Murphy USA set to sell pipeline

Buyer unnamed; 4Q profit $66.7M

Graphs showing Murphy USA Inc. fourth quarter information.
Graphs showing Murphy USA Inc. fourth quarter information.

Murphy USA Inc. said Wednesday that the company will sell a pipeline system for about $85 million to an undisclosed buyer.

Murphy USA also announced its 2015 fourth-quarter financial results. The company posted a profit of $66.7 million, or $1.58 per share, for the quarter, compared with a net income of $98.3 million, or $2.13 per share, during the same period in 2014.

The company reported revenue of $2.9 billion for the period that ended Dec. 31, down from $3.5 billion a year ago.

The pipeline announcement comes a week after Murphy USA said it will not partner with Wal-Mart Stores Inc. on future gas station projects.

The funds from the sale of its CAM pipeline system on the Gulf Coast can be used to help the company grow independently from Wal-Mart Stores Inc., the company said.

"We are excited to execute on our last meaningful non-core asset inherited from the spinoff in 2013, the proceeds of which will free up capital that can be used to help fund our independent growth plan, including our recently announced $500 million share repurchase program," said Murphy USA Chief Executive Officer Andrew Clyde in a prepared statement.

Murphy USA and Wal-Mart will continue to work together at established locations, and Murphy USA will finish building about 60 gas stations on property acquired from Wal-Mart in a 2012 deal between the two.

But the companies will not build new fuel stations together in the future -- a move Clyde has attributed to Wal-Mart's decision to expand its fuel program itself.

Murphy USA has about 1,335 stations. Of those, about 1,100 are at Wal-Mart Supercenters.

The CAM pipeline system moves crude from the Louisiana Offshore Oil Port to three Gulf Coast refineries, including one formerly owned by Murphy Oil Corp.

Murphy USA, a retail-fuel and convenience-store firm, separated from Murphy Oil Corp. and became its own public company in 2013.

The sale of the CAM pipeline system is expected to close in the first half of 2016 pending regulatory approvals.

Murphy USA did not announce who the pipeline is being sold to, saying that it has entered into an agreement with an "undisclosed investment-grade buyer."

"The strategic value of the CAM system has increased significantly with the successful development of onshore oil-shale in conjunction with enhanced economics and optionality for refiners in the current price environment," Clyde said in the statement.

Murphy USA released its fourth-quarter financial results after markets closed. The company's shares gained 1.9 percent Wednesday to close at $58.63 on the New York Stock Exchange.

Benjamin Brownlow, an analyst with Raymond James and Associates, said before Murphy USA posted its earnings at $1.58 per share that he had expected results at per share of 94 cents.

Murphy USA also said Wednesday that the company has finalized the sale of its Hereford ethanol plant in Texas for $98.2 million.

"The company enters 2016 with strong earnings momentum from our major initiatives along with the clear focus of our independent growth plans and a sustained commitment to delivering value to our shareholders," Clyde said in a statement.

Murphy USA will hold a conference call at 10 a.m. today to discuss its quarterly financial results. The call can be accessed at the investor section of the company's website at corporate.murphyusa.com or by calling 1 (877) 291-1367 with conference number 22207109.

Business on 02/04/2016

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