The OilSpot News by DTN
Monday, October 11, 2010 VOLUME 9 ISSUE 424  

FRONT PAGE
St. Paul Park Refinery being Sold
Marathon to Sell Minnesota Downstream Assets for about $900 Million

St. Paul Park Refinery

Marathon Oil Corp. announced on Oct. 6 that wholly owned subsidiary, Marathon Petroleum Company, has entered into definitive agreements with ACON Investments, LLC and TPG Capital, L.P., to sell most of its Minnesota downstream assets for approximately $900 million.

The assets included in the transaction will be the 74,000 bpd St. Paul Park refinery and associated terminals, 166 SuperAmerica convenience stores—including six in Wisconsin, SuperMoms, LLC, SuperAmerica Franchising LLC, interests in pipeline assets in Minn., and associated inventories.

This agreement follows the signing of a letter of intent on May 19. ACON and TPG formed Northern Tier Energy LLC to operate the assets as a stand-alone company. Marathon anticipates closing will occur by year-end, contingent upon the buyers meeting the conditions of their financing arrangements and other customary conditions.

The total sales value of the transaction is approximately $900 million including Northern Tier preferred stock with a stated value of $80 million. Approximately $300 million of the total sales value is for the inventories associated with these operations.

The agreement also contains earnout and margin support components where Marathon could receive up to an additional $125 million over eight years, or may be required to provide up to $60 million of margin support to buyers, subject to certain conditions. Any margin support paid may be recovered by an increase in the total earnout amount.

“This proposed sales is part of Marathon’s ongoing efforts to ensure the company’s asset portfolio is strategically aligned with its business plans while maintaining its position as one of the leading refining, marketing and transportation operations in the nation,” the release read. “MPC expects to continue to be one of the largest suppliers of finished products in the Midwest and Southeast through its remaining refining, distribution and marketing system.”

Marathon anticipates closing will occur by year-end, contingent upon the buyers meeting the conditions of their financing arrangements and other customary conditions.

Based in Houston, Marathon, the fourth largest United States-based integrated oil company and the nation’s fifth largest refiner, is an integrated international energy company engaged in exploration and production; oil sands mining; integrated gas; and refining, marketing and transportation operations. Marathon has principal operations in the U.S., Angola, Canada, Equatorial Guinea, Indonesia, Libya, Norway, Poland and the United Kingdom.


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