* Adds a world-scale 451,000 barrel per day refinery
* Includes 100% ownership of cogeneration facility
* Adds four light product terminals, refinery-related pipeline assets and
Colonial Pipeline shipper history
* Assignment of branded-jobber contracts for approximately 1,200 retail
locations
* Expands MPC's integrated operations model
* Expected to be immediately accretive to earnings
FINDLAY, Ohio, Oct. 8, 2012 - Marathon Petroleum Corporation (NYSE: MPC) today
announced it has signed a definitive agreement to purchase BP's 451,000 barrel
per calendar day (475,000 barrel per stream day) Texas City refinery, three
intrastate NGL pipelines originating at the refinery, an allocation of BP's
Colonial Pipeline Company shipper history, four terminals, retail marketing
contract assignments for approximately 1,200 branded sites and a 1,040 megawatt
cogeneration (cogen) facility. The base purchase price is $598 million, plus
inventories estimated at $1.2 billion. The agreement also contains an earnout
provision under which MPC could pay up to an additional $700 million over six
years, subject to certain conditions. The transaction is expected to be
accretive to earnings in the first year of operation. The acquisition is
expected to be funded with cash on hand, and is anticipated to close early in
2013, subject to customary closing conditions and regulatory approvals.
The BP Texas City refinery is one of the largest and most complex in the U.S.,
with a Nelson complexity index of 15.3. The facility is strategically positioned
to provide products throughout the U.S. Gulf Coast, Midwest and Southeast, as
well as into export markets. The refinery has the flexibility to process a wide
range of crude oils, and has access to price-advantaged mid-continent and
Canadian crudes via pipelines as well as waterborne cargoes. The cogen facility
provides steam for the refinery and other local third-party facilities and the
electric power for the refinery, selling any excess to the utility grid. In
addition to the Texas City facilities, the transaction includes three intrastate
NGL pipelines originating at the refinery, shipper history on Colonial pipeline
representing 50,000 barrels per day (bpd) and light product terminals in
Jacksonville, Fla.; Charlotte and Selma, N.C.; and Nashville, Tenn. The
transaction also includes assignment of branded-jobber contracts supplying
approximately 1,200 BP retail locations, representing approximately 64,000 bpd
of gasoline sales, in the southeastern U.S.
"This world-scale refinery and related assets complement our current geographic
footprint and align well with our strategic initiative of growing in existing
and contiguous markets to enhance our portfolio. This acquisition will provide
MPC the opportunity to capture synergies across our existing Gulf Coast
operations; optimize commercial and process improvements; expand our retail
presence in the Southeast; and enhance our ability to sell products into export
markets," said MPC President and Chief Executive Officer Gary R. Heminger. "The
acquisition of these assets at an attractive price provides the opportunity to
add significant long-term value to our shareholders. We are pleased that MPC's
financial performance and cash generation allow us to continue our balanced
approach of making value-enhancing investments in the business and returning
capital to our shareholders."
Heminger also stated, "We have a long-standing commitment to safe and
environmentally-conscious operations. BP has made significant investments to
improve the safety, reliability and environmental performance of the refinery in
recent years. We will leverage those investments in the refinery with our
continuing focus on safe and reliable operations. In addition, we have been a
part of the Texas City community for many years through our Texas City refinery,
and this acquisition will deepen our commitment to that area."
Conference Call
At 11:30 a.m. EDT today, MPC will hold a webcast and conference call to discuss
this transaction. Interested parties may listen to the conference call on MPC's
website at http://www.marathonpetroleum.com by clicking on the "Conference Call
Oct. 8" link in the upper right corner of the page.
Additional materials concerning the transaction, including a slide presentation,
can be found prior to the conference call on MPC's website at
http://www.marathonpetroleum.com by clicking on the "Conference Call Oct. 8"
link in the upper right corner of the page or by hovering over the "Investor
Center" link, selecting "Events and Presentations" from the drop-down menu and
clicking "I Agree" on the "Terms of Use" page. Replays of the conference call
will be available on the company's website through Tuesday, Oct. 22.
###
About Marathon Petroleum Corporation
MPC is the nation's fifth-largest refiner, with a crude oil capacity of
approximately 1.2 million barrels per calendar day in its six-refinery system.
Marathon brand gasoline is sold through more than 5,000 independently owned
retail outlets across 18 states. In addition, Speedway LLC, an MPC subsidiary,
owns and operates the nation's fourth largest convenience store chain, with
approximately 1,460 convenience stores in seven states. MPC also owns, leases or
has ownership interests in approximately 8,300 miles of pipeline. MPC's fully
integrated system provides operational flexibility to move crude oil, feedstocks
and petroleum-related products efficiently through the company's distribution
network in the Midwest, Southeast and Gulf Coast regions. For additional
information about the company, please visit our website at
http://www.marathonpetroleum.com.
Investor Relations Contacts:
Pamela Beall (419) 429-5640
Beth Hunter (419) 421-2559
Media Contacts:
Angelia Graves (419) 421-2703
This release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements relate to, among other things, MPC's current expectations concerning:
the completion and timing of the acquisition of the BP Texas City, Texas
refining and cogen facilities, certain inventories and logistics and marketing
assets, including, without limitation, the receipt of regulatory approvals and
satisfaction of other closing conditions; and the potential earnings and synergy
projections, including the transaction being accretive to earnings. Such
forward-looking statements are not guarantees of future performance and are
subject to risks, uncertainties and other factors, some of which are beyond the
company's control and are difficult to predict. Factors that could cause actual
results to differ materially from those in the forward-looking statements
include regulatory and other approvals and the failure of either party to
satisfy conditions to closing the transaction. Additionally, the forward-looking
statements included herein could be affected by general domestic and
international economic and political conditions, as well as factors set forth
under the heading "Risk Factors" in MPC's Annual Report on Form 10-K for the
year ended December 31, 2011 filed with the Securities and Exchange Commission
(the "SEC"). Unpredictable or unknown factors not discussed here or in MPC's
Form 10-K could also have material adverse effects on forward-looking
statements. Copies of MPC's Form 10-K are available on the SEC website, at
http://www.ir.marathonpetroleum.com or by contacting MPC's Investor Relations
Office.
MPC to Purchase BP's Texas City Refinery and Related Assets:
http://hugin.info/147922/R/1647136/530965.pdf
This announcement is distributed by Thomson Reuters on behalf of
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(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Marathon Petroleum Corporation via Thomson Reuters ONE
[HUG#1647136]