NEW YORK (Reuters) - Oil prices rose on Monday, bouncing off early losses as Israeli Prime Minister Benjamin Netanyahu said Israel had proof that “Iran lied” about its nuclear weapons capability, and that he was sure U.S. President Donald Trump would do “the right thing” in reviewing the country’s nuclear deal with western powers.

Brent crude futures LCOc1 were up 61 cents at $75.04 a barrel by 1:43 p.m. EDT.

U.S. West Texas Intermediate (WTI) futures CLc1 were up 80 cents on the day at $68.90 a barrel.

Earlier in the session, both benchmarks had been down about 1 percent. Both started to gain after Netanyahu said he would soon have an announcement regarding Iran.

“Oil reacted very severely” to Netanyahu’s announcement, said Phil Flynn, analyst at Price Futures Group in Chicago.

Oil prices jumped after Netanyahu said Israel has evidence that Iran lied about its nuclear program after signing the 2015 agreement with global powers.

“Netanyahu may be the flavor of the day, but the larger issue driving this is what will Trump do with Iran? And what will Iran do in response? And that uncertainty is the fundamental driver, not so much Netanyahu,” said Walter Zimmerman, chief technical analyst for United-ICAP.

Trump has until May 12 to decide whether to restore sanctions on Iran that were lifted after the international agreement.

Oil prices have risen this month to their highest since late 2014, driven by concern over potential disruptions to Iranian crude flows. Analysts said the market is extremely sensitive to any developments on the nuclear deal and sanctions.

“Until May 12, you’re not going to see any significant downward correction,” PVM Oil Associates strategist Tamas Varga said. “Reimposing U.S. sanctions is not a foregone conclusion just yet.”

U.S. drillers added five oil rigs in the week to April 27, bringing the total count to 825, the highest since March 2015, General Electric’s Baker Hughes energy services firm said.

Crude production in the United States has hit a record 10.59 million barrels per day. C-OUT-T-EIA

In the latest development in the U.S. shale boom, Marathon Petroleum Corp (MPC.N) agreed to buy rival Andeavor (ANDV.N) for more than $23 billion. The largest-ever tie-up between U.S. refiners will give the combined company a nationwide presence and increased access to growing export markets.

The deal gives Marathon more exposure to U.S. shale, thanks to Andeavor’s existing logistics and terminal operations in Texas and North Dakota shale regions.</s>Why did this happen?

Please make sure your browser supports JavaScript and cookies and that you are not blocking them from loading. For more information you can review our Terms of Service and Cookie Policy.</s>Marathon will become the largest independent U.S. refiner

Marathon Petroleum Corp. agreed to buy rival oil refiner Andeavor for $23.3 billion, in a deal that could create the largest independent fuel maker in the U.S.

The offer, payable in either cash or shares, values Andeavor at about $152.27 a share, the companies said in a statement on Monday. That’s about a 24 percent premium over Friday’s closing price. The Wall Street Journal first reported the acquisition on Sunday.

“This transaction combines two strong, complementary companies to create a leading U.S. refining, marketing, and midstream company, building a platform that is well positioned for long-term growth and shareholder value creation,” Marathon Chairman and Chief Executive Officer Gary Heminger said in a statement on Monday.

Marathon’s geographic footprint is focused in the U.S. Midwest and Gulf Coast, while Andeavor’s refineries and pipelines are in western states. They are among the biggest beneficiaries of the shale boom, as the rapid growth in oil production has given them access to abundant supplies at a discount to global prices. Independent operators also reaped fatter profits from the recent overhaul of the U.S. tax code, and the Standard & Poor’s 500 Index of oil refiners reached an all-time high last week.

The CEO expects annual cost and operating synergies of about $1 billion within the first three years. Given projected cash-flow generation, Marathon’s board also approved share buybacks of $5 billion.

The boards of both companies unanimously approved the deal, which is expected to close in the second half of this year, subject to regulatory and shareholder approvals.

