Murphy Oil USA Spinoff on Track for Second Half

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Murphy Oil USA Spinoff on Track for Second Half


EL DORADO, Ark. -- Murphy Oil Corp. will file its final paperwork with the U.S. Securities and Exchange Commission (SEC) next week in hopes of receiving approval to spin off its entire U.S. retail division, President and CEO Steven A. Cossè said during the company's first-quarter earnings call today.

In addition to SEC approval, El Dorado, Ark.-based Murphy Oil is seeking a favorable ruling from the Internal Revenue Service regarding the spinoff being a tax-free transaction. Assuming both approvals are received, the spinoff of the retail division, named Murphy Oil USA Inc., will take place in the second half of this year, Cossè confirmed.

Murphy Oil USA has already tapped R. Andrew Clyde to be its president. Included in the potential spinoff would be 1,172 convenience stores and gas stations in 23 states.

"The process for completing the separation of our U.S. retail business in the second half of this year is going according to plan, largely due to the retail management team led by Andrew Clyde," Cossè stated.

Whether the spinoff takes place or not, the chief executive stressed that the company will aggressively open new convenience stores. Murphy Oil Corp. added seven stores in its first quarter ended March 31 and opened 39 new stores in the past year. The company expects to operate 1,235 locations by the end of 2013.

As for the bottom line at Murphy Oil Corp.'s refining and marketing segment -- parent to the convenience store and gas station division -- net income rose to $29.4 million vs. a $7.2 million loss in 2012's first quarter.

"Better than normal" fuel margins per gallon, which increased to 11 cents vs. 7 cents a year earlier, were a primary reason for the significant rise in refining and marketing earnings, relayed Cossè.

On the downside, Murphy Oil Corp.'s gallons sold per store per month, merchandise revenue per store per month, and merchandise margins suffered slight declines. In addition, same-store sales dipped by 1 percent when comparing 2013's first quarter to the year-ago period. But the company noted that the just-completed April month was much better, as it enjoyed a 4 percent same-store sales year-over-year increase.

Companywide, Murphy Oil Corp. earned $360.6 million in its latest quarter, compared to a net income of $290.1 million one year ago.