Marathon Petroleum Corp. drops down joint-interest ownership in certain assets to MPLX for $1.05 billion
(Thomson Reuters ONE) -
FINDLAY, Ohio, Sept. 1, 2017 - Marathon Petroleum Corp. (NYSE: MPC) and MPLX LP
(NYSE: MPLX) today closed a transaction in which MPC contributed its joint-
interest ownership in certain pipelines and storage facilities to MPLX for total
consideration of $1.05 billion.
The assets include MPC's ownership interests in:
* Explorer Pipeline Co., representing a 24.51 percent interest in the company
* Lincoln Pipeline LLC, representing a 35 percent interest in the Southern
Access Extension Pipeline (SAX)
* MPL Louisiana Holdings LLC, representing a 40.7 percent interest in the
Louisiana Offshore Oil Port (LOOP)
* LOCAP LLC, representing a 58.52 percent interest in the company
These joint-interest acquisitions are projected to generate approximately $138
million of 2018 adjusted earnings before interest, taxes, depreciation and
amortization (EBITDA). Adjusted EBITDA with respect to the joint-interest
acquisitions is calculated as cash distributions adjusted for maintenance
capital, growth capital and financing activities.
"This dropdown of joint-interest ownership will add further scale and diversity
to MPLX and represents the latest step in our strategic plan, which is designed
to create long-term value for our investors," MPC Chairman and CEO Gary R.
Heminger said.
MPC is contributing these assets in exchange for $630 million in MPLX equity and
$420 million in cash. The equity component of the transaction consists of MPLX
common units and general partner units to maintain MPC's 2 percent general
partner interest in MPLX. The cash portion of the transaction will be funded by
a draw on MPLX's $2.25 billion revolving credit facility. The units are valued
based on the 10-day volume-weighted average price of MPLX common units prior to
the closing.
The total consideration equates to a 7.6-times multiple of the $138 million of
EBITDA these interests are expected to generate in 2018. The transaction is
expected to be immediately accretive to MPLX's distributable cash flow per unit.
The terms of the acquisition were approved by the MPLX Board of Directors
following the approval of the transaction by its independent conflicts
committee. The conflicts committee was advised by Jefferies LLC as to financial
matters and Andrews Kurth Kenyon LLP as to legal matters. MPC was advised by
Tudor, Pickering, Holt & Co. as to financial matters.
###
About Marathon Petroleum Corporation
MPC is the nation's third-largest refiner, with a crude oil refining capacity of
approximately 1.8 million barrels per calendar day in its seven-refinery system.
Marathon brand gasoline is sold through approximately 5,600 independently owned
retail outlets across 19 states. In addition, Speedway LLC, an MPC subsidiary,
owns and operates the nation's second-largest convenience store chain, with
approximately 2,730 convenience stores in 21 states. MPC owns, leases or has
ownership interests in approximately 10,800 miles of crude and light product
pipelines. Through subsidiaries, MPC owns the general partner of MPLX LP, a
midstream master limited partnership. Through MPLX, MPC has ownership interests
in gathering and processing facilities with approximately 5.6 billion cubic feet
per day of gathering capacity, 7.8 billion cubic feet per day of natural gas
processing capacity and 570,000 barrels per day of fractionation capacity. MPC's
fully integrated system provides operational flexibility to move crude oil,
NGLs, feedstocks and petroleum-related products efficiently through the
company's distribution network and midstream service businesses in the Midwest,
Northeast, East Coast, Southeast and Gulf Coast regions.
About MPLX LP
MPLX is a diversified, growth-oriented master limited partnership formed in
2012 by Marathon Petroleum Corporation to own, operate, develop and acquire
midstream energy infrastructure assets. We are engaged in the gathering,
processing and transportation of natural gas; the gathering, transportation,
fractionation, storage and marketing of NGLs; and the transportation, storage
and distribution of crude oil and refined petroleum products. Headquartered in
Findlay, Ohio, MPLX's assets consist of a network of crude oil and products
pipeline assets located in the Midwest and Gulf Coast regions of the United
States; 62 light-product terminals with approximately 24 million barrels of
storage capacity; an inland marine business; storage caverns with approximately
2.8 million barrels of storage capacity; crude oil and product storage
facilities (tank farms) with approximately 5 million barrels of available
storage capacity; a barge dock facility with approximately 78,000 barrels per
day of crude oil and product throughput capacity; and gathering and processing
assets that include approximately 5.6 billion cubic feet per day of gathering
capacity, 7.8 billion cubic feet per day of natural gas processing capacity and
570,000 barrels per day of fractionation capacity.
