In today's edition, energy analyst Joel South discusses Murphy Oil's recent decision to spin off its downstream retail segments. The company closed the day up around 8% as the market believes this decision will unlock tremendous value for the company. This decision has been expected after Third Point hedge fund manager Dan Loeb, who's also a 5% owner of Murphy Oil, announced two weeks ago that he believes the company could add 60% more value by divesting its retail segments, as well as some Canadian natural gas and oil sands assets.
By splitting off its downstream operations, Murphy Oil, like a number of integrated oil companies before it, will be able to focus its priorities and efficiently allocate capital in order to maximize shareholder value.
