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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
Fri, May. 23, 12:26 PM
- The revelation that California's Monterey Shale deposit will yield only 4% of what was originally hoped was not a big surprise to those in the know, who say the downgrade does little to alter the near-term trajectory of the energy renaissance.
- Monterey's terrain, as well as California's strict environmental regulation, always meant full scale drilling would be difficult; Chevron (CVX) bemoaned the lack of profit derived from its Monterey operations at a 2013 shareholders meeting, and Venoco - once one of the biggest drillers in the formation - exited most of its Monterey acreage years ago in order to reduce debt and go private.
- The Monterey news does spotlight an element of the shale boom that often goes unremarked by fracking advocates: Shale wells are prone to rapid depletion rates, as spots in North Dakota's Bakken lose 85% of their capacity within a few years.
- Among Bakken producers: CLR, EOG, KOG, WLL, HES, OAS, NOG, EOX, MRO.
Fri, May. 23, 11:59 AM
- Spanish media says domestic oil company Repsol (REPYY, REPYF) is poised to make a bid of €2B ($2.7B) for Marathon Oil's (MRO) assets off Norway in a move to optimize its own portfolio.
- Sweden's Lundin (LNDNF, LNDNY) is among a lineup of 10 bidders angling for the MRO's portfolio, with possible participation by Asian players, according to the head of Oslo-based research firm Rystad Energy.
- Analysts say MRO could announce a deal for the assets as soon as mid-June after bids were submitted earlier this month.
Thu, May. 22, 8:59 AM
- Total (TOT) and Repsol (REPYY, REPYF) are the latest western oil companies to pull out some expatriate employees from Libya amid escalating violence there, posing the latest challenge to the Libyan oil industry's fragile recovery.
- Strikes and armed occupation of oil terminals already have reduced the Libya's oil output to less than 20% of its normal level of ~1.5M bbl/day.
- Among other oil majors with a Libyan presence are Statoil (STO), ConocoPhillips (COP), Marathon Oil (MRO), Hess (HES), Eni (E) and Occidental Petroleum (APC).
Tue, May. 20, 6:58 PM
- Bakken crude oil is similar to other North American light, sweet grades and does not pose a greater rail transportation risk than other transportation fuels, according to a report compiled for a North Dakota energy producers lobby group.
- The study shows Bakken crude is more volatile than heavier oils such as from Canada’s tar sands, but is similar to light crudes produced elsewhere in the U.S., with characteristics that fall well within the margin of safety for the current tank car fleet.
- The oil producers' study follows a report with similar results issued last week by a refining industry group.
- Among Bakken producers: CLR, EOG, WLL, HES, KOG, OAS, NOG, EOX, MRO.
Mon, May. 19, 7:58 AM
- Brent crude rises above $110/bbl on renewed concerns over Libya's oil output following some of the worst violence in Tripoli since Gaddafi's ouster in 2011.
- Gunmen stormed Libya's parliament yesterday and demanded its suspension, claiming loyalty to a renegade army general.
- An end to a month-long blockade of major oil ports in eastern Libya last month raised the prospect of higher crude exports, but just-opened oil fields have been closed again as clashes erupt.
- Also helping push crude prices are potential Norwegian strikes and the shutdown of BP's Foinaven field for maintenance.
- Energy companies with a significant presence in Libya include Total (TOT), Statoli (STO), ConocoPhillips (COP), Marathon Oil (MRO), Hess (HES) and Occidental Petroleum (OXY).
- ETFs: USO, OIL, UCO, SCO, DTO, BNO, DBO, CRUD, USL, UWTI, DNO, DWTI, SZO, OLO, OLEM, TWTI
Fri, May. 16, 12:39 PM
- Data released by a lobbying group for oil refiners confirms that crude from North Dakota is very volatile and contains high levels of combustible gases, but the group says the crude is no more dangerous to ship than oil from other shale regions and new rules on safety standards are not needed.
- Oil and refining companies say it's mostly the railroads that are at fault: a probe into the derailment and explosion of a train in Lac-Megantic last year found that brakes weren’t applied correctly; a train that exploded in North Dakota in December crashed into a train that had derailed across the tracks; and the April explosion of a train carrying Bakken crude through Lynchburg, Va., may have been caused because sections of the track bed had been washed away by heavy rains.
- Among Bakken producers: CLR, EOG, WLL, HES, KOG, OAS, NOG, EOX, MRO.
Mon, May. 12, 10:58 AM
- Marathon Oil (MRO +1.1%) reportedly plans to decide within this year whether to develop a pair of discoveries in the vicinity of its Alvheim oil field off Norway.
