In 2024, MPC will allocate 65% of its capex to grow capital and 35% to sustain capital. (Source: Shutterstock)
Marathon Petroleum Corp. (MPC) eyes standalone capex of $1.25 billion in 2024, down 10% compared to $1.4 billion in 2023 as it focuses on cost reduction and margin enhancement projects.
Spending levels in 2024 are 50% lower than the $2.51 billion in capex in 2019 as MPC focuses on strict capital discipline, the company said Jan. 30 in its quarterly financial press release and presentation.
In 2024, MPC will allocate 65% of its capex to grow capital and 35% to sustain capital. Approximately $825 million used to grow capital will aim to enhance margins and reduce cost, the company said.
MPLX, a midstream master limited partnership in which MPC has an interest, is forecasting standalone capex of $1.1 billion in 2024, MPC said.
MPC owns 13 refineries in 12 states with a processing capacity of 2.9 MMbbl/d. Its refineries ran at a 91% utilization rate in 2023. The total capture rate, which reflects the percentage of refining and marketing margin indicator realized in its reported refining and marketing margin, was 122%, the company said.
MPC expects crude throughputs to average 2.44 MMbbl/d in the first quarter of 2024 and utilizations to average 83%.
“MPC has been the leading refining equity since July 2022, likely attributable to a combination of improved operational performances, deferred planned maintenance, and sector-leading share repurchases,” Well Fargo wrote Jan. 30 in a research report. “MPC’s West Coast/California refining operations are attractive to us given the potential for crack spread outperformance in that region for 2024 to 2026.”
Financial update
MPC reported adjusted net income of $1.5 billion in the fourth quarter of 2023, compared to $3.1 billion in the fourth quarter of 2022 amid lower sales and operating revenues. For the full year, MPC reported adjusted net income of $9.7 billion in 2023 compared to $13.5 billion in 2022.
MPC’s CEO Michael J. Hennigan said in the release that the business generated $14.1 billion of net cash from operations, “driven by strong operational performance and commercial execution” in 2023.
MPC returned $2.8 billion of capital to its shareholders in the fourth quarter of 2023 through $2.5 billion of share repurchases and $311 million in dividends, the company said. Through Jan. 26, MPC repurchased an additional $0.9 billion of its shares, while it has $5.9 billion available under its share repurchase authorizations.
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