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
The SCOOP On Marathon's Massive Oklahoma Resource Upgrade
Michael Fitzsimmons • 18 Comments
Michael Fitzsimmons • 18 Comments
Nov. 9, 2015, 11:34 AM
- Marathon Oil (MRO -0.9%) agrees to sell a major chunk of its Gulf of Mexico assets in a deal worth $205M with an undisclosed buyer.
- MRO will hold on to its minority stakes in two Gulf projects, the Gunflint project expected to start pulling up its first barrels of oil next year and Anadarko Petroleum’s deepwater Shenandoah discovery, but will sell off the aging Gulf fields it operates in the Ewing Bank blocks where oil companies began drilling more than 20 years ago.
- In a display of the depressed oil markets, Simmons analysts say MRO’s ~$14K/boe sale price for its Gulf assets was well below the ~$55K/boe average value of 35 similar deals over the last five years.
Nov. 6, 2015, 4:59 PM
- Royal Dutch Shell (RDS.A, RDS.B) unveils a $1.3B carbon capture storage project for Alberta, but says future efforts to curb greenhouse gases will continue to need financial support from governments.
- Shell CEO Ben van Beurden says carbon capture and storage projects need a $60-$80 price for carbon dioxide to justify building them, more than 5x the current price of C$15/ton (US$11.27) in Alberta.
- Shell’s Quest facility will extract 1M tons of the gas from its Scotford refinery each year, and the carbon dioxide will be injected into an underground saline formation ~50 miles from the plant - it is the first in North America to store CO2 in a deep saline formation.
- The governments of Alberta and Canada contributed $745M and $120M, respectively, to build the project that counts Shell (60%), Chevron (NYSE:CVX) and Marathon Oil (NYSE:MRO), each with 20%, as investors.
Nov. 6, 2015, 12:42 PM
- Marathon Oil (MRO -4.1%) will cut 200 jobs this month as part of a plan to restructure its upstream business into two distinct units for its key U.S. shale plays and its conventional drilling fields in the Gulf of Mexico and elsewhere, FuelFix reports.
- MRO's Bakken shale, Eagle Ford shale and Oklahoma assets will get the lion’s share of the company’s sharply reduced $2.2B capital budget next year in an attempt to concentrate on profitable and prolific shale fields; MRO is adding muscle to its shale presence at a time when U.S. shale oil production is wavering amid the oil downturn.
- MRO's new conventional business will include assets in the Gulf of Mexico, Equatorial Guinea, Gabon, Kurdistan, Libya and the U.K., as well as its fields in Wyoming and its oil sands mines.
Nov. 5, 2015, 11:38 AM
- Marathon Oil (MRO -3.2%) CEO Lee Tillman says the company plans to sell at least $500M in assets and has sold acreage in eastern Africa as part of an effort to reduce conventional exploration in favor of shale.
- MRO says it will cut capex by at least 29% next year as costs decline and its outlook on oil prices worsens, but Tillman says 75% of its $2.2B budget next year will be spent in the U.S. shale plays, "which offer our highest risk-adjusted returns.”
- The CEO says MRO’s move to cut its dividend to $0.05/share, announced last week, will help the company steer $425M in capital toward highly productive plays.
Nov. 4, 2015, 6:57 PM
- Marathon Oil (NYSE:MRO) -3.3% AH after posting a smaller than expected Q3 loss but reporting a 55% Y/Y decline in revenues and saying it plans to scale back efforts to look for oil and gas in conventional plays.
- CEO Lee Tillman says MRO expects crude prices to remain low for a long time, so the company is cutting its preliminary 2016 investment budget for drilling projects to $2.2B, 29% less than it expects to spend this year.
- Despite the cuts, MRO says it is on track to produce 20% more shale oil and gas than a year ago while spending $200M less, thanks to technological advances that have helped cost efficiency.
- MRO, which is selling exploration land in Ethiopia and Kenya, expects full-year 2015 production to increase 7% Y/Y, at the top end of its previous guidance for a 5%-7% increase.
Nov. 4, 2015, 5:12 PM
- Marathon Oil (NYSE:MRO): Q3 EPS of -$0.20 beats by $0.20.
- Revenue of $1.32B (-55.6% Y/Y) misses by $60M.
- Shares -4.5% AH.
Nov. 3, 2015, 5:35 PM
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Oct. 29, 2015, 11:37 AM
- Marathon Oil (MRO +2%) is higher even as it becomes the first major U.S. shale producer to cut its quarterly dividend, reducing it by 76% in an effort to prop up cash holdings amid weak oil prices.
- MRO says its dividend decision is not an indication of the company's performance, and that it expects Q3 earnings to come in above analysts' expectations.
- MRO also cuts its 2015 capital spending plans by $200M to $3.1B, and forecasts 2016 spending at up to $2.2B.
- The dividend cut is bigger and sooner than expected, Deutsche Bank's Ryan Todd says; analysts had worried that large dividend payouts would contribute to a shortage of cash in 2016 that would impair MRO's ability to take advantage of an eventual market recovery, so he thinks the reduction "largely addresses this risk.”
Oct. 29, 2015, 7:00 AM
- Marathon Oil (NYSE:MRO) declares $0.05/share quarterly dividend, -76.2% decrease from prior dividend of $0.21.
- Forward yield 1.13%
- Payable Dec. 10; for shareholders of record Nov. 18; ex-div Nov. 16.
Oct. 22, 2015, 6:25 PM
- North Dakota regulators approve a plan to give oil producers an extra year to bring a new well online, Reuters reports, in an attempt to give the energy industry breathing room during the oil price downturn.
