Updated Version 2 - Marathon's quarterly performance exceeds expectations, to sell two refineries to CVR Energy

(Details of performance and asset divestitures supplemented)

Reuters, November 3 - Marathon Petroleum MPC.N reported third quarter profit that beat Wall Street expectations on Tuesday, mainly driven by strong refining margins, and reached a $4.2 billion deal to sell two refineries and related midstream assets to Carl Icahn-controlled CVR Energy CVI.N.

Marathon Petroleum's share price rose about 2% in pre-market trading.

The Iran conflict has disrupted oil shipments through the Strait of Hormuz, while attacks on energy infrastructure across the Middle East and Russia have tightened fuel supplies, driving up the price of refined products relative to crude oil.

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The resulting surge in refining margins has boosted refinery profitability, creating attractive opportunities for Marathon to monetize assets and for CVR to expand its operations.

Marathon's refining and marketing margin more than doubled this quarter to $45.70 per barrel.

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The company’s crude capacity utilization was 100% with a throughput of 3.2 million barrels per day (bpd), compared to 95% utilization and 3 million bpd a year ago.

Marathon expects total Q4 refinery throughput at 3.08 million barrels per day.

According to LSEG, the largest U.S. refiner reported adjusted earnings per share of $26.93, beating analysts’ expectations of $24.47.

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Marathon returned $3.3 billion to shareholders in the quarter, raised its quarterly dividend by 10%, and increased its share buyback authorization to $8.1 billion with an additional $5 billion authorization.

Asset Divestiture Plan

Marathon will receive $3.45 billion from selling the St. Paul Park refinery in Minnesota and the Mandan refinery in North Dakota, while its midstream unit MPLX (MPLX.N) will receive $750 million from selling related infrastructure.

The two refineries have a combined crude processing capacity of 177,000 barrels per day.

Marathon plans to primarily reinvest the proceeds in the U.S. Gulf Coast, while MPLX will direct its proceeds to growth projects in the Permian Basin and Marcellus Shale Basin.

Commodity trader Trafigura has agreed to (link) invest $800 million to subscribe for newly issued CVR shares to gain a minority stake.

Trafigura will also become the exclusive crude oil supplier and trading intermediary for the acquired refineries, and has signed an offtake agreement for petroleum products.

The transaction is expected to be completed by the end of 2026.

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