Murphy Oil Corporation
) has completed the spin-off of its U.S. downstream subsidiary,
Murphy Oil USA, Inc. ("Murphy USA"). Currently, Murphy USA is
working as an independent entity and will trade on the New York
Stock Exchange under the ticker symbol "MUSA" on Sep 3, 2013.
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Murphy Oil is currently focusing more on the exploration and
production activities, hence spinning-off its U.S. retail
marketing division seems quite appropriate in the present
Per the spin-off agreement, the shareholders of Murphy Oil will
receive one share of Murphy USA common stock in exchange of every
four shares of Murphy Oil, at the close of business on the record
date of Aug 21, 2013.
Post spin-off, Murphy USA's headquarters will remain in El
Dorado, Arkansas. The company will engage in retail fuel products
marketing and convenience merchandise through a large chain of
retail gasoline stations. As of Jun 30, 2013, the company has
1,179 retail fuel stations. Most of the fuel stations are
) stores, primarily in the Southern and Midwestern U.S.
Murphy Oil will become an independent exploration and production
company. The company will primarily be operating in the U.S.,
Canada, Malaysia, Australia and other international locations.
The company will continue its exploration program and offshore
development projects in the North American onshore operations,
primarily in the Eagle Ford Shale.
As of Jun 30, 2013, Murphy Oil had cash balance of approximately
$1 billion and net cash provided by operating activities of $1.7
billion during the first six months of 2013. A strong financial
position will enable the company to manage its present
This spin off will help both the companies to allocate its assets
and reorganize the existing resources as per their own market
conditions and priorities. We believe this transaction will
subsequently enable both the companies to concentrate on their
own strategic preferences and identify their capability for
Post transaction, we believe both the companies will focus on
achieving reasonable revenues, improving their cost structure,
and maintaining robust margins and strong liquidity position,
Murphy Oil currently has a Zacks Rank #3 (Hold). However, other
stocks from the industry that are presently performing well
TransAtlantic Petroleum Ltd.
) with a Zacks Rank #1 (Strong Buy), and
), each with a Zacks Rank #2 (Buy).
Murphy Oil engages in the exploration, production, refining and
marketing of oil and gas in the U.S. and several international