Marathon Oil: What To Expect In 2016
Richard Zeits • 20 Comments
Richard Zeits • 20 Comments
Marathon Oil: Moving Towards A U.S.-Centric Resource Play Portfolio
Richard Zeits • 18 Comments
Richard Zeits • 18 Comments
Fri, Feb. 26, 9:17 AM
- Gainers: RRM +49%. SUNE +31%. AMTG +31%. SGMS +27%. STMP +26%. GOL +19%. SPLK +17%. JCP +16%. HLF +13%. BIDU +11%. SYN +10%. GLBL +8%. WLL +9%. FCX +7%. CHK +7%. PANW +8%. NRF +6%. TCK +6%. MRO +6%. KHC +6%. GRPN 5%. HLT 5%.
- Losers: RJET -83%. PPHM -60%. CARA -36%. WTW -28%. SWN -14%. GG -11%. FOLD -9%. RBS -8%. MNKD -6%. ARI -5%.
Tue, Feb. 23, 6:41 PM
- Exxon Mobil (NYSE:XOM) and ConocoPhillips (NYSE:COP) make the grade as the Top Picks among E&P stocks at Wells Fargo, while Occidental Petroleum (NYSE:OXY) remains Buy rated but is pulled as a Top Pick.
- Wells raises its valuation range for XOM to $89-$98, citing the company's large size and capitalization as assets that will help at a time of capital constraints in the sector.
- COP is “not out of the woods,” as Wells estimates it will outspend cash flows this year and likely will be hit by credit downgrades, but the firm sees a “clear path” to generate free cash flow in 2017.
- OXY is up more than 20% in the past month, so it is off the Top Pick list due to valuation.
- Wells also sees an equity capital raise as an increasingly likely outcome for Marathon Oil (NYSE:MRO) and possibly for Murphy Oil (NYSE:MUR) after last week’s credit rating downgrade by Moody’s.
Wed, Feb. 17, 6:29 PM
- Marathon Oil (NYSE:MRO) +3.5% AH after reporting a Q4 loss in-line with expectations and better than expected revenue of $1.48B.
- MRO says Q4 net production averaged 432K boe/day, roughly flat Q/Q and up 8% Y/Y, but the cost of production fell 28% Y/Y.
- MRO sees total FY 2016 production coming in 6%-8% lower than 2015, amid plans to cap spending on capital projects at $1.4B compared with $3B spent in 2015, which was ~$500M below the outlay the company originally planned.
- MRO says it expects to sell $750M-$1B in assets this year, compared with its previous projection of non-core asset sales of at least $500M.
Wed, Feb. 17, 5:47 PM
- North Dakota's crude oil production fell in December for the first time in three months, down 2.5% to 1,152,280 bbl/day, as oil producers begin to acknowledging the low-price reality rolling over the entire energy industry.
- Only 41 drilling rigs are operating in the state as of Wednesday, the lowest level since July 2009, and North Dakota producers have cut back requests to drill new wells, with only 78 permitted in January compared to 125 in November.
- Bakken shale exposure includes: CLR, HES, WLL, STO, OAS, MRO, EOG, XOM, NOG, CHK, DNR, SM, NFX, OXY, MUR, OXY, COP, SSN, CXO, EOX
Wed, Feb. 17, 4:36 PM
Tue, Feb. 16, 5:35 PM| Tue, Feb. 16, 5:35 PM
Thu, Feb. 11, 2:44 PM
- More dividend cuts and equity raises are coming for oil and gas stocks such as Apache (APA -4.3%), Devon Energy (DVN -5.1%), Encana (ECA -5.7%), Anadarko Petroleum (APC -6.2%) and Marathon Oil (MRO -5.1%), as management teams have become more willing to take stronger steps to strength balance sheets, Barclays believes.
- The firm views 4x debt to pre-interest cash flow as a warning sign that companies may have leverage concerns, at which roughly half of its energy coverage universe remains overlevered.
- Barclays thinks Canadian Natural Resource (CNQ -4.4%) likely will maintain its dividend, while Occidental Petroleum (OXY -0.8%) has the financial strength to maintain or even increase the dividend.
- The firm sees leveraged companies such as DVN, ECA and Range Resources (RRC -3%), and companies with large deficits including DVN and APC as most likely to consider raising equity; it also thinks MRO, WPX Energy (WPX -7.8%), Southwestern Energy (SWN -7.7%), Continental Resources (CLR +0.2%), Noble Energy (NBL -2%) and Newfield Exploration (NFX -1.2%) could issue equity; APA, CNQ, OXY, EOG Resources (EOG -0.9%) and Pioneer Natural Resources (PXD -0.3%) are considered unlikely to issue equity this year.
