Marathon 3Q15: Closing on MarkWest Merger “Later this Year”
Below is the third quarter 2015 update from Marathon Petroleum Corporation (MPC). Headquartered in Findlay, OH, MPC is the nation’s fourth-largest refiner, with a crude oil refining capacity of approximately 1.7 million barrels per calendar day in its seven-refinery system. Increasingly the oil that MPC refines comes from the Marcellus/Utica. You may recall that MPC is in the process of buying MarkWest Energy for $20 billion, arguably *the* premier midstream company operating in the Marcellus/Utica region (see Midstream Bombshell: MarkWest Sells Itself to Marathon Petroleum). In their 3Q15 update, MPC says they hope to close on the MarkWest buyout “later this year.” That’s the primary reason to bring you MPC’s update. The secondary reason to bring you the update is because MPC owns the Speedway convenience store chain spanning 22 states. Speedway (at least some of them) used to be called Hess. MPC purchased the Hess gas stations/convenience stores from Hess last year this time for $2.8 billion (see Marathon Petroleum Buys the Hess Truck! What Will We Do for Xmas?). Has your local Hess station been renamed to Speedway yet? Ours have in upstate New York…
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Duke Energy, the largest electric power holding company in the United States and a utility with 7.3 million customers in the southeast and Midwest, announced today they are buying Piedmont Natural Gas for $4.9 billion in cash and the assumption of $1.8 billion in existing debt–for a total deal price of $6.7 billion. Piedmont is a midstream and natgas LDC (local distribution company, or utility) with operations primarily in North Carolina, South Carolina and Tennessee. This is the story of a big southern electric utility buying a smaller southern natural gas utility. So why is it important for the Marcellus/Utica? Because Piedmont has been active in two very important pipeline projects in the Marcellus/Utica–and that project ownership will now go to Duke…
In the end, Williams decided that the takeover/merger proposal from Energy Transfer Equities (ETE) wasn’t so indecent after all. In June, ETE’s billionaire CEO Kelsy Warren revealed he had been propositioning Williams for over six months–offering Williams $64 per share to buy the company, totaling $48 billion (see 
Halliburton and Baker Hughes are having a pre-merger garage sale. In order for Halliburton to buy Baker Hughes, a deal worth $34.6 billion (see 
Something we’ve noticed for some time: When Magnum Hunter Resources (MHR) and its subsidiaries (like GreenHunter and Eureka Hunter) make a pronouncement like “such and such will be online next month” or “so and so asset will be sold this quarter” the timing rarely matches the pronouncement. For Magnum Hunter “the next few weeks” turns into “the next few months” and “sometime this quarter, maybe next” turns into “next year.” Somebody else has noticed MHR’s timeline peculiarity too–and has written about it on the Seeking Alpha investors website. This particular post notes that MHR’s CEO Gary Evans announced he would name the winning bidder in the “next week to 10 days” for the Eureka Hunter midstream subsidiary, a deal that will bring in something like $600-$700 million (see 
Basin Energy, which acts as a holding company to invest in (and run) other companies located in the Marcellus/Utica, is based in Bridgeport (Harrison County), WV. Basin’s first acquisition was ProActive Services, an operator of natural gas pipeline compressor stations and other related oilfield services. On Sept. 1, Basin closed a deal on their second subsidiary–the Jane Lew (Lewis County), WV-based Starett’s Well Service, a specialty roustabout services firm, focused on well site and midstream natural gas infrastructure in the Marcellus and Utica Shale regions…
For years MarkWest Energy has been one of the most active midstream companies in the Marcellus/Utica region. MDN has often called MarkWest the premier midstream company in the northeast–with more pipelines and processing plants than any other company, except possibly the recently merged Williams/Access Midstream. Even though MarkWest has a huge portfolio of assets in Ohio, West Virginia and Pennsylvania, and continues to have a big and ambitious list of future projects, it wasn’t enough to stave off a takeover. Marathon Petroleum announced in July they are buying out MarkWest and adding it into their own operations (see 
Finally we know. In June Magnum Hunter Resources (MHR), majority owner of subsidiary pipeline company Eureka Hunter, said it was negotiating to sell all of its ownership of Eureka Hunter to an unnamed buyer for $600-$700 million (see 
The proposed buyout of MarkWest Energy by Marathon Petroleum just took a giant step forward after the Federal Trade Commission and the U.S. Dept. of Justice last Friday signed off on the transaction by granting an “early termination” of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act (HSR Act). Such a notice means “you don’t have to wait the standard length of time for us to complete a review, we’ve completed it and we find nothing to object to.” Unitholders (the equivalent of stockholders) in MarkWest must still approve the buyout, but that doesn’t appear to be an issue…
A couple of interesting tidbits have come to light regarding the impending buyout of MarkWest Energy by Marathon Petroleum, announced in July (see 
Whatever happened to the Halliburton merger/buyout (i.e. shotgun wedding) with Baker Hughes? As we told you in July, the two “love birds” have set a December 1st wedding date (see 
The plot thickens. Last week MDN was the first, and until now the only, source reporting on rumors that CONSOL Energy may sell it’s CNX Gas division (see