Findlay, Ohio-based Marathon Petroleum is the third-largest U.S. refiner by market capitalization, valued at about $38.6 billion, according to data compiled by Bloomberg. San Antonio, Texas-based Andeavor, formerly known as Tesoro Corp., is the fourth-largest, worth $18.7 billion. Phillips 66 is the largest U.S. independent refiner, valued at $51.9 billion.

Heminger’s counterpart at Andeavor, Gregory Goff, will become executive vice chairman.

The combined company would also overtake Valero Energy Corp. to become the biggest in terms of U.S.-based oil refining capacity. At almost 2.93 million barrels a day, that’s about 16 percent of the nation’s total, according to Bloomberg calculations using Energy Information Administration data as of Jan. 1, 2017.</s>Billionaire Paul Foster looks to be the biggest financial winner in the megadeal announced this morning to combine Marathon Petroleum and Andeavor into the nation’s biggest oil refiner.

Foster founded Western Refining and last year sold it to Andeavor (formerly called Tesoro) for $6.4 billion. The El Paso-based Foster has been steadily selling Andeavor shares, but still has 6.5 million of them, according to SEC filings. Marathon is offering Andeavor holders 1.87 shares of stock or $152.27 per share in cash, a 24% premium over last week’s close. That makes Foster’s cache worth $988 million, contributing the lion’s share of his Forbes-estimated net worth of $1.76 billion.

Not bad for a guy who got his start in the oil fields as a teenager welding pipes, digging ditches and cleaning tanks. The Baylor graduate and CPA handled the books for a number of small refineries across the Southwest before he and partners took over bankrupt El Paso Refining in 1992, which led to the creation of Western. Back then there was no telling the renaissance that would come to the oil-rich Permian basin of west Texas and New Mexico, where Western’s assets were focused.

Andeavor CEO Greg Goff will become executive vice chairman of Marathon. He has roughly 760,000 shares, worth about $120 million.

Gary Heminger, the longtime CEO of Marathon Petroleum, who spun the company out of Marathon Oil in 2012, and will lead the combined companies, has shares worth about $230 million. Heminger, 64, is a lifelong Marathon man, having started work at the company as a records storage clerk 43 years ago. He led the refining giant’s spin out from “upstream” focused Marathon Oil in 2011, and since laid out $2.8 billion to acquire 1,200 filling stations from Hess and $14 billion to absorb pipeline operator MarkWest into its midstream division. Since the spinout, Marathon Petroleum has bought in about $10 billion of shares; two years ago I profiled Marathon in Forbes Magazine as one of “America’s Best Employers.”

The newly combined company will be the biggest refiner in the nation, processing 3 million bpd at 16 refineries spread across the country and selling fuel via 7,800 branded filling stations. Add up the shares of Marathon plus Andeavor to the value of their midstream master limited partnerships (which will continue to trade separately as MPLX and ANDX) and the whole operation will have an enterprise value of roughly $90 billion. According to a morning note from analysts at Tudor, Pickering & Holt, “we do not foresee any regulatory problems given the disparate geographical markets of each company.”

America’s longtime refining leader Valero Energy will drop to the no. 2 spot with 2.6 million bpd of processing capacity. Then it’s ExxonMobil with 1.7 million bpd, Phillips 66 (itself spun out of ConocoPhillips) with 1.9 million, then Shell and Chevron with about 900,000 bpd each. The single biggest refinery in the U.S. is located in Port Arthur, Tex. and owned by Saudi Aramco via its Motiva division. It handles more than 600,000 bpd.

Amid rising oil prices and strong demand for fuels, it’s a fine time to be an American oil refiner. Shares in Marathon are up more than 50% in the past year, while Andeavor shares have risen 75%. Spurred by record domestic oil production surpassing 10 million bpd, U.S. exports of finished petroleum products have more than doubled in the past decade to 3.6 million bpd.</s>Marathon Petroleum Corp agreed to buy rival Andeavor for more than US$23 billion in the largest-ever tie-up between U.S. refiners, giving the combined company a nationwide presence and increased access to growing export markets.

