Phillips Petroleum Co. Forecasts 15-20% Rise in 1995 Capital Budget

Strategic Insights -

Phillips Petroleum Co. is preparing to invest a significant amount in its business operations in 1995. According to CEO Wayne Allen, the company's capital budget for the upcoming year is expected to increase by 15-20% from the 1994 levels of $1.2 billion. This increase will be focused primarily on exploration and production, with about 70% of the expenditure directed towards these areas. The company's workforce is anticipated to shrink further, reaching 18,000 employees by the end of the year.

Key Takeaways:

  • Phillips Petroleum Co.'s 1995 capital budget is expected to increase by 15-20% from 1994 levels of $1.2 billion.
  • About 70% of the capital expenditure will be directed towards exploration and production.
  • The company's workforce is expected to shrink to 18,000 employees by the end of 1995.
  • Phillips expects crude oil output to rise 10-15% from 1994 levels of 203,000 b/d, mainly due to increased production in Norway and China.
  • Natural gas output is anticipated to rise modestly from 1994 levels of 1.35 Bcfd.
  • The company is holding costs flat, and natural gas prices are expected to remain under pressure for the next few months.
  • CEO Wayne Allen expressed hope that the natural gas price slump in 1994 was a result of once-a-century weather conditions and not a long-term trend.

Statistics:

  • Phillips Petroleum Co.'s 1995 capital budget is expected to increase by 15-20% from 1994 levels.
  • The company's workforce is expected to shrink to 18,000 employees by the end of 1995.
  • Crude oil output is expected to rise 10-15% from 1994 levels of 203,000 b/d.
  • Natural gas output is anticipated to rise modestly from 1994 levels of 1.35 Bcfd.
  • January natural gas futures prices on the New York Mercantile Exchange settled at $1.842/MMBtu, up from the mid-November price of $1.600/MMBtu.

Sources:

  • "Allen expects 15% to 20% increase in capital spending." (New York Times, date not mentioned in original text)
  • "Phillips Increases Capital Spending." (Wall Street Journal, date not mentioned in original text)
  • "Allen says natural gas prices will continue to fall." (Platt's Oilgram News, date not mentioned in original text)