Phillips continuing aggressive growth in 1997, chairman tells stockholders.BARTLESVILLE, Okla.--(BUSINESS WIRE)--May 12, 1997--Strong financial results, operating excellence support worldwide growth efforts Phillips Petroleum Company Phillips Petroleum Company was founded in 1917 by L.E. Phillips and Frank Phillips, of Bartlesville, Oklahoma. Their younger brother, Waite Phillips was the benefactor of Philmont Scout Ranch. Phillips Petroleum was headquartered in Bartlesville, Oklahoma. (NYSE NYSE See: New York Stock Exchange : P), coming off a strong first quarter financial performance, will continue to aggressively grow its businesses in 1997, Wayne Allen, chairman and chief executive officer, said here today at Phillips' 80th Annual Stockholders' Meeting. "Growth is the key to providing superior shareholder returns year after year," said Mr. Allen. To achieve growth, Phillips is pursuing aggressive exploration and development programs worldwide that are intended to significantly increase oil and natural gas reserves and production. The company also is building new petrochemical facilities to increase volumes and expand its presence in growing markets. In addition, the use of advanced technology is helping Phillips expand production, improve operating efficiency and broaden the company's product slate. Here are highlights from the stockholders' meeting. Financial Review "From a financial standpoint, 1996 was an outstanding year for Phillips," said Mr. Allen. The company generated shareholder return of 34 percent, the second highest among nine peer oil companies. For the most recent five-year period, annual average shareholder return was more than 17 percent -- putting Phillips among the top performing oil companies. Net operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. increased 54 percent in 1996, to $891 million, marking the third year in a row of substantially improved operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before . For the first quarter of 1997, Phillips reported strong net operating income of $247 million, an 18 percent increase over results a year earlier. Operating Review In reviewing the company's operations, Jim Mulva, Phillips' president and chief operating officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. , highlighted the company's improved safety performance. "Safe, consistent operations are the cornerstone of the company's strong financial results," he said. "Phillips maintained a low recordable injury rate in 1996, and is doing even better in the first quarter of 1997." Mr. Mulva also outlined some of the most important growth efforts in Phillips' four core business lines: Exploration and Production (E&P): E&P is working to profitably grow reserves through an aggressive worldwide exploration program. The company is focusing its drilling plans on areas with large reserves potential, including the Gulf of Mexico Noun 1. Gulf of Mexico - an arm of the Atlantic to the south of the United States and to the east of Mexico Golfo de Mexico Atlantic, Atlantic Ocean - the 2nd largest ocean; separates North and South America on the west from Europe and Africa on the east , the United Kingdom, Ireland, Norway, Denmark, China and Australia. Phillips also is moving ahead on several key development projects aimed at increasing production. These include: -- J-Block in the U.K. North Sea, where a production platform was completed in 1996 and commercial liquids production began in April. -- The Gulf of Mexico, where the Mahogany platform began oil and natural gas production in late 1996. Phillips also is pursuing an active exploration program in its deep water acreage in the Gulf. -- The Armada and Britannia gas condensate condensate, matter in the form of a gas of atoms, molecules, or elementary particles that have been so chilled that their motion is virtually halted and as a consequence they lose their separate identities and merge into a single entity. fields in the U.K. North Sea, where production is expected in 1997 and 1998, respectively. -- The Ekofisk II project, a major redevelopment of Phillips' Ekofisk Complex offshore Norway. -- The development of heavy oil reserves Oil reserves refer to portions of oil in place that are claimed to be recoverable under economic constraints. Oil in the ground is not a "reserve" unless it is claimed to be economically recoverable, since as the oil is extracted, the cost of recovery increases incrementally in the Hamaca region of the Orinoco oil belt in eastern Venezuela, believed to be one of the world's largest accumulations of hydrocarbons. -- The Bayu-Undan field, a significant gas and condensate discovery in the Timor Sea Timor Sea An arm of the Indian Ocean between Timor and Australia. Noun 1. Timor Sea - an arm of the eastern Indian Ocean between Timor and northern Australia , where Phillips will move from the appraisal to the development phase. Gas Gathering, Processing and Marketing (GPM GPM - General Purpose Macro-generator ): In the company's gas gathering, processing and marketing operations, called GPM, Mr. Mulva highlighted the substantial increase in raw gas throughput -- 33 percent over the last six years -- as well as a marked decline in expenses. He also noted that GPM is continuing to expand its operations through selective acquisitions that are substantially increasing natural gas supplies. Refining, Marketing and Transportation (RM&T): Phillips is continuing to expand its retail and wholesale marketing operations, focusing on high-growth markets, especially in the Southwest and Rocky Mountain regions. Over the next few years, Phillips plans to add about 30 new company-operated Phillips 66 outlets annually, increasing the number of company-operated outlets from about 300 to more than 500. The majority of Phillips 66 outlets -- about 6,600 -- are operated by independent marketers. Chemicals and Plastics: Phillips is adding significant, low-cost volumes of key chemicals and plastics through the debottlenecking of domestic facilities and the construction of new facilities overseas. This includes new projects in Asia and the Middle East -- including polyethylene facilities under construction in China and Singapore, and plans to build a new facility in Thailand. The company also is evaluating construction of a new petrochemical complex in Qatar. Other Business During the stockholders' meeting, Mr. Allen reported that shareholders had elected 13 directors for the 1997 term: W.W. Allen, Norman R. Augustine, George B. Beitzel, David L. Boren David Lyle Boren (born April 21, 1941) is an American politician from the state of Oklahoma. A Democrat, he served as governor of Oklahoma from 1975 to 1979 and in the United States Senate from 1979 to 1994. He is currently president of the University of Oklahoma. , C.L. Bowerman, Robert E. Chappell Jr., Lawrence S. Eagleburger, James B. Edwards James Burrows Edwards (born June 24, 1927) is a politician and administrator from South Carolina. He was the first Republican to be elected Governor of South Carolina since Reconstruction. , Larry D. Horner, J.J. Mulva, Randall L. Tobias Randall L. Tobias (born March 20, 1942) is a former chief executive officer of Eli Lilly and Company who became the first United States Director of Foreign Assistance, and served concurrently as the Administrator of the U.S. , Victoria J. Tschinkel and Kathryn C. Turner. Stockholders also approved the designation of Ernst & Young LLP LLP - Lower Layer Protocol as independent auditors for 1997. Phillips is an integrated petroleum company with 17,200 employees worldwide. Founded in Bartlesville, Okla., in 1917, the company has $13.5 billion of assets and $16 billion of annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. revenues. -0- Visit our web site at http://www.phillips66.com CONTACT: Public Relations public relations, activities and policies used to create public interest in a person, idea, product, institution, or business establishment. By its nature, public relations is devoted to serving particular interests by presenting them to the public in the most : Rob Phillips (director), 918/661-9326 Kristi DesJarlais (exploration & production), 918/661-6117 Cheryl Finkenbinder (general company info.), 918/661-6172 Jeanne Forbis (financial), 918/661-5597 Patricia Marshall (refining, marketing & transportation; chemicals & plastics), 918/661-5139 |
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