Purchase of BP's Texas City Refinery and Related Assets Closes
FINDLAY, Ohio, Feb. 1, 2013 - Marathon Petroleum Corporation (NYSE: MPC) today announced that it has closed the transaction with BP to purchase several assets, including a 451,000 barrel per calendar day refinery located in Texas City, Texas. The refinery will be renamed and referred to in future MPC communications as the Galveston Bay refinery. Additionally, the transaction includes a 1,040 megawatt cogeneration facility, four light product terminals located in the Southeast, retail marketing contract assignments for approximately 1,200 branded sites representing approximately 61,000 barrels per day (bpd) of gasoline sales, three operating intrastate natural gas liquids pipelines originating at the refinery and a 50,000 bpd allocation of BP's Colonial Pipeline Company shipper history.
The transaction was initially announced on Oct. 8, 2012. The base purchase price is approximately $598 million, plus inventories valued at approximately $1.1 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.
"This is a unique opportunity to acquire, at an attractive price, a world-scale refinery on the western Gulf Coast that is well positioned to benefit from the growing supply of North American crude oil," said MPC President and Chief Executive Officer Gary R. Heminger. "The refinery and related assets should enhance our current footprint by integrating well with our existing operations. This transaction will provide MPC the opportunity to grow in contiguous markets, expand our export opportunities and further optimize our Gulf Coast operations. We believe this transaction will create long term value for our shareholders."
"As our history has shown, our focus will remain on the safe and environmentally responsible operations of all of our facilities. We look forward to providing quality products and services to meet the needs of our new branded jobbers. We welcome all of our new employees at the Galveston Bay refinery and product terminals," said Heminger.
About Marathon Petroleum Corporation
MPC is the nation's fourth-largest refiner, with a crude oil refining capacity of approximately 1.7 million barrels per calendar day in its seven-refinery system. Marathon brand gasoline is sold through approximately 5,000 independently owned retail outlets across 17 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. Through subsidiaries, MPC owns the general partner of MPLX LP, a midstream master limited partnership. 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
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, estimates and projections concerning: MPC business and operations, the potential earnings and synergies of the acquired assets, MPC's ability to successfully integrate the assets into its operations and the assets being accretive to earnings. You can identify forward-looking statements by words such as "should," "would," "will," "expect" or similar expressions that convey the uncertainty of future events or outcomes. 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: volatility in and/or degradation of market and industry conditions; the availability and pricing of crude oil and other feedstocks; slower growth in domestic and Canadian crude supply; changes in transportation logistics; the availability of materials and labor, the reliability of processing units and other equipment; and other risks customary to the industry. 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.
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Source: Marathon Petroleum Corporation via Thomson Reuters ONE