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Marathon Petroleum To Maintain Midstream Structure; Names Michael Hennigan CEO

Marathon Petroleum Corp. (MPC) said Wednesday that its board of directors has unanimously decided to maintain the company's current midstream structure, with the company remaining the general partner of MPLX LP (MPLX).

The company noted that the announcement concludes a comprehensive evaluation of its midstream business that included extensive input from multiple external advisors and significant feedback from investors.

Marathon Petroleum noted that a separation would introduce likely tax costs of $1 billion or more depending on the scenario, and MPLX debt restructuring costs of up to $500 million. In addition, increased earnings volatility and market valuation risks would be anticipated for both MPC and MPLX, post-separation.

Mike Stice, chair of the special committee of the Board that led the midstream review process, said, "Looking forward, we are excited to provide a clear path for our business. We believe in MPLX's strategic focus on free cash flow generation, and distributions from our continued ownership of MPLX will remain an important, through-cycle source of cash for MPC."

Marathon Petroleum also said it has appointed Michael Hennigan as president and chief executive officer of the company, with immediate effect. Hennigan will join the company's board of directors following the company's 2020 annual meeting of shareholders on April 29, 2020.

As MPC's new president and CEO, Hennigan brings 38 years of energy industry experience in the refining and midstream space, including nearly three years with MPLX LP. Hennigan will continue to serve as president and CEO of MPLX GP LLC, the general partner of MPLX.

The company's board intends to announce the selection and appointment of a new, non-executive chairman in conjunction with the AGM on April 29, 2020. As announced last October, current Chairman and Chief Executive Officer Gary Heminger will retire in April after 45 years of service to the company.

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