Marathon Oil - The Financial History (2022 edition)
What’s up Chronicle Crew.
Before we begin, you know what to do. Take the poll below.
69 votes last week with 78% bullish and 22% bearish
For your next trivia night, if the question comes up who are the present descendants of the Standard Oil Trust (HERE) you can answer:
ExxonMobil (HERE)
Chevron (HERE)
BP (HERE) - acquired SOHIO, Amoco
ConocoPhillips (HERE) - the Conoco half
AND Marathon Oil.
Marathon, formerly Ohio Oil, was founded in 1887 to compete with Standard Oil Company. Oil production in Ohio was set to explode driven by the discovery of the Lima Oil Fields.
By the turn of the century, Rockefeller was starting to lose his monopolistic control of the industry as the center of U.S. production was shifting west; first to Ohio, later California and eventually Texas and Oklahoma.
The company was known as “The Ohio” and quickly became the largest producer in the state so Standard Oil purchased the company in 1889.
Lima crude was high in sulfur and priced at a substantial discount to its lighter counterpart, Oil City PA crude. So there were definitely economic incentives to crack the refining code.
Standard had the capital budgets and with the help of a German chemist named Herman Frash they figured out how to refine the “skunk crude” of Ohio.
Much of the state’s oil would be refined in the Whiting Refinery. It is truly amazing that the facility is still in operation after all these years (HERE)
But after the dissolution of Standard Oil in 1911, The Ohio Company had to find its own way.
It’s remarkable that Marathon has managed to remain independent for this long. Well, sort of. They were acquired by US Steel at the peak in 1981.
Carl Icahn would force US Steel to list a separate share class for the energy portion of the steel giant, USX-Marathon.
Finally US Steel would spin off the company right before the 2000’s super-cycle.
Buy High in 1981, Sell Low in 2001. Back to independence.
In 2011, the company would shed it’s downstream assets into Marathon Petroleum Corp.
Below is a history of MRO oil and gas production since 1930.
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