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
Fri, Jul. 8, 2:57 PM
- Marathon Oil (MRO +1.7%) is maintained with a Sector Perform rating at RBC Capital but with a $16 price target, raised from $14, saying after a meeting with the CFO that it likes the company's apparent commitment to capital discipline.
- RBC sees the investment case improving with a solid balance sheet and a “strong set” of liquid focused assets, including the STACK-SCOOP play, where MRO plans to operate at least four rigs; at $55-$60/bbl, the firm sees MRO adding rigs to Oklahoma and maintaining at least five rigs in the Eagle Ford.
- The firm also highlights MRO's spending plans for next year, the recent PayRock acquisition and ongoing portfolio optimization.
Mon, Jun. 20, 2:25 PM
- Marathon Oil (MRO +10.4%) powers higher after snapping up P-E-backed PayRock Energy for $888M, increasing its footprint in Oklahoma's prolific STACK oil play.
- MRO expects internal rates of return for the new addition of 60%-80% before taxes at a WTI price of $50/bbl.
- CEO Lee Tillman says MRO would ratchet up drilling activity if crude prices held above $50/bbl for a while, and that the Oklahoma oil region is profitable enough that it can compete for capital against the company’s other oil plays.
- SunTrust analysts consider ~60% of Payrock’s position to be in the core STACK, and estimates the core acreage value at ~$15K/acre, which appears in line with recent transactions.
- The firm also thinks MRO's move is good news for core STACK players Newfield Exploration (NFX +0.5%), Cimarex Energy (XEC +1.3%), Continental Resources (CLR +1.2%), Devon Energy (DVN +4.6%) and Chesapeake Energy (CHK +3.3%).
Mon, Jun. 20, 2:02 PM
Tue, Jun. 7, 12:25 PM
- Marathon Oil (MRO +3.7%) is initiated with a Buy rating and $21 price target at KLR Group, which cites strong growth drivers include developments in Eagle Ford, Anadarko Basin and Williston Basin.
- KLR calculates that Eagle Ford comprises ~31% of MRO's production and 40%-45% of the company's capex, and MRO plans to drill 140-150 wells within 2016 with all wells utilizing tighter frack stage spacing.
- The Anadarko Basin SCOOP/STACK comprises 7% of production and 15% of capex for MRO, which plans to bring 80-90 basin wells online in 2016.
- The Williston Basin comprises 15% of production and 10%-15% of capex, and MRO plans to bring 75–85 Bakken/TFS wells online.
Tue, May 31, 9:53 AM
- Marathon Oil (MRO +4.6%) is upgraded to Overweight from Neutral with a $16 price target, raised from $14, at Piper Jaffray, which says the company's story has improved with the equity offering and non-core asset sales.
- Jaffray cites MRO's improved financial resilience, meaningful operational leverage to ongoing oil price appreciation, a well rounded U.S. unconventional portfolio with exposure to the emerging SCOOP and STACK plays, and reasonable relative valuation.
- The firm says Suncor Energy remains its top pick among major oil companies, with 40% upside potential to its $40 price target.
Fri, May 27, 11:14 AM
- Midwest and Rocky Mountain pipeline operators have lowered the cost of transporting oil after Alberta’s wildfires decreased demand for pipeline capacity and left transporters competing over a dwindling supply, Bloomberg reports.
- This week, several companies reportedly moved to lower tariffs for selected routes in those regions, including Tallgrass Energy Partners (TEP -3.5%), Legacy Reserves (LGCY -2.6%), Suncor Energy (SU -0.2%) and Marathon Oil-owned (MRO -2.5%) Red Butte Pipe Line, starting July 1; TEP reduced rates by ~2% on its Pony Express line heading into Ponca City, Okla., while SU cut the same amount on its system in Wyoming.
- Pipeline rates also have fallen due to a decline in last year’s producer price index, which the FERC takes into account when reviewing transportation costs.
Tue, Apr. 12, 2:47 PM
- Marathon Oil (MRO +12.7%) surges more than 12% after securing agreements to sell $950M of assets, which the company said places it ahead of its revised target for non-core asset sales of $750M-$1B with ~$1.3B in sale agreements since last year.
