Murphy Oil Corporation (MUR - Analyst Report) said its subsidiary, Murphy Oil USA, Inc., has completed the sale of The Superior Refinery to Calumet Specialty Products Partners, L.P. (CLMT - Snapshot Report) for $214 million plus hydrocarbon inventories valued at $220 million, which are subject to certain adjustments.
Murphy's Superior refinery produces gasoline, diesel, asphalt, bunker fuel and specialty petroleum products that are marketed in the Midwest region of the United States, including the surrounding border states, and Canada.
Calumet Specialty Products Partners will finance the deal via issuance of $193 million of Calumet's common units and general partner units and approximately $180 million of Calumet's senior unsecured notes due 2019 and with borrowings of approximately $69 million under Calumet's revolving credit facility.
The company has also sold off its Meraux Refinery to a subsidiary of Valero Energy Corporation (VLO - Analyst Report) for a sales price of $325 million plus the value of hydrocarbon inventory costing $260 million, subject to certain other adjustments.
We believe Murphy has been executing well on its plan to divest the U.S. and U.K. downstream business. As per the strategy, the company has divested both the Superior and Meraux refineries. The company has plans in place to split its U.K. assets, and has a few buyers interested in its Milford Haven asset and the U.K. retail business.
The long-term objective of the company is to place more emphasis on its operational performance and has guided for higher production output of 173,000 barrels of oil equivalent per day for the third quarter of 2011.
Murphy retains a short-term Zacks #3 Rank which translates into a short-term Hold rating. The company competes with Marathon Oil Corporation (MRO - Analyst Report) and Hess Corporation (HES - Analyst Report).
Based in El Dorado, Arkansas, Murphy Oil Corporation engages in the exploration, production, refining and marketing of oil and gas in the U.S. and the U.K.