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- Marathon recently announced that it added another 520 million BOE to its 2P reserve base.
- The Oklahoma Resource Basins added 310 million BOE to Marathon's growth runway, and exploration efforts could uncover another 490 million BOE.
- Extended laterals and successful wells targeting the Springer shales are an instrumental part of Marathon's plan to reward shareholders.
- Continental Resources has discovered 127 million BOE in the Springer shales so far on 46,000 net acres, with 72,000 net acres yet to be explored.
- The industry's success in the Springer formation points towards plenty of upside for Marathon.
The SCOOP On Marathon's Massive Oklahoma Resource Upgrade
- Marathon Oil recently increased its 2P reserves in Oklahoma by a whopping 310 million boe.
- 2P reserves in Oklahoma are now 1 billion+ boe.
- Oklahoma is strong catalyst going forward - joining the Eagle Ford & Bakken.
- Marathon appears to be on track to become very "EOG like" over the next year or two.
- As a result, MRO could gain 50% over the next 18-24 months. It is a STRONG BUY.
Is Marathon Well Positioned To Expand Its Bottom Line?
- The industry prospects for Marathon Oil are highly favorable as the demand for liquid hydrocarbons is surging and the prices of hydrocarbons and natural gas are expected to rise.
- Marathon’s total production level is projected to grow at a CAGR of 8% to 10% up until 2017 enabling the company to meet the increasing global demand for liquid hydrocarbons.
- These factors would allow the top and bottom lines to display noticeable growth.
- The reduction in development costs would add further growth and enhance the company’s net earnings and operating cash flows.
Downspacing Allows Marathon Oil To Pump Out More Crude, A Win For Investors
- Marathon is boosting its reserve base by targeting different horizons in the Eagle Ford and Bakken/Three-Forks plays.
- Downspacing efforts in the Eagle Ford are pushing wells closer together, boosting Marathon's drilling inventory.
- There is room for upside in its 40-acre Eagle Ford downspacing program through higher recovery rates.
- Downspacing is working well in the Bakken/Three-Forks, and Marathon is pushing its efforts even further.
- Kodiak Oil & Gas has gotten a pretty good idea of how much value downspacing creates.
Ask The Austin Chalk Or Three-Forks, Marathon Oil's Shale Growth Story Is Only Just BeginningCallum Turcan • Wed, Aug. 6
- Marathon is focused on three high growth shale plays, the Eagle Ford, the Bakken/Three-Forks, and the Oklahoma Resources Basin.
- Three wells came online this quarter targeting the Austin Chalk, with very strong production results.
- The Austin Chalk could be the next big thing in the Eagle Ford as Marathon delineates part of its acreage.
- Targeting the second bench of the Three-Forks and then the third could push Marathon's reserve base in the Bakken up to 1 billion BOE and beyond.
- Better drilling techniques will make the Bakken/Three-Forks produce even higher returns.
Marathon Oil: Staying Bullish As The Company Hikes Its Dividend
- On Wednesday, July 30, MRO announced it would be increasing its quarterly dividend by 11.1%.
- MRO's upcoming earnings could exceed Street estimates if the company can demonstrate increases in both its cash flow from operations and its net income.
- Trend behavior could improve during the second half of the year, especially if MRO can meet and/or exceed analysts' earnings expectations for the upcoming quarter.
- With the sale of its Norwegian assets, Marathon Oil will be spending a majority of its time and resources on its most lucrative assets.
- The company expects to invest approximately $3.6 billion of its $5.9 billion capital budget on its U.S. resources.
- The higher capital expenditure will result in an increase in Marathon's production by 20% in the coming years.
- The Bakken region is expected to deliver 15-20 years of inventory at its current rig levels. Marathon increased its rig activity in the Bakken region by 20 percent.
- The company is making an effort to restructure its portfolio by selling high political-risk assets abroad and concentrating more on its North American properties.
Marathon Oil: Focusing More On Unconventional Plays
- To streamline its portfolio of assets, Marathon Oil is divesting its overseas activities and is focusing more on domestic activities.
- The Oklahoma resource play is one of the promising unconventional plays, which will provide an upside to the company's total production.
- The longer lateral wells in the company's SCOOP formation and lower initial decline rate will help the company to sustain its long-term production performance.
- The addition of working interest in the Rift basin could be beneficial for strengthening its financial performance.