- MRO has now "de-risked the story through at least 2017, positioning itself well into a potential turn in the commodity down the road," says Deutsche Bank, which rates the stock as a Buy.
- The firm adds that, while MRO's price for its Shenandoah stake probably is a negative for its partners, "the favorable price tag on the Wyoming side... is a major positive takeaway."
- Now read Deutsche Bank oil stocks with lots of remaining upside: MRO, DVN, PXD, COP
Wed, Mar. 30, 3:30 PM
- Analysts at Seaport Global upgrade seven oil and gas producers, advocating for increased exposure to select names they say should protect investors in the event of a move back toward $50/bbl, while downgrading 11 others.
- Seaport upgrades seven companies to Buy: Continental Resources (CLR +3.4%), Callon Petroleum (CPE +1.4%), Marathon Oil (MRO +1.9%), Oasis Petroleum (OAS +2.8%), Rice Energy (RICE +1.7%), Petroquest Energy (PQ +9.1%) and Lonestar Resources (OTCQX:LNREF +6.6%).
- Downgraded to Sell are Whiting Petroleum (WLL +4.1%), Southwestern Energy (SWN -2.5%), WPX Energy (WPX +0.6%), Laredo Petroleum (LPI -1.1%), Jones Energy (JONE +0.9%), Northern Oil & Gas (NOG +1%), Carrizo Oil & Gas (CRZO +1.6%), Memorial Resource (MRD +2.5%), Matador Resources (MTDR -0.3%), Sanchez Energy (SN +1.6%) and PDC Energy (PDCE -0.9%).
- The firm also favors gaining leverage to the Oklahoma STACK play, thus CLR and Newfield Exploration (NFX +1.9%) have "taken the pole position away" from Permian producers Parsley Energy (PE +1.3%) and Pioneer Natural Resources (PXD +1%).
Tue, Mar. 1, 9:51 AM
- Marathon Oil (MRO -6.3%) opens sharply lower after upsizing its public offering to 145M common shares and pricing it at $7.65/share; MRO's original offering had totaled 135M shares.
- MRO says it intends to use the proceeds to strengthen its balance sheet and fund part of its capital program.
- While the offering represents a 20% dilution to MRO shareholders, it is a far better choice than adding to its $7.3B long-term debt load, according to TheStreet.com's Jim Collins.
- Energy companies have issued nearly $11B in equity YTD, with MRO just the latest to issue equity within the past two weeks following Devon Energy (DVN -3.6%), Enbridge (ENB -1%) and Newfield Exploration (NFX -0.9%).
Tue, Mar. 1, 9:19 AM
Mon, Feb. 29, 4:53 PM
- Marathon Oil (NYSE:MRO) -4.3% AH after announcing a public offering of 135M common shares, with an underwriters option to purchase up to an additional 20.25M shares.
- MRO says it plans to use the proceeds to strengthen its balance sheet and for general corporate purposes, including funding part of its capital program.
Fri, Feb. 26, 1:10 PM
- Chevron's (CVX -0.1%) Aa1 credit rating is placed on review for a downgrade at Moody's, which predicts negative free cash flow this year and next, and possibly even into 2018.
- Moody’s expects CVX's negative free cash flow exceeding $15B in 2016, despite the company's planned 25% capex cut, after recording negative free cash flow of ~$16B in 2015.
- Newly downgraded at Moody's: Occidental Petroleum (OXY +1.2%) to A3, EOG Resources (EOG -2.3%) to Baa1, ConocoPhillips (COP +4.5%) to Baa2, Apache (APA +5.1%) to Baa3, Marathon Oil (MRO +5.5%) to Ba1, Devon Energy (DVN +4.6%) to Ba2 and EnLink Midstream Partners (ENLK +4.9%) to Ba2.
- Earlier: Exxon's AAA rating affirmed by Moody's but outlook turns negative (Feb. 25)
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%.
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.
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.
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
Other News & PR