FINDLAY, Ohio, Dec. 15, 2017 – Marathon Petroleum Corp. (MPC) and MPLX LP (MPLX) immediately announced a definitive agreement for MPC to change its general accomplice (GP) financial interests in MPLX, which include incentive distribution rights (IDRs), for 275 million newly issued MPLX widespread (LP) items valued at approximately $10.1 billion based on the quantity-weighted average price of MPLX over the past 10 days.
The transaction is expected to close on Feb. 1, 2018, subject to and immediately following the closing of the beforehand introduced dropdown of refining logistics assets and fuels distribution companies. Upon closing, MPC will proceed to regulate MPLX through its possession of the non-economic GP curiosity in MPLX and can personal approximately 64 percent of the excellent MPLX widespread models.
The trade simplifies the corporate structure and gives a transparent valuation for MPC`s GP economic interests in MPLX. The change eliminates the GP cash distribution requirements of the partnership and is predicted to be accretive to distributable cash movement attributable to widespread unitholders in the third quarter and for the total yr 2018.
“We’re happy to finish the strategic actions introduced in January with the agreement to alternate MPC`s GP economic interests for LP models, which is able to lead to substantial long-term benefits throughout the enterprise,” stated Gary R. Heminger, chairman and CEO of each MPC and MPLX. “MPLX is properly-positioned to ship long-term growth while maintaining sturdy distribution protection. This change totally aligns the interests of MPC and MPLX and facilitates predictable and rising distributions to all unitholders of MPLX, including MPC.”
“We are enthusiastic about the future for MPLX and the value proposition for our unitholders,” mentioned Michael J. Hennigan, president of MPLX. “The elimination of the quickly rising IDR obligation improves the partnership`s cost of capital permanently. Lindsey We consider this purchase-in creates one of many fastest paths to accretion compared with related GP transactions, and positions the partnership extraordinarily effectively for the future. This transaction and the dropdown will help facilitate our plan to focus on robust distribution coverage and maintain an investment-grade credit profile, each of which enable engaging and sustainable distribution growth for the long-term.”
As well as, MPC has agreed to waive the portion of the fourth-quarter 2017 LP distributions on the new units in excess of what would have been distributable to MPC for its GP financial interests absent this transaction.
This transaction was unanimously accredited by the board of administrators of MPC. The MPLX board additionally unanimously accredited the transaction following particular approval by its independent conflicts committee. The conflicts committee was suggested by Jefferies LLC as to monetary matters and Andrews Kurth Kenyon LLP as to legal matters. MPC was suggested by Citi as to monetary matters and Vinson & Elkins LLP as to authorized matters.
About Marathon Petroleum Company
MPC is the nation`s third-largest refiner, with a crude oil refining capacity of approximately 1.Eight million barrels per calendar day in its seven-refinery system. Marathon model gasoline is offered through approximately 5,600 independently owned retail shops throughout 20 states and the District of Columbia. As well as, Speedway LLC, an MPC subsidiary, owns and operates the nation`s second-largest convenience retailer chain, with approximately 2,730 comfort shops in 21 states. By way of subsidiaries, MPC owns the overall partner of MPLX LP, a midstream master limited partnership. Primarily by MPLX, MPC owns, leases or has ownership pursuits in roughly 10,800 miles of crude oil and mild product pipelines. Additionally via MPLX, MPC has ownership pursuits in gathering and processing facilities with roughly 5.9 billion cubic toes per day of gathering capacity, eight billion cubic ft per day of natural gasoline processing capability and 610,000 barrels per day of fractionation capacity. MPC`s totally integrated system supplies operational flexibility to maneuver crude oil, NGLs, feedstocks and petroleum-associated merchandise efficiently by way of the corporate`s distribution community and midstream service businesses within the Midwest, Northeast, East Coast, Southeast and Gulf Coast regions.
About MPLX LP
MPLX is a diversified, growth-oriented grasp restricted partnership formed in 2012 by Marathon Petroleum Company to own, operate, develop and purchase midstream vitality infrastructure assets. We’re engaged in the gathering, processing and transportation of pure gas; the gathering, transportation, fractionation, storage and advertising and marketing of NGLs; and the transportation, storage and distribution of crude oil and refined petroleum products by a marine fleet and roughly 10,000 miles of crude oil and mild-product pipelines. Headquartered in Findlay, Ohio, MPLX`s property encompass a community of crude oil and products pipeline property located within the Midwest and Gulf Coast areas of the United States; Sixty two gentle-product terminals with roughly 24 million barrels of storage capability; an inland marine business; storage caverns with roughly 2.Eight million barrels of storage capability; crude oil and product storage amenities (tank farms) with roughly 5 million barrels of obtainable storage capability; a barge dock facility with approximately 78,000 barrels per day of crude oil and product throughput capability; and gathering and processing belongings that embrace roughly 5.9 billion cubic toes per day of gathering capacity, 8 billion cubic toes per day of natural gasoline processing capability and 610,000 barrels per day of fractionation capability.