Investor Relations Contacts:
Lisa D. Wilson (419) 421-2071
Doug Wendt (419) 421-2423
Denice Myers (419) 421-2965
Media Contacts:
Chuck Rice (419) 421-2521
Katie Merx (419) 672-5159
Forward-looking Statements
This press release contains forward-looking statements within the meaning of
federal securities laws regarding Marathon Petroleum Corporation ("MPC") and
MPLX LP ("MPLX"). These forward-looking statements relate to, among other
things, expectations, estimates and projections concerning the business and
operations of MPC and MPLX, including proposed strategic initiatives. You can
identify forward-looking statements by words such as "anticipate," "believe,"
"design," "estimate," "expect," "forecast," "goal," "guidance," "imply,"
"intend," "objective," "opportunity," "outlook," "plan," "position," "pursue,"
"prospective," "predict," "project," "potential," "seek," "strategy," "target,"
"could," "may," "should," "would," "will" or other 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 companies' control
and are difficult to predict. Factors that could cause MPC's actual results to
differ materially from those implied in the forward-looking statements include:
the time, costs and ability to obtain regulatory or other approvals and consents
and otherwise consummate the strategic initiatives discussed herein; the
satisfaction or waiver of conditions in the agreements governing the strategic
initiatives discussed herein; our ability to achieve the strategic and other
objectives related to the strategic initiatives discussed herein; adverse
changes in laws including with respect to tax and regulatory matters; inability
to agree with the MPLX conflicts committee with respect to the timing of and
value attributed to assets identified for dropdown; continued/further volatility
in and/or degradation of market and industry conditions; MPC's ability to
successfully implement growth opportunities; the impact of adverse market
conditions affecting MPC's and MPLX's midstream businesses; modifications to
MPLX earnings and distribution growth objectives, and other risks described
below with respect to MPLX; changes to MPC's capital budget; other risk factors
inherent to MPC's industry; and the factors set forth under the heading "Risk
Factors" in MPC's Annual Report on Form 10-K for the year ended Dec. 31, 2016,
filed with Securities and Exchange Commission (SEC). Factors that could cause
MPLX's actual results to differ materially from those implied in the forward-
looking statements include: negative capital market conditions, including an
increase of the current yield on common units, adversely affecting MPLX's
ability to meet its distribution growth guidance; the time, costs and ability to
obtain regulatory or other approvals and consents and otherwise consummate the
strategic initiatives discussed herein; the satisfaction or waiver of conditions
in the agreements governing the strategic initiatives discussed herein; our
ability to achieve the strategic and other objectives related to the strategic
initiatives discussed herein; adverse changes in laws including with respect to
tax and regulatory matters; inability to agree with respect to the timing of and
value attributed to assets identified for dropdown; the adequacy of MPLX's
capital resources and liquidity, including, but not limited to, availability of
sufficient cash flow to pay distributions and access to debt to fund anticipated
dropdowns on commercially reasonable terms, and the ability to successfully
execute its business plans and growth strategy; the timing and extent of changes
in commodity prices and demand for crude oil, refined products, feedstocks or
other hydrocarbon-based products; continued/further volatility in and/or
degradation of market and industry conditions; changes to the expected
construction costs and timing of projects; completion of midstream
infrastructure by competitors; the suspension, reduction or termination of MPC's
obligations under MPLX's commercial agreements; modifications to earnings and
distribution growth objectives; the level of support from MPC, including
dropdowns, alternative financing arrangements, taking equity units, and other
methods of sponsor support, as a result of the capital allocation needs of the
enterprise as a whole and its ability to provide support on commercially
reasonable terms; changes to MPLX's capital budget; other risk factors inherent
to MPLX's industry; and the factors set forth under the heading "Risk Factors"
in MPLX's Annual Report on Form 10-K for the year ended Dec. 31, 2016, filed
with the SEC. In addition, the forward-looking statements included herein could
be affected by general domestic and international economic and political
conditions. Unpredictable or unknown factors not discussed here, in MPC's Form
10-K or in MPLX'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,
MPC's website at http://ir.marathonpetroleum.com or by contacting MPC's Investor
Relations office. Copies of MPLX's Form 10-K are available on the SEC website,
MPLX's website at http://ir.mplx.com or by contacting MPLX's Investor Relations
office.
Non-GAAP Financial Measures
The EBITDA forecasts were determined on an EBITDA-only basis. Accordingly,
information related to the elements of net income, including tax and interest,
are not available and, therefore, reconciliations of these non-GAAP financial
measures to the nearest GAAP financial measures have not been provided.
MPC and MPLX joint-interest drop:
http://hugin.info/147922/R/2130862/814099.pdf
This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Marathon Petroleum Corporation via GlobeNewswire
Unternehmensinformation / Kurzprofil:
Datum: 01.09.2017 - 12:50 Uhr
Sprache: Deutsch
News-ID 558539
Anzahl Zeichen: 12523
contact information:
Town:
Findlay, Ohio
Kategorie:
Business News
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