REUTERS: Marathon Petroleum Corp agreed to buy rival Andeavor for more than US$23 billion in the largest-ever tie-up between U.S. refiners, giving the combined company a nationwide presence and increased access to growing export markets.

The deal gives Marathon more exposure to the booming U.S. shale oil sector, thanks to Andeavor's existing logistics and terminal operations in Texas and North Dakota shale regions. Rising output from west Texas's Permian has driven U.S. crude production to an all-time record above 10.5 million barrels per day (bpd).

"The combination of the two companies allows us to go after and find ways to create a bigger presence in the Permian," said Marathon Chief Executive Gary Heminger, who will lead the combined companies.

The company would leapfrog Valero Energy Corp to become the largest U.S. refiner, with the capacity to process 3.1 million bpd of crude oil into gasoline, diesel and other fuels.

The deal also gives Marathon a line into fast-growing Mexican fuel markets. Andeavor is expanding its network of filling stations in the country. Mexico's dilapidated refineries cannot meet the growing population's demand for gasoline and other products. U.S. fuel exports to Mexico had risen to 1.4 million bpd as of January, up more than 85 percent from two years ago.

The deal values Andeavor, formerly known as Tesoro, at about US$152 per share, or about 24 percent more than Friday's closing price of US$122.38.

"We view this as pretty full value for Andeavor," Scotia Howard Weil analysts said in a note. "Not many saw this one coming."

Shares of Ohio-based Marathon fell US$3.76, or 4.6 percent, to US$77.71 a share, even after the board approved an additional US$5 billion share buyback. It also missed Wall Street forecasts for quarterly profit by a wide margin on Monday as expenses rose.

Shares of Andeavor, based in San Antonio, were up around 16 percent at US$141.30.

Including Andeavor's debt, Marathon is paying US$35.6 billion to hold 66 percent of a combined company worth some US$58 billion at Friday's close.

Andeavor operates 10 refineries in the United States, largely in the western part of the country. It has pipeline, trucking and terminal operations in the Permian, along with North Dakota's Bakken region, the second-most prolific state for oil production in the country after Texas.

Marathon's six refineries are largely in the Midwest, with one locale in Texas City, Texas. Analysts at Tudor Pickering Holt said they expected the location of the two companies' operations to allow them to avoid antitrust hurdles.

"Despite the size of Marathon-Andeavor, we do not foresee any regulatory problems," they wrote in a note.

Operations that have capacity to refine light crude, such as Andeavor, will be better positioned to take advantage of the production boom.

Andeavor is expanding a retail network of motor fuel stations in the Mexican states of Baja California and Sonora under its ARCO brand.

U.S. Gulf Coast refiners are becoming more integrated in the region's energy industry, filling shortages created by underinvestment in refining across Latin America.

"There's no question the new company has greater resource capability going forward into Mexico," Andeavor Chief Executive Gregory Goff said on a conference call with analysts.

The companies did not spell out Goff's role, but the Andeavor executive said he would likely be involved in operations and technology.

The deal is expected to close in the second half of this year.</s>(Reuters) - Marathon Petroleum Corp agreed to buy rival Andeavor for more than $23 billion in a deal creating one of the largest global refiners that will benefit from access to booming U.S. shale fields and growing U.S. fuel export markets.

The United States has become the world's top fuel exporter, shipping more than 3 million barrels per day (bpd) of gasoline and diesel. Refiners have capitalized on booming output from shale fields in Texas and North Dakota and are building out export terminals and processing facilities.

Buying Andeavor gives Marathon more exposure to the booming U.S. shale oil sector, thanks to Andeavor's logistics and terminal operations in Texas and North Dakota shale regions. Rising output from the Permian Basin, the largest oilfield in the United States, has driven the nation's crude production to an all-time record above 10.5 million bpd.

