Morgan Stanley Overweight On Murphy Oil Corporation

Morgan Stanley is out with a research report on Murphy Oil Corporation

and it has an Overweight rating on shares. In a note to clients, Morgan Stanley writes, "MUR announced the sale of the second of its three refineries tonight with two important takeaways: (1) MUR is executing on its asset divestitures where the Street remains skeptical, and (2) this is the second asset sale price that exceeded expectations. We believe today's asset sale is ~$100MM higher than consensus and represents the sale of the asset believed to be the most difficult to sell. Gross proceeds from two asset sales are ~1.1Bn pre-tax and we believe the post-tax amounts are ~950MM. We estimate the remaining assets for sale, Milford Haven + inventory and UK retail, are worth another $500-700MM for total gross proceeds of $1.6Bn-1.7Bn in pre-tax (~$1.5Bn AT) vs. Street ~1.2Bn pre-tax. We expect UK assets to sell in 4Q11. In our view, the restructuring (refining sales and spin-off of retail) will unlock value as sale/spin values exceed the valuation of associated assets in MUR." Shares of MUR lost 4 cents yesterday to close at $53.54.