EL DORADO, Ark. -- Murphy Oil Corp. said that its wholly owned subsidiary Murphy Oil USA Inc. has entered into an agreement with Wal-Mart Stores Inc. and subsidiaries to purchase parcels of property that the company currently leases from Wal-Mart for its Murphy USA retail gasoline stations.
Murphy USA's retail presence currently covers 21 states primarily in the Southeast and upper Midwest. It operates more than 1,000 stations in Wal-Mart parking lots. Separately, Murphy Oil USA also operates about 170 SPUR stations.
Under the [image-nocss] terms of the agreement, the conveyance of the parcels will occur in multiple phases over the next year. Expansion of the Murphy USA program will continue with additional opportunities to purchase new site locations in the future.
In conjunction with this agreement, the company plans to close up to 47 locations and incur after-tax impairment and restoration costs of approximately $18 million in second-quarter 2007 that was not included in previously issued earnings guidance.
Claiborne P. Deming, Murphy Oil's president and CEO, said, The purchase of these parcels reflects our commitment to sustaining the longevity of these very productive assets. We look forward to continuing our association with Wal-Mart as we expand our station base in the future while adhering to our strategy of offering high quality, competitively priced gasoline to our customers.
As a result of this transaction, capital expenditures for the company are expected to increase by up to approximately $315 million during the 2007/2008 period.
In addition to Murphy, Wal-Mart leases parking lot space to San Antonio-based Tesoro Corp. and Philadelphia-based Sunoco Inc. Tesoro uses the Mirastar name at approximately 80 Wal-Mart locations in 13 states, and Sunoco brands its Wal-Mart pumps as Optima at about 30 locations.
In recent years, Wal-Mart has made moves to increase the role of a Wal-Mart proprietary gasoline brand at company-owned stations to complement its anchor partnership with Murphy Oil.
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