"The combination of the two companies allows us to go after and find ways to create a bigger presence in the Permian," said Marathon Chief Executive Gary Heminger, who will lead the combined companies.

The company would be able to process 3.1 million bpd of crude oil into gasoline, diesel and other fuels. Its capacity would be the sixth largest globally, behind China's Sinopec, Exxon Mobil Corp, PetroChina, Royal Dutch Shell and Aramco, according to consultancy IHSMarkit.

U.S. motorists consume more fuel than any other country in the world and overall demand nationwide hit a record 9.3 million bpd in 2017.

Operations that have capacity to refine light crude produced in shale fields such as Andeavor will be better positioned to take advantage of the production boom. Both North Dakota's Bakken and Texas shale regions primarily produce light, sweet crude oil.

The deal also gives Marathon a line into fast-growing Mexican fuel markets. Andeavor is expanding its network of filling stations in the country. Mexico's dilapidated refineries cannot meet the growing population's demand for gasoline and other products.

U.S. fuel exports to Mexico rose to 1.4 million bpd as of January, up more than 85 percent from two years ago.

The deal values Andeavor, formerly known as Tesoro, at about $152 per share, or about 24 percent more than Friday's closing price of $122.38.

"We view this as pretty full value for Andeavor," Scotia Howard Weil analysts said in a note. "Not many saw this one coming."

Shares of Ohio-based Marathon lost $6.52, or 8 percent, to close at $74.91 a share. It also missed Wall Street forecasts for quarterly profit by a wide margin on Monday as expenses rose.

Shares of Andeavor, based in San Antonio, closed up 13 percent at $138.32.

Including Andeavor's debt, Marathon is paying $35.6 billion to hold 66 percent of a combined company worth some $58 billion at Friday's close.

Andeavor operates 10 refineries in the United States, largely in the western part of the country. It has pipeline, trucking and terminal operations in the Permian and in the Bakken region, the second-most prolific state for oil production in the country after Texas. (To see an image from the companies, click here: https://reut.rs/2JFgc58)

"This creates one coast-to-coast, border-to-border refining and marketing company that seems well balanced with a pretty broad footprint," said Garfield Miller, CEO of Aegis Energy Advisors.

Marathon's six refineries are largely in the Midwest, with one in Texas City, Texas. The Midwest region has reduced its reliance on crude oil from the Gulf Coast in recent years, pulling more of its barrels from Canada and North Dakota. Now, it is producing more products than it needs and has looked to export markets for additional opportunity.

Analysts at Tudor Pickering Holt said they expected the location of the two companies' operations to allow them to avoid antitrust hurdles.

Combining the companies' logistics subsidiaries will not happen immediately, Marathon CEO Gary Heminger said on a conference call following the transaction. He referred to that combination as a "day two issue."

Andeavor is expanding a retail network of motor fuel stations in the Mexican states of Baja California and Sonora under its ARCO brand.

U.S. Gulf Coast refiners are becoming more integrated in the region's energy industry, filling shortages created by underinvestment in refining across Latin America.

"There's no question the new company has greater resource capability going forward into Mexico," Andeavor CEO Gregory Goff said on a conference call with analysts.

The deal, which is expected to close in the second half of this year, could spur other North American refiners to look harder at acquisitions, said IHSMarkit refining and marketing director Rob Smith.

"This may end up being the biggest of the bunch," said Smith. "But it would not be surprising to see other mid-tier companies merge."</s>Marathon Petroleum Corp said on Monday it would buy rival Andeavor for more than US$23 billion, forming a company that will leapfrog Valero Energy Corp as the largest independent U.S. refiner by capacity.

The cash-and-stock deal marries operations that are broadly complementary in terms of geography as well as giving Marathon extra capacity in the U.S. light crude produced by a booming shale oil sector.

The deal values Andeavor, formerly known as Tesoro, at about US$152 per share, a premium of about 24 per cent to closing prices on Friday, driving shares in the San Antonio-based firm 14 per cent higher in premarket trading on Monday.

