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Independent refiner, transporter and marketer firm Marathon Petroleum Corporation (
- Analyst Report
announced the filling of the initial public offering (IPO) for the shares of its wholly owned subsidiary, MPLX L.P., with the Securities and Exchange Commission (SEC).
Marathon Petroleum expects to raise nearly $365 million, to be directed towards expansion and other activities, through the offering. However, the number of shares on offer and the price range have yet to be decided.
The pipeline and storage subsidiary, which was formed by Marathon Petroleum in March, will likely trade on the New York Stock Exchange under the symbol "MPLX."
MPLX L.P. is primarily involved with the acquisition and development of crude oil, refined products and other hydrocarbon-based product pipelines and other associated midstream assets. The partnership will hold 100% interest in a butane cavern in West Virginia along with a 51% stake in a network of crude oil and products pipeline and storage units across Midwest and Gulf Coast regions.
Findlay, Ohio-based Marathon Petroleum came into existence following the 2011 spin-off of Houston, Texas-based Marathon Oil Corporation's ( MRO - Analyst Report ) refining/sales business into a separate, independent and publicly traded entity. Marathon Petroleum operates in three segments: Refining and Marketing, Speedway (Retail) and Pipeline Transportation.
Marathon Petroleum, the fifth largest domestic refiner, exhibits a combined crude oil processing capacity of approximately 1,193,000 barrels per day through its portfolio of six refineries. A major advantage for the company is its proprietary access to pipelines, which inhibits lower-cost competitors from supplying to Marathon Petroleum's key markets.
Additionally, the company possesses one of the healthiest balance sheets among its peers and a robust free cash flow generating ability. The recent commencement of the $2 billion buyback program highlights Marathon Petroleum's commitment to create value for shareholders.
Hence, we believe that Marathon Petroleum is well positioned going forward and view it as an attractive investment as reflected through our long-tern Outperform recommendation.
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