- Companies will now have up to two years to frack drilled but uncompleted wells under changes approved by the North Dakota Industrial Commission, which means the oil industry will not be forced to spend billions of dollars to frack an estimated 1,000 DUCs, most of which will hit their previous one-year deadlines in December.
- Top Bakken shale producers include CLR, HES, EOG, WLL, XOM, OAS, NOG, EOX, MRO
Oct. 14, 2015, 6:54 PM
- The recent bounce in oil stocks such as Chevron (NYSE:CVX), Occidental Petroleum (NYSE:OXY), Marathon Oil (NYSE:MRO), Devon Energy (NYSE:DVN), Hess (NYSE:HES) and EOG Resources (NYSE:EOG) may not prove sustainable but their dividends are mostly safe, Deutsche Bank analysts say.
- The firm expects stock performance "to remain choppy, with coming negative revisions, challenging valuation and commodity volatility still weighing on the near-term outlook," but with H2 crude balances showing signs of improvement, MRO, HES and EOG could enjoy a ~30% increase in 2016 CFO for each $10/bbl move in crude.
- Deutsche Bank says dividends at MRO may be at risk, but believes the remaining dividends are safe, suggesting current yields of the integrated oils are overly discounted vs. the S&P 500, European oil majors and respective historical averages.
- The firm says it continues to favor OXY and EOG among large-caps, MRO and DVN for leverage to a bounce, and CVX among yield-focused integrateds.
Oct. 9, 2015, 2:26 PM
- The House passes legislation that would lift the 40-year-old ban on oil exports, giving the oil industry one of its top congressional priorities.
- But the real test is in the narrowly divided Senate, where stand-alone export legislation is far less likely to advance; in the 261-159 House vote, only 26 Democrats joined 235 Republicans to support the measure, held down by the Obama administration's opposition.
- More than a dozen oil companies - including Continental Resources (NYSE:CLR), ConocoPhillips (NYSE:COP), Encana (NYSE:ECA), Hess (NYSE:HES), Marathon Oil (NYSE:MRO) and Apache (NYSE:APA) - have been pressing the issue with Congress, arguing that allowing oil exports would eliminate market distortions, create jobs and stimulate more U.S. petroleum production; it also would help companies fetch a higher price on the global oil market.
- "An extra dollar or two for the price of our product today is very important because our margins are incredibly squeezed,” says ECA's Doug Suttles.
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Oct. 7, 2015, 5:37 PM
- Schlumberger (NYSE:SLB) is out and Frank's International (NYSE:FI) is in, praising FI's “self-help improvements with a good underlying business.” as Credit Suisse analysts update their top energy stock picks in 10 different subsectors.
- Credit Suisse names Devon Energy (NYSE:DVN) as its favorite oil and gas E&P stock, which should ultimately outperform despite near-term oil price risk “given its defensive valuation, top quartile oil growth profile, and further accretion potential from EnLink."
- Top independent refiner is Marathon Petroleum (NYSE:MPC), as the firm believes the synergy of the company’s recently-acquired Hess retail business is exceeding plans, and it is confident MPC will continue to benefit from self-help initiatives.
- Among MLPs, Genesis Energy (NYSE:GEL) is defensive in terms of its direct exposure to commodity price weakness and offensive in terms of the distribution growth expected following its recent acquisition of offshore assets from Enterprise Products Partners.
- Other subsector favorites:MRO, PDCE, EURN, SCTY
Sep. 28, 2015, 7:02 PM
- Wolfe Research's Paul Sankey says he is bracing for some ugly Q3 earnings reports among oil and gas producers and a soft environment well into 2016, arguing that with oil prices stuck ~$45/bbl for West Texas crude, "there is real bankruptcy risk for probably one-quarter of the U.S. oil industry.”
- The analyst advises clients to stick with quality companies that can weather a prolonged stretch of soft prices, which means larger independent producers such as EOG Resources (NYSE:EOG), Anadarko Petroleum (NYSE:APC) and Chevron (NYSE:CVX) among the majors.
- Sankey says “all will be fine in due course,” although the next 6-12 months could be “tough sledding” for their businesses.
- Sankey likes a number of refiners, who will benefit from cheap crude oil, including Valero Energy (NYSE:VLO), Marathon Oil (NYSE:MRO), Western Refining (NYSE:WNR) and HollyFrontier (NYSE:HFC).
Sep. 24, 2015, 7:15 PM
- North Dakota regulators approve an industry-backed proposal to delay further cuts to associated gas flaring by 10 months while also easing more long-range flaring reduction targets.
- Gov. Dalrymple and the two other members of the North Dakota Industrial Commission voted to change the date when companies must capture 85% of natural gas produced from their wells to Nov. 1, 2016.
- The regulators agreed with industry arguments that the delays and revisions were needed because of the lack of new gas capture and pipeline infrastructure, which have been delayed for a variety of reasons, including low oil and gas prices, right-of-way disputes and pad size limitations.
- Top North Dakota producers include CLR, HES, EOG, WLL, XOM, OAS, NOG, EOX, MRO
Sep. 22, 2015, 5:45 PM
- With the outlook for oil prices uncertain, Deutsche Bank's energy analyst team prefers four stocks - Occidental Petroleum (NYSE:OXY), EOG Resources (NYSE:EOG), Devon Energy (NYSE:DVN) and Marathon Oil (NYSE:MRO) - which have “high asset quality, manageable outspend and a visible line of sight towards improving capital efficiency."
- Consensus estimates imply a modest drop in U.S. exit rate oil production in 2016, but increased drilling efficiencies, an accelerated draw-down in capital efficient DUC well inventory, and an increasingly oil-weighted allocation of onshore capital suggest the group may be able to "keep on keeping on," the firm says.
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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