Murphy Oil USA Will Spin Off in Later Part of This Year

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Murphy Oil USA Will Spin Off in Later Part of This Year


EL DORADO, Ark. -- Murphy Oil Corp. will spin off its retail marketing division in the second half of this year, the company’s President and CEO Steven A. Cossè revealed during its 2012 fourth-quarter earnings call this afternoon.

The chief executive said the company is working diligently to separate the retail division, which will be named Murphy Oil USA Inc. "We filed with the SEC [Securities and Exchange Commission] in December and are waiting to hear if the spinoff can be a tax-free transaction," Cossè stated. "We expect to hear an answer by mid-year."

Assuming the SEC approves the transaction as non-taxable for shareholders, Murphy Oil Corp. will complete the spinoff soon after.

Once separated, Murphy Oil USA will have 1,165 U.S. convenience stores and gas stations. As CSNews Online reported earlier this month, R. Andrew Clyde has been appointed CEO of the new retail company. "Andrew Clyde is very experienced and will provide great leadership," Cossè commented during today’s earnings call.

Despite the transition period to a standalone company, he noted that Murphy Oil USA already has an aggressive goal of adding 65 to 70 more locations by the end of 2013.

Murphy Oil's refining and marketing division, parent to its convenience stores and gas stations, generated a profit of $157.6 million in the fourth quarter, ending Dec. 31, compared to a profit of $190.3 million in its 2011 fourth quarter. The company cited weaker retail marketing margins and "significantly lower margins for ethanol production operations" as the top reasons for lower earnings in the division.

U.S. retail merchandise sales per month improved to $154,730 in Murphy Oil's 2012 Q4, compared to $157,425 during the same period in 2011. Retail fuel margins per gallon at U.S. locations increased to 14.1 cents in the company's latest quarter vs. 13 cents in 2011’s fourth quarter.

Companywide, Murphy Oil reported a 2012 Q4 net income of $158.7 million, compared to a net loss of $113.9 million during the same period the prior year. Lower impairment charges and income tax benefits associated with operating losses in two foreign countries were cited by the company as the main reasons for the significant profit increase.