Marathon profit beats estimates on soaring margins; strikes $4.2 billion refinery deal with CVR (updated)

CVR Energy

Today 11:54

Adds comments, details about divestiture plans throughout, updates share price
Marathon to sell two refineries to CVR
Marathon's refining margin jumps to $45.70 per barrel
Refineries ran at full capacity, lifting total third-quarter throughput to 3.2 million bpd
Trafigura signs agreements to supply oil to CVR's new refineries
NEW YORK, Nov 3 (Reuters) - Marathon Petroleum MPC.N beat Wall Street estimates for third-quarter profit on Tuesday on strong refining utilization and elevated margins, buoyed by fuel supply disruptions due to the wars in Iran and Ukraine.
The Findlay, Ohio-based refiner also announced a deal to sell its St. Paul Park refinery in Minnesota and Mandan refinery in North Dakota to Carl Icahn-controlled CVR Energy CVI.N for $4.2 billion.
     Marathon's shares dipped about 0.5% in afternoon trading.
The Iran war has disrupted oil flows through the Strait of Hormuz, while attacks on energy infrastructure across the Middle East and Russia have tightened fuel supplies, pushing up refined product prices relative to crude.
DIVESTITURE PLANS
Marathon will receive $3.45 billion for the sale of two refineries, while its midstream subsidiary, MPLX MPLX.N, will receive $750 million for related infrastructure.
The refineries have a combined crude processing capacity of 177,000 barrels per day.
The company plans to reinvest sale proceeds into opportunities primarily along the US Gulf Coast, CEO Maryann Mannen said during a call with investors.
Commodities trader Trafigura said it has signed strategic agreements with CVR to support its planned acquisition of the two refineries, becoming their exclusive crude oil supplier.
The refiner's quarterly refining and marketing margin more than doubled to $45.70 per barrel.
Its crude capacity utilization was 100%, with throughput of 3.2 million bpd, compared with 95% utilization and 3 million bpd a year earlier.
For the fourth quarter, Marathon expects total refinery throughput of 3.08 million bpd.
The top US refiner earned $26.93 per share on an adjusted basis, topping analysts' estimates of $24.47, according to LSEG.
Marathon returned $3.3 billion to shareholders during the quarter, raised its quarterly dividend by 10% and increased its share buyback capacity to $8.1 billion with an additional $5 billion authorization.
     

(Reporting by Nicole Jao in New York, Sumit Saha and Arunima Kumar in Bengaluru; Editing by Maju Samuel and Rod Nickel)
((Sumit.Saha@thomsonreuters.com;))