Marathon shareholders were less upbeat, knocking 5 per cent off the company’s stock price despite the board approving an additional US$5 billion share buyback.
• North West Refining withdrawing proposal to expand Sturgeon Refinery – for now

“We view this as pretty full value for Andeavor,” analysts from Scotia Howard Weil said in a note. “Not many saw this one coming.”

The proposed combination would be the largest in refining since Holly Oil acquired Frontier Corp in 2011, but analysts at Tudor Pickering Holt said they expected the location of the two companies’ operations to allow them to avoid antitrust hurdles.

“Despite the size of Marathon-Andeavor, we do not foresee any regulatory problems,” they wrote in a note on the deal.

Shale oil fields have pushed U.S. crude production to record highs and industry experts argue operations that have capacity to refine light crude like Andeavor will be better positioned to take advantage of the boom.

Andeavor also runs refineries in Alaska, California, Minnesota, New Mexico, North Dakota, Texas, Utah and Washington which should complement Marathon’s largely eastern plants.

Including Andeavor’s debt, Marathon is paying US$35.6 billion to hold 66 per cent of a combined company worth some 58 billion at closing stock market prices on Friday.

It will have the capacity to process about 3.1 million barrels per day along with a large network of filling stations and oil and natural gas pipelines.

Marathon Chief Executive Gary Heminger, who oversaw a 20 per cent rise in net profit in the first quarter, will run the combined company, with a senior role for Andeavor’s chief executive, Gregory Goff.

“Each of our operating segments are strengthened through this transaction,” Heminger said in a statement.

“It geographically diversifies our refining portfolio into attractive markets……enhances our midstream footprint in the Permian basin, and creates a nationwide retail and marketing portfolio,” he added.

In a separate release on Monday, Marathon missed Wall Street forecasts for quarterly profit by a wide margin, as its expenses jumped 15 per cent on the back of a surge in refining driven by the boom in U.S. crude production.

The Andeavor deal is expected to close in the second half of this year.</s>Findlay, Ohio-based Marathon Petroleum Corp. agreed to buy rival oil refiner Andeavor for $23.3 billion in a deal that would create the largest independent fuel maker in the U.S.

The offer, payable in either cash or shares, values San Antonio-based Andeavor at about $152.27 a share, the companies said in a statement on Monday morning, April 30. That's about a 24% premium over the closing price on Friday, April 27.

Marathon, which has a refinery in Canton, is focused in the Midwest and Gulf Coast, while Andeavor's refineries and pipelines are in western states. They are among the biggest beneficiaries of the shale boom, with access to abundant supplies at a discount to global prices. The combination would overtake Valero Energy Corp. as the biggest in U.S.-based oil refining capacity, generating about 16 percent of the nation's total, according to Bloomberg calculations.

"Wow!," wrote Matthew Blair, director of refining research at Tudor Pickering Holt & Co., in a report that called Andeavor a "big winner" in a deal that is "extremely positive." As for Marathon, big synergies will be key, Blair said, adding that regulatory problems should be minimal, "given the disparate geographical markets of each company."

"This transaction combines two strong, complementary companies to create a leading U.S. refining, marketing, and midstream company, building a platform that is well positioned for long-term growth and shareholder value creation," Marathon chairman and CEO Gary Heminger said in a statement on Monday.

The CEO expects annual cost and operating synergies of about $1 billion within the first three years. Given projected cash-flow generation, Marathon's board also approved share buybacks of $5 billion. Heminger's counterpart at Andeavor, Gregory Goff, will become executive vice chairman.

The boards of both companies unanimously approved the deal, which is expected to close in the second half of this year, subject to regulatory and shareholder approvals. The Wall Street Journal first reported the acquisition on Sunday, April 29.

Marathon's shares fell 5.2% in pre-market trading to $77.19, while Andeavor jumped 17% to $143.

Marathon is the third-largest U.S. refiner by market capitalization, valued at about $38.6 billion, according to data compiled by Bloomberg. Last year the company sold 5.8 billion gallons of fuel through its Speedway convenience store chain.

