Much like the rest of the majors, Phillips Petroleum is back ontrack in terms of strong financial results with $221 million in netincome in the third quarter, up from $46 million for the sameperiod last year. But CEO Jim Mulva said the sale of its midstreamGPM business, and possible “joint venturing” of its chemicals,refining and marketing operations are still on. The GPM sale isexpected to take place before the end of the year.

Mulva reiterated that Phillips still intends to remain anintegrated E&P company, with refining, marketing and chemicals.”But instead of owning those companies 100% we’re going to belooking at joint ventures with [refining, marketing and chemicals].What we have in mind is that Phillips will continue to see thebenefits of being an integrated company but we will do thechemicals and R&M through a joint venture and we will bededicating more of our resources to the growth and development ofour upstream E&P business.”

Total revenues for the third quarter were $3.8 billion, versus$2.9 billion a year ago. Net operating income was $221 millioncompared with $69 million for the third quarter a year ago.

“Our operating earnings showed dramatic improvement thisquarter. In addition to the higher oil and gas prices experiencedby the entire industry, Phillips benefited from continued costreductions and exceptional operations in our gas gathering,processing and marketing segment, and in our refining and chemicalsbusinesses,” said Mulva. This resulted in a strong cash flow fromoperations of $707 million, which enabled us to more than cover ourcapital expenditures of $366 million and dividends of $86 million,while reducing debt by $240 million.”

Phillip’s average domestic gas price was $2.33/Mcf, up from$1.75 during the year-ago period. Natural gas liquids pricesaveraged $14.95/barrel, up from $8.36 a year ago.

Gas gathering, processing and marketing net operating income was$39 million, up from $11 million, due to improved margins as aresult of higher natural gas liquids and residue gas sales prices,as well as improved natural gas liquids yields.

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