A Look at MPC’s Stock Performance and Capex Plans



MPC’s stock performance

Marathon Petroleum’s (MPC) stock price, amid volatility, rose in 2015. The stock gained 30% in the trailing twelve months to November 30, 2015.

MPC’s stock price surged with the announcement of the merger of MPLX LP (MPLX) and MarkWest Energy Partners (MWE) in July 2015. After that, the stock price fell. However, it gained momentum again due to better-than-estimated 3Q15 numbers in October 2015.

However, from December 1, 2015, to January 22, 2016, MPC’s stock lost 28%. This was on the back of the abolition of the crude oil export ban in the United States, which raised fears of a fall in US refineries’ margins. During the same period, MPC’s peers Tesoro (TSO), Valero Energy (VLO), and Phillips 66 (PSX) lost 23%, 6%, and 14%, respectively. For refining sector stocks, you could consider the iShares US Energy ETF (IYE), which has ~10% exposure to the sector. IYE has MPC, VLO, TSO, and PSX in its portfolio.

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MPC’s capex plan

In 2015, Marathon Petroleum (MPC) was expected to incur capex of $2.5 billion. In the first nine months of 2015, MPC incurred $1.4 billion in capex. The remaining is likely to have been incurred in 4Q15. In 2016, MPC plans to incur capex of $4.2 billion.

Capex in refining is directed at optimizing synergies in refineries. MPC will accomplish this by integrating its Gulf Coast refineries, improving its process performance, and expanding its refined product export market.

MPC’s Speedway segment’s capex aims at remodeling its stores and expanding its footprint in existing and new regions. In the Pipeline Transportation segment, MPC plans to expand and maintain the natural gas and pipeline portfolio of MarkWest Energy (MWE).


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