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Natural gas continues to behave well and is at its high for the year. More importantly, oil prices continue to be able to hold prices over $90 a barrel on WTI, as well as over $110 a barrel on Brent. Marathon Oil (NYSE:MRO) looks like a cheap value play that has upside at these energy price levels.

Marathon Oil operates as an energy company worldwide. Its primary production is in North America, Europe and Africa.

Here are seven reasons why MRO is a buy at under $30 a share:

  1. After falling for months, consensus estimates for FY 2012 and FY 2013 have risen over the past month.
  2. Approximately 80% of the company's production consists of oil and liquids, and Marathon is projecting 5% to 7% CAGR in production from FY 2010 through FY 2016.
  3. Through its capex allocations and asset divestitures, the company is executing against a plan to grow the percentage of its production from geopolitically stable North America (around 42% of current production). It has growing production from the Bakken, Woodford, and Eagle Ford shale regions.
  4. The stock is cheap at just over seven times forward earnings and 17% over book value.
  5. MRO yields 2.3% and is priced at under six times operating cash flow.
  6. S&P has a "buy" rating on MRO, and Credit Suisse has an "outperform" rating with a price target of $37 a share on the stock.
  7. Since bottoming in the second quarter at $24, the stock has shown good momentum (a series of higher lows) and recently crossed its 200-day moving average (see chart).

Click to enlarge image.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in MRO over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.