John Fox, Founder, Former Chairman and CEO of MarkWest Energ
DENVER, March 30, 2020 /PRNewswire/ -- John M. Fox, beneficial owner of 1,427,826 common units of MPLX LP and 62,583 shares of Marathon Petroleum Company, today released the following open letter to the board of directors of Marathon Petroleum Corporation (MPC) and MPLX LP (MPLX) outlining his support of management. Mr. Fox believes that recent decisions to appoint Michael Hennigan as CEO of MPC, maintain the current structure and direction of MPLX, and to downsize capex in line with current industry conditions are keys to generating long-term MPC and MPLX value for shareholders, and that the board of directors is working diligently to ensure all of the above are delivered.
Please see disclosures at the end of this release.
The full text of the letter follows:
March 30, 2020
Board of Directors
Marathon Petroleum Corporation
539 S Main St
FINDLAY, OH 45840-3229
To the Board of Directors of Marathon Petroleum Corporation:
I am writing to express my support …
As you know I am the Founder and a former Chairman, Chief Executive Officer and director of MarkWest Energy GP, L.L.C. As of this date, through the merger of MPLX and MarkWest on December 4, 2015, and from follow-on investment, I am the beneficial owner of 1,427,826 common units of MPLX LP and 62,583 shares of Marathon Petroleum Corporation.
In the past I have had some differences with Marathon, but with Gary Heminger's leadership in guiding the company through the Andeavor acquisition and the board's subsequent decision to maintain the MPLX LP structure and to appoint Michael J. Hennigan as the new CEO, Marathon is now positioned for a very robust future. Gary announced in the annual report that the cost synergies from the Andeavor acquisition are ahead of schedule and now amount to $1.4 billion from the initially estimated $1 billion. The spin-off of Speedway's impressive 4,000 convenience store network across the country by the end 2020 is an added bonus.
After careful consideration, the special committee of the board concluded that Marathon's 63% interest in MPLX is best served by keeping the MPLX MLP structure the same. MPLX provides MPC with a steady and growing distribution stream of $1.8 billion per year and helps immensely in mitigating the cyclical nature of the refining business. It is my judgement that as investors learn more about the powerful complementary combination of Marathon and Andeavor, and begin to recognize the underlying value of the growth engine at MPLX, that both MPC and MPLX holders will be well rewarded.
Finally, Michael Hennigan is an excellent choice as the CEO to lead both MPC and MPLX into the future. Not only does he have extensive experience in the refining business from his thirty years of operational, financial planning, and marketing experience at Sunoco Inc., but he has had extensive midstream experience leading MPLX as CEO since 2017. Michael started out as a young engineer at Sunoco's Marcus Hook refinery in 1981 and after a distinguished career and increasing responsibility was named chief executive officer of Sunoco Logistics in 2012.
The COVID-19 virus has been a setback for all of us, but as we emerge from this crisis, I think the financial strength and commitment to operational excellence at MPC and MPLX will lead to attractive shareholder returns. As a shareholder of MPC and a unitholder of MPLX LP, I strongly support the Board's recent decisions for the future of both companies.
About John M. Fox
John Fox is the founder, former CEO, and Chairman of MarkWest Energy GP, L.L.C. ("MarkWest GP"), the general partner of MarkWest Energy Partners, L.P. ("MarkWest"), and beneficial owner of 1,427,826 MPLX common units, and 62,583 shares of Marathon Petroleum Company, through its merger with MarkWest in 2015 and from follow-on investments.
John Fox is providing this material for general informational purposes only. None of the information provided herein is intended to be relied upon as investment advice. The opinions expressed in this letter are those of Mr. Fox as of March 30, 2020 and are subject to change at any time due to changes in market, economic conditions, or new public information. These opinions are Mr. Fox's alone, and do not reflect the opinions of any other member of the Fox family. The information and opinions contained in this material are derived from proprietary and non-proprietary sources deemed by Mr. Fox to be reliable and are not necessarily all-inclusive. Mr. Fox does not guarantee the accuracy or completeness of this information. There is no guarantee that any forecasts made by any party will come to pass. Reliance upon information in this material is at the sole discretion of the reader.
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