Marathon Oil - Attractive On Dips Despite 'Rushed' Norwegian Asset Sale
- Marathon completes another divestment, selling its Norwegian assets.
- The deal tag is a bit disappointing; investors act reserved.
- However, I remain a buyer on dips, as management is committed to creating shareholder value.
- Marathon Oil has produced strong performance for investors since it conducted the spin-off of MPC in 2011.
- However, past performance is not a predictor of the future, so understanding the valuation currently embedded in the stock is of paramount importance for investors.
- Marathon Oil appears to be attractively priced based on relative and intrinsic valuation analyses.
Marathon Oil - Strong Domestic Unconventional Growth And Increased Shareholder Focus Drives ValueThe Value Investor • Mon, May. 12
- Marathon Oil is showing impressive growth in its US unconventional plays.
- North Sea divestment proceeds to be used to repurchase share.
- Growth story with focus on shareholder value should bode well for long term shareholders.
- Marathon announced it would begin accepting bids for divestment of its North Sea business during 2Q of 2014.The proceeds will most likely be utilized in share repurchases.
- The company increased its rig activity in all of the major resource plays (Eagle Ford, Bakken and Woodford) by allocating prioritized capital budget.
- The increased activity will result in resource play production growth of 30% during 2014 while for the long term production is expected to grow at a CAGR of 25%.
- Argus reiterated a price target of $42 for Marathon reflecting an upside potential of 22 percent from the current price target of 34.47.
Eagle Ford Shale: Economic Side Effects Of Downspacing
Yesterday, 5:35 PM
- Marathon Oil (NYSE:MRO) says it expects a 2015 capital spending budget of $4.3B-$4.5B, or ~20% below 2014 levels, adding that it needs extra time to finalize the budget given continuing changes in oil prices and the expected impact on oilfield service costs.
- MRO says the capital program will reflect a significant weighting to its high return investment opportunities in its U.S. resource plays and lower exploration spending, with total 2015 production growth (excluding Libya) anticipated in the high single digits.
Tue, Dec. 9, 6:20 PM
- North Dakota issues strict new oil standards that will require energy companies operating in the state to strip explosive gases from crude oil that shows a high vapor pressure reading, in an effort to make crude-by-rail transport safer.
- Under the new mandate, North Dakota oil can’t be transported unless it has a vapor pressure reading of 13.7 lbs./sq. in. or lower.
- The rule, which will take effect on April 1, 2015, is the first major move by regulators to address the role of gaseous, volatile crude oil in railroad accidents which have been linked to several fiery explosions, including one last year in Quebec that killed 47 people.
- Top Bakken producers: CLR, EOG, KOG, WLL, HES, XOM, OAS, NOG, EOX, MRO.
Fri, Dec. 5, 5:38 PM
- The Eagle Ford shale formation in south Texas produced its billionth barrel of oil some time last month, according to analysts at research firm Wood Mackenzie.
- Eagle Ford now accounts for 16% of total U.S. oil production, and the firm forecasts E&P spending of $30.8B in the region next year, ~22% of the total $139.3B expected in U.S. onshore spending.
- Eagle Ford is widely considered the most profitable U.S. shale field, and many analysts speculate the break-even price for production to remain profitable is ~$50/bbl in much of the play.
- Top Eagle Ford producers include EOG, CHK, APC, MRO, BHP, APC, APA, BP, COG, CRZO, CWEI, CRK, COP, XOM, FST, GDP, HES, MTDR, MUR, NFX, PVA, PXD, ROSE, RDS.A, RDS.B, SN, SM, STO, SFY, TLM, ZAZA
Tue, Dec. 2, 3:13 PM
- Apache (APA -1%), Bill Barrett (BBG -5.6%) and Laredo Petroleum (LPI -4.9%) are downgraded to Neutral from Buy at Mizuho, as the firm lowers its crude oil price deck and views OPEC's decision not to cut production as a structural shift in crude oil markets.
- Although the current excess supply/weak demand situation will be resolved gradually, market fundamentals will increasingly drive crude prices in a ~$70/bbl world, the firm says; in the E&P space, it prefers APC, MRO, FANG, RSPP and RICE.
Tue, Dec. 2, 2:48 PM
- Energy stocks (XLE +1.4%) are posting the day's largest gains among S&P sectors, rebounding from recent losses even as Nymex crude oil fell another $2.05 to $66.97/bbl.