Tue, Feb. 9, 12:58 PM
- Crude oil at $30/bbl is blowing a hole in the insurance that U.S. shale drillers bought to protect themselves against a crash, Bloomberg reports.
- Companies including Callon Petroleum (CPE -5.6%), Noble Energy (NBL -3.5%), Pioneer Natural Resources (PXD -3.6%), Marathon Oil (MRO -8%), Rex Energy (REXX -1.8%) and Bonanza Creek Energy (BCEI -11.4%) used a three-way hedge strategy that does not guarantee a minimum price if oil falls below a certain level; while three-ways can be cheaper than other hedges, they leave drillers exposed to sharp declines and risk worsening a cash shortfall for companies trying to survive the worst oil crash in 30 years.
- For example, CPE CFO Joseph Gatto told investors in December that the company had hedged ~4K bbl/day in 2016, or 40% of its projected output, at $56/bbl; roughly half of those contracts are worth significantly less at $30/bbl because CPE employed three-ways.
Wed, Feb. 3, 5:17 AM
- Just ten days after Moody's put over half a trillion dollars in energy debt on review for downgrade, S&P decided it wanted to be the first one out of the gate.
- Companies that saw their ratings cut by one notch: Chevron (NYSE:CVX), Apache (NYSE:APA), Continental Resources (NYSE:CLR), Devon Energy (NYSE:DVN), EOG Resources (NYSE:EOG), Hess (NYSE:HES), Hunt Oil, Marathon Oil (NYSE:MRO), Murphy Oil (NYSE:MUR) and Southwestern Energy (NYSE:SWN).
- Oil futures settled below $30 a barrel again on Tuesday, but prices have taken a positive turn this morning after two days of steep declines.
- Previously: Moody's places 175 oil, gas and mining companies on review for downgrade (Jan. 22 2016)
Thu, Jan. 28, 9:23 AM
- Gainers: NEOS +59%. DNR +17%. BCEI +16%. UA +16%. FB +14%. INO +13%. ATHX +12%. PBR +12%. WLL +11%. MRO +10%. [[PBR-A]] +10%. TRXC +9%. CHK +9%. MLNX +9%. LINE +9%. MT +9%. SDRL +8%. HOG +8%. ETE +8%. STO +8%. CRUS 7%. KMI 7%. BBL 6%. HCA 6%. MJN 6%. CJES 6%. PYPL 6%.
- Losers: NOW -22%. OSIS -22%. EBAY -11%. INVN -10%. URI -10%. INCY -9%. JNPR -10%. OAS -7%.
Wed, Jan. 27, 4:44 PM
- Marathon Oil (NYSE:MRO) declares $0.05/share quarterly dividend, in line with previous.
- Forward yield 2.29%
- Payable March 10; for shareholders of record Feb. 17; ex-div Feb. 12.
Mon, Jan. 25, 6:49 PM
- Investment in Canada’s oil and gas industry is forecast to fall again this year, as the price of the heavy crude produced from Alberta's oil sands has fallen so low that some companies are losing money on every barrel they sell, and are looking at ways to cut production.
- The Canadian Association of Petroleum Producers predicts the industry will invest C$42B in 2016, 13% less than in 2015 and 48% less than in 2014 - a steeper decline than investment in oil and gas production worldwide, which is expected to drop by 40% during 2014-16, according to Wood Mackenzie.
- On top of plummeting prices, Alberta's new left-leaning government plans to cap carbon emissions from the oil sands, a move that threatens to strand billions of barrels of crude; companies including Exxon (NYSE:XOM), BP, Chevron (NYSE:CVX), ConocoPhillips (NYSE:COP), Shell (RDS.A, RDS.B), Marathon Oil (NYSE:MRO), Total (NYSE:TOT), Statoil (NYSE:STO) and Cnooc (NYSE:CEO) have invested in Alberta megaprojects to tap the world's third largest oil reserves, smaller only than Saudi Arabia and Venezuela.
Fri, Jan. 22, 9:21 AM
Thu, Jan. 21, 3:49 PM
- Crude oil futures settled more than 4% higher on the back of perceived oversold conditions, despite a higher than expected inventory build; March WTI jumped 4.2% to settle at $29.53/bbl after trading as high as $30.25, while Brent surged 4.9% to $29.25.
