LONDON, UK / ACCESSWIRE / September 25, 2017 / Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for Phillips 66 Partners L.P. (NYSE: PSXP) ("PSXP"), following which we have published a free report that can be viewed by signing up at http://protraderdaily.com/optin/?symbol=PSXP. The Company announced on September 22, 2017, that it is acquiring Phillips 66's (NYSE: PSX) 25% stake in two pipelines located in the Bakken basin - Dakota Access, LLC and Energy Transfer Crude Oil Company, LLC (Bakken Pipeline) and 100% stake in Merey Sweeny, L.P., the coke processing units located at the Phillips 66 Sweeny Refinery. The entire transaction is valued approximately $2.4 billion which includes debt. This is one of the largest acquisition in the history of PSXP. For immediate access to our complimentary reports, including today's coverage, register for free now at:

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Commenting on the acquisition, Greg Garland, Chairman, and CEO of PSXP, said:

"The Bakken Pipeline complements our strategy to expand current systems that are integrated with Phillips 66 refineries and terminals, while MSLP provides another reliable source of cash flow generation to the portfolio. This acquisition supports our EBITDA growth objective by adding solid fee-based assets to the Partnership and keeps us on track to deliver our 30 percent distribution growth target. To meet our $1.1 billion of annual run-rate adjusted EBITDA goal by the end of 2018, we do not anticipate accessing the equity market, other than through the selective use of our at-the-market program."

Details of the transaction

The assets acquired by PSXP includes The Bakken Pipeline. The Bakken Pipeline has a total length of 1,926 miles and the capacity to carry 520,000 barrels of crude oil per day, which can be expanded up to 570,000 barrels per day (BPD). The Bakken Pipeline also has receipt stations in North Dakota to access Bakken and Three Forks production, a delivery and receipt point in Patoka, Illinois as well as delivery points in Nederland, Texas, including the Phillips 66 Beaumont Terminal. The Merey Sweeny fuel-grade coke processing unit processes residue from heavy sour crude oil into liquid products and fuel-grade petroleum coke at the Phillips 66's Sweeny Refinery located in Old Ocean, Texas. The processing unit comes with a 125,000 BPD capacity vacuum distillation unit and a 70,000 BPD capacity delayed Coker unit.

The total transaction value of $2.4 billion includes approximately $1.7 billion in cash and assumption of Bakken Pipeline's debt of approximately $625 million and Merey Sweeny's debt of approximately $100 million. The transaction value is approximately 8.9 times the adjusted EBITDA of the assets for the full year 2018, which is approximately $270 million. The acquisition is expected to be immediately accretive to unit-holders of PSXP.

As part of the acquisition, PSXP will enter into a separate 15-year tolling agreement with Merey Sweeny which includes a base throughput fee and minimum volume commitment from Phillips 66.

The transaction has been approved by the Board of Directors of Phillips 66 based on the recommendation of the Company's conflicts committee. The transaction is expected to close in early October 2017.

Financing for the transaction

PSXP is planning to use a mix of fresh debt, private placement of its equity units as well as its units issued to Phillips 66 to finance the acquisition. Accordingly, PSXP will take on certain term loans of Phillips 66 including notes payable to Phillips 66. PSXP has already announced the private placement of US$750 million Series A Perpetual Convertible Preferred Units and US$300 million Common Units in a separate announcement. Part of the funds raised from the private placement would be used for the current acquisition and the balance for general partnership purposes. PSXP will also issue approximately $240 million worth of PSXP units to Phillips 66. The PSXP units issued will be done in a manner that the general partner maintains its 2% interest.

About Phillips 66

Houston, Texas-based Phillips 66 is a diversified energy manufacturing and logistics Company that processes, transports, stores, and markets fuels and products globally. Its portfolio of businesses includes Midstream, Chemicals, Refining and Marketing, and Specialties. The Company has over 14,800 employees. Phillips 66 had approximately $52 billion in assets as on December 31, 2016.

About Phillips 66 Partners L.P.

Phillips 66 Partners is the master limited partnership (MLP) of Phillips 66. MLP's are usually formed to own, operate, develop, and acquire Oil & Gas assets including crude oil, refined petroleum, natural gas liquids pipelines, and terminals and other transportation and midstream assets. MLPs have unit-holders and receive dividends based on the number of units owned by the unit-holder.

Last Close Stock Review

On Friday, September 22, 2017, the stock closed the trading session at $51.40, climbing 5.94% from its previous closing price of $48.52. A total volume of 493.94 thousand shares have exchanged hands, which was higher than the 3-month average volume of 248.18 thousand shares. Phillips 66 Partners' stock price advanced 5.59% in the last three months, 2.33% in the past six months, and 8.69% in the previous twelve months. Furthermore, since the start of the year, shares of the Company have gained 5.67%. The stock is trading at a PE ratio of 21.20 and has a dividend yield of 4.79%. At Friday's closing price, the stock's net capitalization stands at $5.63 billion.

Phillips 66's share price finished last Friday's trading session at $89.89, slightly up 0.84%. A total volume of 2.03 million shares have exchanged hands, which was higher than the 3-month average volume of 1.99 million shares. The Company's stock price surged 11.98% in the last three months, 16.33% in the past six months, and 12.32% in the previous twelve months. Additionally, the stock gained 4.03% since the start of the year. Shares of the Company have a PE ratio of 26.88 and have a dividend yield of 3.11%. The stock currently has a market cap of $46.54 billion.

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