- Refiners Marathon Petroleum (MPC +4%) and Valero (VLO +4.1%) and pipeline operator Williams Cos. (WMB +1.5%) are among the top gainers, while losers include most oil services companies such as Halliburton (HAL -2.2%) and rig operator Transocean (RIG -3.7%).
- Anadarko Petroleum (APC +1.6%), Cimarex Energy (XEC +1%), Devon Energy (DVN +0.7%), EOG Resources (EOG +3.8%) and Marathon Oil (MRO +3.5%) were selected top “safe haven” picks for analysts at Tudor Pickering Holt, which said they are “liquid names with high-quality assets and healthy balance sheets."
Mon, Dec. 1, 11:58 AM
- Marathon Oil (MRO -1.7%) says it discovered significant amounts of oil and natural gas in the Kurdistan region of Iraq.
- A drillstem testing program at the Jisik-1 exploration well yielded a sustained flow rate of 6,100 bbl/day of oil, and multiple non-associated gas zones flowed at a combined rate of 10M-15M cf/day.
- MRO is operator of the Harir block with a 45% stake, while Total (TOT +0.4%) owns 35% and the Kurdistan Regional Government holds 20%.
Mon, Nov. 17, 3:59 PM
- In the wake of Halliburton's (NYSE:HAL) $34.6B offer for Baker Hughes (NYSE:BHI), it appears the next hot sector for M&A action is energy: More consolidation is likely, given the weakness for stocks in the oilfield services subsector, low interest rates, and as a drop in demand for oil increases cutthroat pricing competition.
- Speculation is running rampant as investors try to figure out who is next in an industry that is sure to undergo some more consolidation; some names identified as possible candidates include Kodiak Oil and Gas (NYSE:KOG), Marathon Oil (NYSE:MRO), Northern Oil and Gas (NYSEMKT:NOG), Anadarko Petroleum (NYSE:APC), Pioneer Natural Resources (NYSE:PXD).
- GE could go after National Oilwell Varco (NYSE:NOV) to show it is serious about the energy industry after last year’s purchase of pumpmaker Lufkin, Royal Bank of Canada says, and Oppenheimer says even BP could be an acquisition candidate.
- But Morgan Stanley does not see offshore drillers getting in on the action, as larger players like Diamond Offshore (NYSE:DO), Transocean (NYSE:RIG) and Seadrill (NYSE:SDRL) are still addressing dividend concerns while smaller companies such as Atwood Oceanics (NYSE:ATW) and Pacific Drilling (NYSE:PACD) still trade close to replacement value.
Thu, Nov. 13, 7:23 PM
- North Dakota regulators today proposed standards for requiring energy companies to treat the crude they pump from the Bakken Shale to make it less volatile before shipment by pipeline or train.
- "Our crude oil leaving North Dakota will behave like the gasoline you put in your car," says the head of the state's Department of Mineral Resources, which came up with the recommendations.
- The new rules would require every barrel of oil produced in the state to undergo some kind of treatment, with the goal that all oil-producing Bakken Shale wells ship crude with a vapor pressure below 13.7 psi, similar to 13.5 psi for most automobile gasoline.
- Top Bakken producers: CLR, EOG, KOG, WLL, HES, XOM, OAS, NOG, EOX, MRO.
Thu, Nov. 13, 11:59 AM
- Regulators set to decide on rules for shipping crude oil via railroad are relying on testing methods that may understate the explosive risk of North Dakota crude, according to a WSJ report citing industry and Canadian officials.
- The testing controversy centers on how to determine vapor pressure, a measure of how quickly a liquid fuel evaporates and emits gases; the industry has long relied on a decades-old methodology that does not require sealed or pressurized containers to collect or test crude samples.
- The North Dakota Industrial Commission is set to rule on what steps, if any, producers must take to strip volatile gases out of crude oil before loading it into railroad tank cars.
- Top Bakken producers include CLR, EOG, KOG, WLL, HES, XOM, OAS, NOG, EOX, MRO.
Mon, Nov. 3, 6:36 PM
- Marathon Oil (NYSE:MRO) +1.7% AH despite reporting Q3 earnings that came in short of analyst expectations and revenues that fell 5% Y/Y.
- Total company sales volume from continuing operations excluding Libya averaged 411K boe/day, up more than 7% from a year ago.