- Crude prices were supported by the inventory increase in this morning's EIA report, which was less than the API’s report released on Wednesday, says Phil Flynn, senior market analyst at Price Futures Group; also, reports of Libyan oil tanks on fire eased speculation that Libya would be exporting more oil soon.
- Also supportive for prices, oil production in the lower 48 states edged lower for the first time in seven weeks, “which is at least ‘less bearish’ for the extremely oversupplied global oil market,” says Tyler Richey of The 7:00’s Report.
- The energy sector is bouncing after hitting a multiyear low yesterday: XOM +1.4%, CVX +2.7%, RDS.A +3.8%, BP +3.7%, TOT +2.3%, STO +4.5%, COP +6.2%, MRO +12.2%, APC +10.3%, OXY +2.1%, EOG +6.4%, PXD +2.7%, APA +8.2%, HES +7%, KMI +15.5%, EPD +3.3%, ETP +6.8%.
- ETFs: UNG, USO, OIL, XLE, UGAZ, UCO, DGAZ, UWTI, VDE, ERX, OIH, SCO, XOP, BNO, BOIL, GAZ, DBO, DWTI, ERY, FCG, DIG, GASL, DTO, DUG, KOLD, BGR, USL, XES, IYE, IEO, UNL, IEZ, DNO, FENY, PXE, PXI, FIF, PXJ, OLO, SZO, NDP, RYE, DCNG, FXN, OLEM, DDG
Wed, Jan. 20, 6:38 PM
- ConocoPhillips (NYSE:COP), ExxonMobil (NYSE:XOM), Marathon Oil (NYSE:MRO) and Occidental Petroleum (NYSE:OXY) are retained with Outperform ratings at Wells Fargo, which says the average upside potential for the four in its international E&P and integrated oil group is 38% at the top end of its valuation range and 25% at the lower end.
- From both a debt-adjusted cash flow and enterprise value/EBITDA standpoint, MRO and Market Perform-rated Chevron (NYSE:CVX) and Murphy Oil (NYSE:MUR) carry the most discounted valuations, the firm says.
- Among oil services stocks, the firm likes Halliburton (NYSE:HAL), RPC (NYSE:RES), Patterson-UTI Energy (NASDAQ:PTEN), U.S. Silica (NYSE:SLCA) and Nabors Industries (NYSE:NBR) to survive the downturn while maintaining the financial flexibility to thrive and take share in a North American recovery.
- Earlier: Wells Fargo's MLPs most likely to cut distributions: ETE, ETP, WMB, WPZ, AMID, APLP, CCLP, CEQP (Jan. 15)
Sat, Jan. 16, 9:15 AM
- Oppenheimer's Fadel Gheit and Luis Amadeo offer a bleak view of the Q4 2015 earnings season for oil and gas producers, warning of sharply lower earnings with deeper losses and wider cash flow deficits Y/Y and Q/Q.
- Among the integrated oil majors, the analysts see overall Q4 earnings falling by more than 50% Y/Y and more than 30% Q/Q; they expect Chevron (NYSE:CVX) to show the steepest earnings decline of 60%-plus Y/Y and 50%-plus Q/Q, while anticipating Exxon Mobil (NYSE:XOM) to report the lowest declines of 40%-plus Y/Y and 25%-plus Q/Q.
- Of the 15 large E&Ps Oppenheimer covers, 13 likely will report losses in Q4 vs. 10 in Q3 and none in Q4 2014, with only Devon Energy (NYSE:DVN) and Range Resources (NYSE:RRC) reporting a profit; the analysts expect most of the other 13 to report steeper declines, including Anadarko Petroleum (NYSE:APC), Apache (NYSE:APA), Chesapeake Energy (NYSE:CHK), EOG Resources (NYSE:EOG), Hess (NYSE:HES), Marathon Oil (NYSE:MRO), Murphy Oil (NYSE:MUR), Pioneer Natural Resources (NYSE:PXD) and Southwestern Energy (NYSE:SWN).
- Earlier this week, Gheit predicted that half of U.S. shale oil producers could go bankrupt before the crude market reaches equilibrium.
Marathon Oil Corp. engages in the exploration, production, and market of liquid hydrocarbons and natural gas. It operates through the following segments: North America E&P, International E&P, and Oil Sands Mining. The North America E&P segment engages in the oil and gas exploration, development... More
Sector: Basic Materials
Industry: Oil & Gas Drilling & Exploration
Country: United States
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