[StBernard] Murphy Oil announces sale of smallest refinery

[Westley Annis]

Murphy Oil announces sale of smallest refinery

Mon, Jul 25 2011

(Updates with detail, background; adds byline)

By Kristen Hays

HOUSTON, July 25 (Reuters) - Murphy Oil Corp (MUR.N: Quote, Profile,
Research, Stock Buzz) announced on Monday it sold the smallest of its three
refineries for $214 million plus inventory, bringing the company a step
closer to shedding refining to focus solely on exploration and production.

The company said Indianapolis, Indiana-based Calumet Specialty Products
Partners L.P. (CLMT.O: Quote, Profile, Research, Stock Buzz), a U.S. refiner
of specialty products such as petroleum waxes and solvents, would buy
Murphy's 34,300 barrel-per-day (bpd) oil refinery in Superior, Wisconsin.

The inventory was valued at $260 million as of June 30, the company said. El
Dorado, Arkansas-based Murphy said the deal was expected to close late in
the third quarter or in the fourth quarter this year.

Murphy's shares were unchanged in post-market trading on the New York Stock
Exchange at $69.52 per share.

A year ago, Murphy announced it would sell its three refineries and exit
that business. The other plants, a 125,000 bpd refinery in Meraux,
Louisiana, and a 130,000 bpd refinery in Milford Haven, Wales, remain for
sale.

While Murphy is seeking to sell all of its refineries, two of its larger
integrated peers chose to spin off refining and marketing arms into separate
companies.

Marathon Oil Corp's (MRO.N: Quote, Profile, Research, Stock Buzz) refining,
transportation and marketing arm split off into Marathon Petroleum Corp
(MPC.N: Quote, Profile, Research, Stock Buzz) on June 30. Earlier this
month, ConocoPhillips (COP.N: Quote, Profile, Research, Stock Buzz), the
smallest of the so-called super-majors, said it would spin off its refining
arm next year, creating the largest U.S. independent refining and
exploration and production companies.

The Wisconsin refinery benefits from cheap crude priced off of depressed
West Texas Intermediate, the U.S. crude futures benchmark. A glut of crude
at the Cushing, Oklahoma, delivery point of the New York Mercantile Exchange
contract has kept the WTI at a double-digit discount to London's Brent crude
for months, giving Midwest refiners access to cheaper crudes than peers in
other regions.

"Meraux is five times bigger, but will probably sell for only double
Superior, but the inventory value could be much higher," said Fadel Gheit,
an analyst with Oppenheimer & Co.

He expects the Meraux plant to sell sometime in the third quarter this year
and the Wales plant in the first quarter next year. The total net after tax
proceeds for all three plants could top $1 billion, he added. (Reporting by
Kristen Hays; editing by Andre Grenon)