- MRO says income from its Q3 E&P business rose 20% Y/Y to $292M on higher sales; exploration expenses fell 34%.
- Says its high-quality resource plays in the Bakken, Eagle Ford and Oklahoma resource basins averaged net production of 192K boe/day, up 43%.
- Despite lower oil prices, Mro says it plans to grow production in Q4; last month, MRO finalized the $2.1B sale of its Norway business and plans to reinvest the cash into expanding in U.S. shale plays.
Mon, Nov. 3, 5:05 PM
Sun, Nov. 2, 5:35 PM
- ACXM, AEIS, AGU, AIG, AMTG, ANV, APL, BDE, BKH, CHGG, CKP, CRK, CUTR, CVD, CXW, CYH, DXPE, EGAN, ELNK, ENH, EOX, EPAM, EQC, FN, FTR, GALE, GRT, GTY, HLF, IART, ININ, KAMN, KBR, LCI, MCEP, MDU, MR, MRO, NBIX, NLS, NOR, NTRI, OGS, OTTR, PKT, PL, PLOW, PQ, QLYS, RBC, REG, RKT, RKUS, RLD, RTEC, SALE, SBRA, SGY, SKH, SNHY, SRC, SSW, SUP, TDW, THC, TXRH, VNO, VNR, WTR, Y
Wed, Oct. 29, 5:53 PM
Wed, Oct. 15, 10:19 AM
- Ethiopia will grant Tullow Oil (OTCPK:TUWLF, OTCPK:TUWOY) an extension to its exploration license after the company reported “encouraging” results in its search so far, the country's mining minister says.
- Tullow had requested more time to analyze data from drilling and seismic surveys in southern Ethiopia after two out of four wells it drilled in the past two years, along with partners Marathon Oil (NYSE:MRO) and Africa Oil (OTCPK:AOIFF), show they may contain petroleum deposits.
- No oil or gas is currently produced by Ethiopia.
Mon, Oct. 13, 5:57 PM
- Bakken shale oil producers are under pressure to scale back their 2015 drilling plans after Bakken oil fell below $80/bbl for the first time in nearly a year, as worldwide crude prices decline amid ample North American supplies and Persian Gulf producers signaling they’re prepared to keep output high to protect their market shares in Asia.
- The "body language" among producers is that capex next year will be flat or only slightly higher, vs. earlier expectations for 5%-10% increases, says Topeka Capital's Gabriele Sorbara, who adds Bakken drillers need prices of $70-$80/bbl to earn a typical 15%-25% return.
- Bakken wells produced a record 1.047M barrels of crude in July, accounting for 12% of total U.S. output: CLR, EOG, KOG, WLL, HES, XOM, OAS, NOG, EOX, MRO.
Thu, Oct. 9, 3:25 PM
- Crushed by relentless anxiety about oversupply and weakening global demand, Nymex crude oil futures closed down $1.54 at $85.76/bbl, their lowest close since Dec. 2012, while Brent crude fell below $90/bbl for the first time in more than two years.
- Including today's losses, WTI crude is down 6.2% since the start of the month and Brent has surrendered ~5%.
- In the face of surging output, a move in WTI below its 10-year average at $82 is not out of the realm of possibility, Brown Brothers Harriman says, adding that "a break of $73/barrel could send WTI toward $64, which corresponds with the 2010 low."
- Among big oil names so far today: APC -6.3%, LINE -4.6%, EPD -3.8%, DVN -3.8%, MRO -3.6%, HES -3.8%, KMI -3.7%, TOT -3.5%, STO -3.3%, RDS.A -3.1%, OXY -3%, KMP -3%, XOM -2.6%, COP -2.6%, MUR -2.6%, CVX -2.5%, BP -2.4%.
- ETFs: USO, XLE, OIL, UCO, ERX, VDE, OIH, SCO, ERY, XOP, DIG, BNO, DTO, DBO, DUG, IYE, XES, IEO, CRUD, IEZ, PXE, USL, UWTI, PXJ, FENY, DNO, DWTI, RYE, FXN, SZO, OLO, DDG, OLEM, TWTI
MRO vs. ETF Alternatives
Marathon Oil Corp is an energy company engaged in the exploration, production and marketing of liquid hydrocarbons and natural gas, production and marketing of products manufactured from natural gas and oil sands mining.
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