Investor Relations Contacts:
Lisa Wilson (419) 421-2071
Denice Myers (419) 421-2965
Doug Wendt (419) 421-2423
Chuck Rice (419) 421-2521
Katie Merx (419) 672-5159
This press launch contains ahead-looking statements within the meaning of federal securities laws concerning Marathon Petroleum Company (“MPC”) and MPLX LP (“MPLX”). These ahead-looking statements relate to, amongst other things, expectations, estimates and projections regarding the enterprise and operations of MPC and MPLX, together with strategic initiatives and our worth creation plans. You may establish ahead-trying statements by phrases equivalent to “anticipate,” “imagine,” “design,” “estimate,” “anticipate,” “forecast,” “objective,” “steerage,” “suggest,” “intend,” “objective,” “alternative,” “outlook,” “plan,” “place,” “pursue,” “potential,” “predict,” “undertaking,” “potential,” “seek,” “technique,” “target,” “might,” “might,” “should,” “would,” “will” or other similar expressions that convey the uncertainty of future occasions or outcomes. Such ahead-trying statements usually are not ensures of future performance and are subject to dangers, uncertainties and other components, a few of that are beyond the businesses` control and are difficult to foretell. Components that would trigger MPC`s actual outcomes to differ materially from those implied within the ahead-wanting statements embody: the time, costs and capability to acquire regulatory or other approvals and consents and otherwise consummate the strategic initiatives mentioned herein; the satisfaction or waiver of conditions within the agreements governing the strategic initiatives discussed herein; our means to realize the strategic and other goals related to the strategic initiatives mentioned herein; our capacity to generate sufficient income and cash move to impact the supposed share repurchases, together with throughout the expected timeframe; our capacity to manage disruptions in credit markets or changes to our credit rating; the potential impact on our share worth if we’re unable to effect the intended share repurchases; antagonistic adjustments in legal guidelines together with with respect to tax and regulatory matters; continued/further volatility in and/or degradation of market and trade conditions; the impression of antagonistic market conditions affecting MPC`s and MPLX`s midstream businesses; modifications to MPLX earnings and distribution progress goals, and other dangers described under with respect to MPLX; changes to MPC`s capital price range; different risk components inherent to MPC`s industry; and the factors set forth underneath the heading “Threat Components” in MPC`s Annual Report on Form 10-Ok for the year ended Dec. 31, 2016, filed with Securities and Alternate Fee (SEC). Elements that would trigger MPLX`s precise outcomes to differ materially from those implied within the forward-trying statements embody: adverse capital market conditions, together with an increase of the current yield on common models, adversely affecting MPLX`s skill to satisfy its distribution progress steerage; the time, costs and capability to obtain regulatory or other approvals and consents and in any other case consummate the strategic initiatives discussed herein; the satisfaction or waiver of situations in the agreements governing the strategic initiatives mentioned herein; our capacity to attain the strategic and different targets associated to the strategic initiatives mentioned herein; adversarial adjustments in laws including with respect to tax and regulatory issues; the adequacy of MPLX`s capital resources and liquidity, together with, but not limited to, availability of enough money circulate to pay distributions and entry to debt to fund anticipated dropdowns on commercially cheap terms, and the power to successfully execute its business plans and development technique; the timing and extent of adjustments in commodity costs and demand for crude oil, refined merchandise, feedstocks or different hydrocarbon-based mostly products; continued/further volatility in and/or degradation of market and trade situations; modifications to the expected construction prices and timing of initiatives; completion of midstream infrastructure by competitors; the suspension, discount or termination of MPC`s obligations below MPLX`s business agreements; modifications to earnings and distribution growth goals; the extent of help from MPC, including dropdowns, different financing preparations, taking fairness items, and different methods of sponsor help, as a result of the capital allocation wants of the enterprise as a complete and its potential to offer support on commercially cheap terms; changes to MPLX`s capital budget; different threat elements inherent to MPLX`s industry; and the factors set forth underneath the heading “Threat Factors” in MPLX`s Annual Report on Form 10-Okay for the year ended Dec. 31, 2016, filed with the SEC. As well as, the ahead-trying statements included herein might be affected by common home and worldwide economic and political circumstances. Unpredictable or unknown factors not mentioned right here, in MPC`s Type 10-K or in MPLX`s Form 10-Okay could also have material adversarial effects on ahead-trying statements. Copies of MPC`s Form 10-Okay are available on the SEC web site, MPC`s web site at http://ir.marathonpetroleum.com or by contacting MPC`s Investor Relations office. Copies of MPLX`s Form 10-K can be found on the SEC web site, MPLX`s web site at http://ir.mplx.com or by contacting MPLX`s Investor Relations workplace.
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