- Development of the two discoveries likely would require total investments of 2B-3B Norwegian kroner ($338M-$507M).
- MRO is looking to boost the resource base for the Alvheim field and plans to start drilling three more development wells later this year to lift the recovery rate.
Tue, May. 6, 5:59 PM
- Marathon Oil (MRO) +1.8% AH after Q1 earnings more than tripled despite a drop in revenue, as domestic production continues to grow and exploration costs fell 84%.
- North American shale production jumped 10% Y/Y, but overseas production fell 14% due to a strike in Libya and aging fields in Norway and the U.K.; says the sale of its North Sea assets is on schedule and that bids are due this quarter.
- Q1 revenue fell 12% to $3.53B, sales volume slipped 11% to $463M, while net production available for sales dropped 13% to $448M.
- Operating margin narrowed to 33.5% from 35.8%, while provisions for income taxes fell 40% to $590M.
Tue, May. 6, 4:51 PM
Wed, Apr. 30, 3:04 PM
Fri, Apr. 25, 4:56 PM
- New Concept Energy (GBR) surged 30% today, reaching a two-year high, on market speculation that a larger rival may be interested in buying some of its natural gas properties in the Utica shale formation in West Virginia.
- GBR shares raced as high as $3.28 before closing at $2.40, as online chat boards suggested the likely suitors could be either Chevron (CVX) or Marathon Oil (MRO).
- Volume reached 2.57M shares, or ~107x the daily average of 24,052 shares over the past three months; GBR issued a statement that the company's policy is not to comment on unusual market activity.
Wed, Apr. 23, 12:57 PM
- North Dakota's industrial commission is considering a proposal that would cut back on the state’s booming oil production as a means of controlling the amount of natural gas that’s being burned off at well sites.
- North Dakota drillers currently flare more than a third of the gas because development of pipelines and processing facilities to capture it hasn’t kept pace with oil drilling.
- "If production curtailment is the chosen regulatory path, then wells will be shut in or not even drilled,” says Roger Kelley, director of regulatory affairs for Continental Resources (CLR), one of the biggest players in the state.
- Other top North Dakota producers include EOG, WLL, HES, KOG, OAS, NOG, EOX, MRO.
Mon, Apr. 21, 5:45 PM
Wed, Apr. 16, 12:14 PM
- Another potential problem related to fracking has been discovered in North Dakota, where piles of garbage bags have been found in two places recently filled with “oil socks” used to capture silt found in the waste water from fracking, but which also contain radioactive waste.
- North Dakota wells may produce 27 tons/day of the filter socks, and the state has no storage facility capable of handling radioactive waste - with 500-600 injection wells now producing the socks.
- Though the radiation levels are mild, the discoveries provide further evidence of how regulators in the state have been slow to address the repercussions of the shale oil boom.
- Bakken producers include CLR, EOG, WLL, HES, KOG, OAS, NOG, EOX, MRO.
Thu, Apr. 10, 10:46 AM
- Oklahoma is experiencing a noticeable increase in earthquakes near drilling sites, according to the Oklahoma Geological Survey, suggesting a potential link between fracking and seismic activity.
- The state already has experienced as many earthquakes YTD than all of last year combined: 109 earthquakes with a magnitude 3 or higher through April 6, the same number of earthquakes as in all of 2013.
- The incidents pose a conundrum for regulators in a state that has fully embraced oil and gas drilling.
- Among drillers with a significant Oklahoma presence: CHK, CLR, APA, DVN, SD, EOG, MRO, OKE, OKS, GPOR, WPX, WMB, WPZ, LPI, CWEI, NFX, NGL, COG, WLL, NBL, MPO, PQ, XEC
Mon, Apr. 7, 9:48 AM
- Brent crude prices slip below $106/bbl as worries about supply disruptions ease after Libyan rebels occupying four eastern oil ports agree to gradually end their eight-month blockade.
- Libya's Zueitina and Hariga ports, held by federalist rebels demanding more autonomy from Tripoli, will open immediately, while larger ports Ras Lanuf and Es Sider apparently will be freed in two to four weeks after more talks.
- Energy companies with a significant presence in Libya include Total (TOT), Statoil (STO), ConocoPhillips (COP), Marathon Oil (MRO), Hess (HES), Occidental Petroleum (OXY) and Repsol (REPYF, REPYY).
- ETFs: USO, OIL, UCO, SCO, DTO, DBO, BNO, CRUD, USL, UWTI, DNO, DWTI, SZO, OLO, 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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