Transaction advances company’s
wellhead-to-market strategy
Phillips 66 (NYSE: PSX) announced today it has agreed to acquire
Pinnacle Midland Parent LLC (Pinnacle) from private equity firm
Energy Spectrum Capital for cash consideration of $550 million in a
strategic move to expand its natural gas gathering and processing
footprint in the Midland Basin.
“We are growing our Midstream business in the Permian to further
strengthen and expand our service offerings to customers while
driving operational and commercial synergies,” said Mark Lashier,
Chairman and CEO of Phillips 66. “Pinnacle is a bolt-on asset that
advances our wellhead-to-market strategy and complements our
diversified and integrated asset portfolio. Further, this
transaction aligns with our long-term objectives to build out our
natural gas liquids value chain, be disciplined with our capital
allocation and create sustainable value for our shareholders.”
Pinnacle’s assets include the recently built Dos Picos natural
gas gathering and processing system: a 220 MMcf/d gas processing
plant, 80 miles of gathering pipeline and 50,000 dedicated acres
through high-quality producers in one of Phillips 66’s focus
basins. The Dos Picos processing complex and related infrastructure
is easily scalable toward a second 220 MMcf/d gas plant and
integrates well into Phillip 66’s existing downstream
infrastructure.
“Pinnacle has established itself as one of the premier midstream
providers in the Midland Basin, with a top-notch talented team,
first-class operations and infrastructure, and world-class
customers,” said J. Greg Sargent, CEO of Pinnacle. “I am incredibly
proud of what we have achieved as a team in the basin and in the
community.”
The transaction is expected to close around mid-year of 2024
following satisfaction of customary closing conditions, including
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976
(HSR).
About Phillips 66
Phillips 66 (NYSE: PSX) is a leading diversified and integrated
downstream energy provider that manufactures, transports and
markets products that drive the global economy. The company’s
portfolio includes Midstream, Chemicals, Refining, and Marketing
and Specialties businesses. Headquartered in Houston, Phillips 66
has employees around the globe who are committed to safely and
reliably providing energy and improving lives while pursuing a
lower-carbon future. For more information, visit phillips66.com or
follow @Phillips66Co on LinkedIn.
About Pinnacle Midstream II LLC
Pinnacle Midstream II LLC is an independent midstream energy
company headquartered in Houston, Texas. The company is focused on
providing high-quality natural gas services to producer customers
throughout the Midland Basin. For more information, please visit
www.pinnaclemidstream.com.
About Energy Spectrum
Pinnacle Midstream II LLC is backed by Energy Spectrum Capital,
a Dallas, Texas-based infrastructure firm that makes direct
investments in well managed, lower-middle-market companies that
acquire, develop, and operate energy assets in North America. For
more information, please visit www.energyspectrum.com.
CAUTIONARY STATEMENT FOR THE PURPOSES OF THE
“SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995
This news release contains forward-looking statements within the
meaning of the federal securities laws. Words such as
“anticipated,” “estimated,” “expected,” “planned,” “scheduled,”
“targeted,” “believes,” “continues,” “intends,” “will,” “would,”
“objectives,” “goals,” “projects,” “efforts,” “strategies” and
similar expressions are used to identify such forward-looking
statements. However, the absence of these words does not mean that
a statement is not forward-looking. Forward-looking statements
included in this news release are based on management’s
expectations, estimates and projections as of the date they are
made. These statements are not guarantees of future performance and
you should not unduly rely on them as they involve certain risks,
uncertainties and assumptions that are difficult to predict.
Therefore, actual outcomes and results may differ materially from
what is expressed or forecast in such forward-looking statements.
Forward-looking statements contained in this release include, but
are not limited to, statements regarding the expected benefits of
the transaction to Phillips 66 and its shareholders and the
anticipated consummation of the transaction and the timing thereof.
Factors that could cause actual results or events to differ
materially from those described in the forward-looking statements
include: fluctuations in NGL, crude oil, refined petroleum product
and natural gas prices, and refining, marketing and petrochemical
margins; changes in governmental policies or laws that relate to
NGL, crude oil, natural gas, refined petroleum products, or
renewable fuels that regulate profits, pricing, or taxation, or
other regulations that limit or restrict refining, marketing and
midstream operations or restrict exports; the effects of any
widespread public health crisis and its negative impact on
commercial activity and demand for refined petroleum products;
Phillips 66’s ability to timely obtain or maintain permits
necessary for capital projects; changes to worldwide government
policies relating to renewable fuels and greenhouse gas emissions
that adversely affect programs including the renewable fuel
standards program, low carbon fuel standards and tax credits for
biofuels; Phillips 66’s ability to achieve the expected benefits of
the integration of DCP Midstream, LP, including the realization of
synergies; the success of Phillips 66’s business transformation
initiatives and the realization of savings and cost reductions from
actions taken in connection therewith; unexpected changes in costs
for constructing, modifying or operating Phillips 66’s facilities;
Phillips 66’s ability to successfully complete, or any material
delay in the completion of, asset dispositions or acquisitions that
we may pursue; unexpected difficulties in manufacturing, refining
or transporting Phillips 66’s products; the level and success of
drilling and production volumes around Phillips 66’s midstream
assets; risks and uncertainties with respect to the actions of
actual or potential competitive suppliers and transporters of
refined petroleum products, renewable fuels or specialty products;
lack of, or disruptions in, adequate and reliable transportation
for Phillips 66’s NGL, crude oil, natural gas, and refined
products; potential liability from litigation or for remedial
actions, including removal and reclamation obligations under
environmental regulations; failure to complete construction of
capital projects on time and within budget; Phillips 66’s ability
to comply with governmental regulations or make capital
expenditures to maintain compliance with laws; limited access to
capital or significantly higher cost of capital related to
illiquidity or uncertainty in the domestic or international
financial markets, which may also impact Phillips 66’s ability to
repurchase shares and declare and pay dividends; potential
disruption of Phillips 66’s operations due to accidents, weather
events, including as a result of climate change, acts of terrorism
or cyberattacks; general domestic and international economic and
political developments, including armed hostilities (such as the
Russia-Ukraine war), expropriation of assets, and other political,
economic or diplomatic developments; international monetary
conditions and exchange controls; changes in estimates or
projections used to assess fair value of intangible assets,
goodwill and property and equipment and/or strategic decisions with
respect to Phillips 66’s asset portfolio that cause impairment
charges; investments required, or reduced demand for products, as a
result of environmental rules and regulations; changes in tax,
environmental and other laws and regulations (including alternative
energy mandates); political and societal concerns about climate
change that could result in changes to Phillips 66’s business or
increase expenditures, including litigation-related expenses; the
operation, financing and distribution decisions of equity
affiliates we do not control; and other economic, business,
competitive and/or regulatory factors affecting Phillips 66’s
businesses generally as set forth in its filings with the
Securities and Exchange Commission. Phillips 66 is under no
obligation (and expressly disclaims any such obligation) to update
or alter its forward-looking statements, whether as a result of new
information, future events or otherwise.
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version on businesswire.com: https://www.businesswire.com/news/home/20240520242613/en/
Jeff Dietert (investors) 832-765-2297 jeff.dietert@p66.com
Owen Simpson (investors) 832-765-2297 owen.simpson@p66.com
Rich Johnson (media) 832-765-1016 rich.johnson@p66.com
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