The return of Phillips 66

Assessing ConocoPhillips And Phillips 66 After The Breakup

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ConocoPhillips' (COP) upcoming spin-off of Phillips 66 (PSX) began trading yesterday, allowing investors to see how the market has valued the two separate pieces.

ConocoPhillips will retain the "upstream" businesses of oil exploration and production, making Conoco a large pure-play on Petroleum. COP closed on a when-issued basis of $57/shr, assigning the parent a $71 billion market cap.

Phillips 66 consists of mid-stream pipelines and collection, refineries, chemicals and some natural gas production assets. Shares closed at $34/shr, assigning a market value of $21.7 billion.

Phillips 66 Looks to Pipes to Blunt Refining Volatility

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Phillips 66 will debut next month as the world’s largest independent refiner by market value. In the future, it may look more like a pipeline and chemical business.

The new Houston-based company, set to begin trading May 1 after its spinoff from ConocoPhillips (COP), plans to boost profit by emphasizing growth in its higher-return businesses and shrink its more volatile fuel processing.

Greg Garland, slated to become chief executive officer, will update investors in a webcast today on its outlook as a standalone company. Phillips 66 is trying to sell its Trainer refinery in Pennsylvania and Alliance plant in Louisiana that provide about a sixth of its capacity.

ConocoPhillips’ Board of Directors Approves Spin-off of Phillips 66

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The two new companies will be separated through the distribution of shares of Phillips 66 to holders of ConocoPhillips common stock. This distribution is expected to occur after market close on April 30, 2012. ConocoPhillips shareholders will receive one share of Phillips 66 common stock for every two shares of ConocoPhillips common stock held at the close of business on the record date of April 16, 2012.

Following the distribution of Phillips 66 common stock, Phillips 66 will be an independent, publicly traded company, and ConocoPhillips will retain no ownership interest. Phillips 66 has received approval for the listing of its common stock on the New York Stock Exchange under the symbol PSX.

Comment: But it won't be the old familiar gas stations.