Oil & Gas Exploration & Production ETF, which may be impacted by PSX's potential sale of its Rockies Express Pipeline stake.
As IEO includes Phillips 66 in its holdings, any significant news regarding Phillips 66, such as the potential sale of a major asset, could influence the ETF's performance. However, the direct impact may be moderated by the diversified nature of the ETF's holdings.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50
NEUTRAL IMPACT
Phillips 66 is exploring the sale of its Rockies Express Pipeline stake, aiming for a value over $1 billion. The company seeks a premium over the current book value and is in discussions with potential buyers.
The sale of the Rockies Express Pipeline stake could potentially unlock significant value for Phillips 66, aligning with strategies to improve shareholder returns. However, the impact on the stock price is uncertain, as the market may have mixed reactions to the sale process and its implications for the company's future strategy and financial health.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100