Phillips 66 Expands Refining Business with Major Acquisition

Author: Owen Jenkins Updated: 09-09-2025 09:02 AM

Strategic Acquisition by Phillips 66

Phillips 66 announced its intent to acquire the remaining 50% stake in WRB Refining LP from Cenovus Energy Inc. for a substantial $1.4 billion in cash. This acquisition grants Phillips 66 complete ownership of two significant U.S. refineries, enhancing its operational capabilities.

Details of the Refining Assets

About the Refineries

The deal specifically pertains to Cenovus’ shares in the Wood River refinery located in Roxana, Illinois, and the Borger refinery situated in Texas. Collectively, these refineries have an impressive processing capacity of approximately 495,000 barrels per day, playing a vital role in the refining sector.

Operational Advantages

With this transition, Phillips 66 aims to streamline its operations. Chairman and CEO Mark Lashier emphasized that complete ownership would simplify processes and bolster the company’s position within critical refining markets. Furthermore, financial projections indicate that this acquisition could result in annual savings of around $50 million.

Market Impact and Future Plans

Phillips 66’s acquisition strategy aligns with its long-term objectives of maximizing operational efficiency and enhancing shareholder returns. The management believes that investing in these assets will support smaller, high-return projects that contribute significantly to the company’s profitability.

Cenovus Energy's Focus Shift

In conjunction with this sale, Cenovus’s President and CEO Jon McKenzie expressed that liquidating its stake aligns with the company's mission to concentrate on upstream heavy oil operations. The proceeds from this strategic decision will facilitate debt reduction and bolster share buybacks.

Financial Position of Phillips 66

As of the latest quarter, Phillips 66 maintained $1.1 billion in cash and equivalents, alongside $3.7 billion in committed capacity from its credit facilities. This financial robustness provides a solid foundation for such acquisitions and future growth initiatives.

Investor Perspectives

This acquisition has attracted the attention of energy-focused investors, particularly those tracking the Energy Select Sector SPDR Fund (XLE) and the iShares U.S. Energy ETF (IYE), both of which include positions in major integrated oil companies. These movements reflect a growing confidence among investors regarding the long-term potential of Phillips 66.

Stock Performance Update

Following the announcement, PSX stock closed down by 1.02% at $130.21. On the other hand, shares for Cenovus (CVE) saw a positive change, trading 1.42% higher at $16.24.

Frequently Asked Questions

What did Phillips 66 acquire from Cenovus?

Phillips 66 acquired the remaining 50% stake in WRB Refining LP for $1.4 billion in cash, giving them full ownership of the two U.S. refineries.

How will this acquisition impact Phillips 66's operations?

The acquisition is expected to streamline operations, enhance market position, and generate $50 million in annual savings.

What is the capacity of the refineries owned by Phillips 66?

The Wood River refinery boasts a processing capacity of 345,000 barrels per day, while Borger can handle 149,000 barrels per day.

How will Cenovus Energy use the proceeds from the sale?

Cenovus plans to use the proceeds to pay down debt and increase share repurchase activities.

What financial position does Phillips 66 have post-acquisition?

Phillips 66 holds $1.1 billion in cash and equivalents and possesses $3.7 billion in committed capacity from its credit facilities.

About The Author

Hi there I'm 38-year-old author and financial consultant Owen Jenkins. Having worked in the financial sector for more than ten years, I am well-versed in the subtleties and complexity that mold our financial environment. Following a degree in finance, I worked in a number of financial institutions honing my abilities in market analysis, financial planning, and investment strategies.

My love is teaching others about investing and personal finance. My goal in writing many books and articles has been to demystify financial ideas and give readers the information they need to make wise financial decisions. I write with a direct, useful style that emphasizes doable suggestions for daily living.

Along with writing, I lead webinars and seminars where I impart knowledge on how to successfully negotiate the financial world. I also write for financial journals and show up as a guest expert on financial news programs a lot. Whether they are new to investing or want to improve their approach, my mission is to enable people to take charge of their financial futures.

Beyond work, I like to hike, play the guitar, and spend time with my family. I think that balance is crucial and want to encourage people to strike a balance between their financial aspirations and their hobbies. I want to help people succeed and achieve financial security through my work, so having a good influence.

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