Marathon's financial adviser in the deal was Barclays, and its legal adviser was Cleveland-founded Jones Day. Andeavor's financial adviser was Goldman Sachs & Co. and its legal adviser was Sullivan & Cromwell.</s>(Reuters) - Marathon Petroleum Corp said on Monday it would buy rival Andeavor for more than $23 billion to form a company that would leapfrog Valero Energy Corp as the largest U.S. refiner by capacity.

The cash-and-stock deal values Andeavor at about $152 per share, representing a premium of about 24 percent to Andeavor stock’s Friday close.

The combined company will have the ability to process about 3.1 million barrels per day and have a large network of retail stations, oil, natural gas and refined products pipelines.

The deal is expected to produce $1 billion of synergies, Marathon said.

Marathon Chief Executive Gary Heminger will run the combined company, with a senior role for Andeavor’s chief executive, Gregory Goff.

San Antonio, Texas-based Andeavor, formerly known as Tesoro, operates 10 refineries in the western United States with a refining capacity of about 1.2 million barrels per day, and ownership in a logistics business, according to Andeavor website.

Valero, which has similar overall refining capacity of 3.1 million barrels per day, has refineries in Canada and Britain apart from the United States.</s>A new powerhouse has been born in the oil industry just as prices spring back to life.

Marathon Petroleum reached a $23 billion deal on Monday to scoop up rival Andeavor, creating the largest oil refinery in the United States.

The combined company will be able to process more than 3 million barrels of crude per day, representing 16% of the nation’s total capacity. Marathon also owns the Speedway, the No. 2 gasoline and convenience store chain in the United States.

The energy deal underscores the health of the refining business thanks to soaring appetite for gasoline that has kept their facilities humming.

“For this industry, the wind is behind our backs,” Andeavor CEO Greg Goff told analysts during a conference call.

Global oil demand grew during the first three months of 2018 by the most in nearly eight years, according to Goldman Sachs.

“The state of refining in the United States is very healthy,” said Matt Smith, director of commodity research at ClipperData.

Marathon agreed to pay $30.4 billion for Andeavor, including debt. That would make it the biggest global oil and gas deal since General Electric’s $32 billion takeover of Baker Hughes in October 2016, according to research firm Dealogic.

Soaring oil prices — crude has climbed above $68 a barrel for the first time in nearly four years — has accelerated US shale oil production, giving refiners access to more supply.

The Andeavor acquisition not only shows confidence in the oil price rally, but represents a bet on the US shale oil boom. Andeavor owns two refining plants located near the Permian Basin, the shale hotbed in West Texas and New Mexico that is pumping more and more oil.

One of the other catalysts for the deal: a 2020 rule change that will prevent ships from burning dirty fuel oil. The switch should boost demand for cleaner fuels that US refiners are able to produce.

“US refiners are the most sophisticated in the world so they will be well-positioned for the shift in demand,” said ClipperData’s Smith.

If approved by regulators and shareholders, the deal will allow Marathon to expand its refining footprint, which is focused in the Gulf Coast and the Midwest. Andeavor, by contrast, owns multiple refineries in California and the Pacific Northwest.

“Despite the size… we do not foresee any regulatory problems given the disparate geographical markets of each company,” Matthew Blair, an analyst at energy investment bank Tudor, Pickering, Holt & Co., wrote to clients.

Marathon and Andeavor said the transaction is expected to close by the end of the year.

The sale marks a huge win for Goff, a former ConocoPhillips exec who took over as Andeavor’s CEO in May 2010 when the stock fetched less than $14. Now, Marathon has agreed to purchase the company for $152.27 a share, a 24% premium to Friday’s closing price.

The deal “closes out an epic run for Goff” and represents an “unqualified success for management,” Blair wrote.
Marathon Oil purchases Andeavor for $23.3 billion, creating the biggest oil refining firm in the United States.