Marathon Petroleum (NYSE: MPC), the largest U.S. oil refiner, reported a surge in third-quarter profits on Tuesday as the global fuel supply crunch pushed refining margins to exceptional levels. The company also announced a $4.2 billion deal to sell two refineries and associated infrastructure to Carl Icahn-controlled CVR Energy (NYSE: CVI).
Marathon reported net income of $7.4 billion, compared with $1.4 billion a year earlier. Adjusted earnings reached $26.93 per share, comfortably beating Wall Street expectations of $24.47.
The company’s refining and marketing margin surged to $45.70 per barrel, up from $17.60 a year earlier, as disruptions to Middle Eastern and Russian fuel supplies pushed refined product prices sharply higher.
Marathon operated its refineries at 100% crude capacity utilization during the quarter, processing 3.2 million barrels per day, compared with 3 million bpd a year earlier.
The exceptional profitability reflects a broader windfall for the global refining industry. As Oilprice.com previously reported, Shell’s refining margins also surged during the third quarter as Middle Eastern disruptions and Russian export restrictions tightened global fuel availability.
Separately, Marathon agreed to sell its St. Paul Park refinery in Minnesota and Mandan refinery in North Dakota to CVR Energy. The two facilities have a combined processing capacity of 177,000 bpd.
Marathon will receive $3.45 billion, while its midstream subsidiary MPLX will collect another $750 million for related infrastructure. The proceeds will primarily support investments along the U.S. Gulf Coast.
Commodity trading giant Trafigura will become the exclusive crude supplier to the acquired refineries and has agreed to invest $800 million in CVR.
Marathon also returned $3.3 billion to shareholders during the quarter, increased its dividend by 10%, and expanded its share buyback authorization to $8.1 billion.
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Source: finance.yahoo.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.
