Elliott Funding Administration LP complained Tuesday earlier than Delaware’s Courtroom of Chancery accusing Phillips 66 of “gamesmanship” within the run-up to the refiner’s yearly assembly of shareholders.
“Regardless of Elliott privately requesting affirmation, Phillips has nonetheless not disclosed what number of seats might be up for election or who its nominees might be, requiring Elliott to file a grievance with a purpose to protect its shareholder rights”, Elliott stated in an announcement. “The Firm’s present gamesmanship round its administrators follows the Firm’s earlier failure to honor its representations made to Elliott – courting again to February 2024 – that it will appoint a mutually agreed-upon director with vitality expertise.
“In its grievance, Elliott states that if the Firm ends its defensive maneuvers and confirms that at the least 4 director seats might be up for election on the 2025 Annual Assembly, Elliott intends to withdraw the grievance and now not proceed with the litigation”.
- Advertisement -
The assertion added, “This choice for gamesmanship and disrespect for stockholder rights demonstrated by Phillips reinforces why change is urgently wanted on the Board to ensure that the Firm to realize its full value-creation potential”.
Phillips 66 has but to answer to a remark request emailed by Rigzone.
Earlier this month Elliott stated it has nominated seven candidates with the “best-in-class expertise in refining and midstream operations”, together with an Elliott associate, for election to Phillips 66’s board. Elliott desires them to remain on the board till 2028.
The investor, which has a declared funding of over $2.5 billion in Phillips 66, has been pushing for portfolio simplification, an operational overview and stronger oversight, citing “persistent underperformance”.
“The director nominees introduced at the moment will deliver the best expertise and goal views to the Board because it executes one of the best path ahead for the Firm, together with by bolstering accountability and enhancing oversight of administration initiatives”, Elliott stated March 4.
The nominees are Brian Coffman, ex-chief govt of Motiva Enterprises and former senior vp (SVP) for refining at Andeavor; Sigmund Cornelius, former SVP and chief monetary officer of ConocoPhillips; Michael Heim, co-founder and former president and chief working officer of Targa Sources; Alan Hirshberg, former govt VP for manufacturing, drilling and tasks at ConocoPhillips; Gillian Hobson, former capital markets associate at Vinson & Elkins; Stacy Nieuwoudt, former vitality and industrials analyst at Citadel; and John Pike, associate at Elliott.
Elliott on the time additionally introduced a non-binding proposal for Phillips 66 to institute annual director elections.
“Over 5 of the final 9 years, the Firm has put ahead a number of proposals to declassify the Board – all of which obtained robust stockholder assist (together with 99 % of the shares voted in 2023) however failed to realize the 80 % supermajority threshold of shares excellent to permit for a Constitution modification”, Elliott stated.
Two of Phillips 66’s 14 seating administrators, 13 of whom are impartial in accordance with the corporate, have determined to not stand for re-election, in accordance with a disclosure with the Securities and Trade Fee (SEC) February 12.
In a letter to shareholders March 5, Phillips 66 defended its board, highlighted its progress towards operational targets and stated it’s dedicated to transparency and accountability.
“However, we stay totally dedicated to constructive engagement and discovering a path ahead with Elliott that may profit all shareholders”, Phillips 66 stated.
“The Board constantly and aggressively evaluates the portfolio and different alternate options with a view to maximizing long-term shareholder worth – and is prepared to take decisive motion to realize this objective”, it added.
For the fourth quarter of 2024 Phillips 66 noticed refining losses deepen to $775 million from $108 million for the prior quarter. For the fourth quarter of the prior 12 months, Phillips 66’s refining enterprise logged $814 million in web revenue.
Realized refining margins averaged $6.08 a barrel within the October-December 2024 interval, down from $8.31 for the prior quarter and $14.41 for the corresponding quarter in 2023.
Phillips 66 posted $8 million in web revenue for the fourth quarter of 2024, a dramatic fall from $1.26 billion for a similar three-month interval in 2023.
Phillips 66 saved its crude capability utilization secure at 94 % between the third and fourth quarters of 2024.
Refining turnaround bills dropped sequentially from $137 million to $123 million.
When adjusted for extraordinary or nonrecurring gadgets, the refining phase lands at a $759 million web loss for the fourth quarter of 2024, in comparison with a $67 million web loss for the third quarter of 2024.
Earlier than curiosity, tax, amortization and depreciation deductions, the refining phase had an adjusted web lack of $298 million, in comparison with an adjusted web revenue of $188 million for the previous quarter.
“Refining adjusted pre-tax loss elevated [quarter-on-quarter] primarily attributable to a decline in realized margins largely pushed by decrease market crack spreads and accelerated depreciation related to the deliberate ceasing of operations on the Los Angeles Refinery, partially offset by a better clear product yield”, Phillips 66 stated in its quarterly report printed January 31, 2025.
Phillips 66 introduced October 16, 2024, it will stop manufacturing at its Los Angeles refinery by the tip of 2025, with chief govt Mark Lashier citing uncertainty from “market dynamics”.
To contact the creator, e-mail jov.onsat@rigzone.com
