Murphy Oil Considering Downstream Spinoff in 2012

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Murphy Oil Considering Downstream Spinoff in 2012


EL DORADO, Ark. -- Murphy Oil Corp. may spin off its downstream division, parent to its 1,128 convenience stores, CEO and President David M. Wood said this afternoon during a company conference call.

"We will visit a separation of our downstream business this year," Wood said. "We will talk with our board and I suspect by the middle of the year, we will know what to do and what the timeline is."

Murphy's move would be just the latest in industry spinoffs, including the previously completed Marathon Petroleum Corp. spinoff from Marathon Oil Co., as well as the planned ConocoPhillips and Phillips 66 spinoff, which could take place as early as May.

Wood said several details need to be discussed before an official spinoff would be announced.

During today's call, Murphy Oil also reported its c-store sales results for the company's fiscal 2011 fourth quarter. Merchandise sales per store totaled $157,425 per month. That compares to $155,443 per store per month during Murphy Oil's 2010 fourth quarter.

Murphy Oil added 29 stores during its 2011 Q4. Another highlight, according to Wood, was the c-store division's 10-cent oil price "rollback" deal with Walmart.

"We ran that program from June through December," he said. "We're excited to continue our program with Walmart." U.S. retail fuel margins also rose to 13 cents per gallon during Murphy Oil's 2011 Q4, compared to 7.4 cents per gallon during its 2010 Q4. Despite a weak December, Wood said Murphy Oil's retail segment had an excellent quarter and 2011 fiscal year.

"We're well poised for future growth [at our retail division]," he added.

As for earnings at the entire company, Murphy Oil lost $113.9 million, compared to net income of $174.1 million during its 2010 Q4. The loss was primarily due to a $368.6-million impairment charge for the Azurite field in the Republic of Congo, the company said.

"We're off to a good start in 2012," Wood said, referring to Murphy Oil as a whole.