Acquisitions, Growth Not Out of the Question for Marathon Oil

Marathon Petroleum Corp.’s (NYSE:MPC)┬áchief executive Gary Heminger said the company’s promise to $2 billion of its own shares doesn’t necessarily mean it plans to stay away from acquisitions and new growth projects, according to MarketWatch.

Heminger said that despite the plan to buy back the shares over the next two years, Marathon Petroleum will have plenty of cash on hand to purchase new refining or retail assets or grow existing ones. At the end of 2011, Marathon Petroleum reported $3.1 billion in available cash.

The buyback plan, announced earlier today, follows recent pressure from investors to do something with part of the huge cash balance the company had been hoarding since its July 2011 spin off from Marathon Oil Corp (NYSE:MRO).

During a call with shareholders, Heminger said the company’s capital budget this year is “strong.” “We will continue to look at opportunities,” he added, “and we think there will
be opportunities in the future.”

In 2012, Marathon Petroleum’s year-over-year capital expenditure budget for its retail segment more than doubled to $353 million. The segment includes 1,375 retail gas stations in seven states, including the Speedway chain, and reported fourth-quarter net earnings of $73 million, up from $65 million a year ago.

Marathon Petroleum’s main refining segment posted a $182 million loss for the fourth quarter and the company reported a net loss of $75 million overall as rising oil prices and low gasoline demand battered profit margins.