Mon, Aug. 24, 3:27 PM
- Chevron (CVX -5%) is upgraded to Neutral from Underperform with a $100 price target at BofA Merrill, which expects CVX’s net debt to stabilize with major projects beginning to contribute in 2017 and a drop in spending to maintenance levels.
- The firm says it has been concerned throughout the past year that CVX's cash burn would dilute equity value through peak spending at the same time that oil prices collapsed, but it no longer sees a risk, as CVX is discounting below strip prices but with a dividend.
- CVX requires sustained spending of $15B-$16B to hold production flat for an extended period,” BofA's Doug Leggate explains, adding that at $45-$50 oil, cash flow by 2017 would be closer to $29B so that the dividend is "more than covered" by cash flow in an ex-growth environment.
- ConocoPhillips (COP -6.2%) is the firm's top pick among the big oils after the stock has been hit hard, which the analyst thinks reflected unwarranted concerns regarding COP's dividend; at current strip prices, Leggate believes COP's upside is second only to Buy-rated Exxon Mobil (XOM -5.3%).
- However, the firm downgrades HollyFrontier (HFC -3.5%), Marathon Petroleum (MPC -7.2%) and Valero (VLO -4.7%) to Underperform and cuts Continental Resources (CLR -10.1%), Marathon Oil (MRO -8.4%), Noble Energy (NBL -5.4%) and Whiting Petroleum (WLL -8%) to Neutral.
Fri, Aug. 21, 12:34 PM
- "It's worse than you think," says longtime China bear Jim Chanos, having a day on CNBC. "Whatever you might think, it's worse."
- "People are beginning to realize the Chinese government is not omnipotent and omniscient ... like many of us, sometimes they don't have a clue."
- Chanos is short Solar City (SCTY -8.9%), saying it's really a subprime finance company, burning a lot of cash, and with negative EBITDA ... "this environment ... scary."
- He remains short some of the bigger names in the energy exploration and production space - DVN, MRO, OXY, APC.
- I don't like Shell (RDS.A -1.8%) or Chevron (CVX -1.5%), he says, and believes neither Chevron's dividend nor its buyback are safe.
- ETFs: FXI, ASHR, CAF, YINN, PGJ, GXC, FXP, YANG, CHN, PEK, MCHI, TDF, XPP, YAO, GCH, ASHS, YXI, CN, CHXF, FCA, CNXT, CHNA, KBA, JFC, AFTY, CHAU, XLE, VDE, ERX, OIH, XOP, ERY, DIG, DUG, BGR, IYE, IEO, FENY, PXE, FIF, PXJ, NDP, RYE, FXN, DDG, DRIP, GUSH
Wed, Aug. 19, 11:18 AM
- It's a broad decline for stocks this morning, with the S&P 500, DJIA, and Nasdaq all lower by 1% or more. Leading the way down are the energy names (XLE -2.5%) after an unexpected jump in oil inventories has sent the price of black gold down to new bear market lows at $41.30 per barrel.
- Chevron (CVX -2.9%), ConocoPhillips (COP -3.8%), EOG Resources (EOG -4.3%), Apache (APA -4.1%), Hess (HES -3.6%), Marathon Oil (MRO -5.5%), Noble Energy (NBL -3.1%), Anadarko (APC -3.6%).
- ETFs: XLE, VDE, ERX, OIH, XOP, ERY, DIG, DUG, BGR, IYE, IEO, FENY, PXE, FIF, PXJ, NDP, RYE, FXN, DDG, DRIP, GUSH
Thu, Jun. 25, 12:43 PM
- While UBS downgraded Chesapeake Energy (CHK -4.2%) and Murphy Oil (MUR -2.4%) today (I, II), the firm also upgrades Marathon Oil (MRO +1.4%) to Buy from Neutral with a $32 target price, finding MRO an attractive way to play its expectation for a long-term recovery in oil prices.
- UBS notes MRO's high oil exposure, above average debt-adjusted growth, leverage to low-cost resource in the Eagle Ford and SCOOP/STACK, strong balance sheet and inexpensive valuation vs. peers.
- The firm also says MRO is trading at a wider than normal discount to peers despite an above average cash flow per debt-adjusted share growth outlook.
Mon, Apr. 20, 10:58 AM
- Marathon Oil (MRO +2.3%) is upgraded to Overweight from Equal Weight with a $37 price target, raised from $25, at Morgan Stanley, as shares currently trade at a discount to peers despite the company's above average production.
- MRO has significantly lagged in the 2015 recovery in the E&P segment, and the firm says its discounted valuation has been traditionally justified by the company's shorter than peer inventory life, but the oil price driven pullback in activity has narrowed the gap.
- Stanley says MRO's downspacing efforts and enhanced completion are expected to provide a steady stream of catalysts in the near to medium term, leading to an increased NAV of $56/share.
Tue, Apr. 7, 12:59 PM
- Peabody Energy (BTU +7.3%) spikes higher after Balyasny Asset Management's Christian Zann tells CNBC he likes the stock as a value play in the coal space.
- Zann points out that coal is a relatively low capital intensive business vs. shale producers, who must spend considerable sums drilling new wells to maintain a production base.
- Zann likes Schlumberger (SLB +1%) and Halliburton (HAL -1.3%) among oil services stocks, and Marathon Oil (MRO +1.3%) in the E&P group.
Mon, Jan. 5, 12:18 PM
- Energy stocks severely underperform the broader market, with the sector -4.2% vs. the S&P 500's -1.4%, as U.S. oil prices briefly slip below $50/bbl for the first time since April 2009; Nymex crude recently was -4.4% at $50.37, while Brent crude -5.9% at $53.08.
- Among the day's biggest losers: DNR -9%, RIG -7.6%, NBR -4.8%, CHK -5.9%, SDRL -9.1%, SD -12.3%, NOV -5.9%, PSX -6.2%, APA -5.9%, DVN -4.4%, EOG -6%, SU -5.2%, OXY -4.2%, APC -8.7%, PWE -9%, ECA -5.5%, MRO -5.3%.
- Global oil majors, which have been seen as less vulnerable to falling oil prices, are posting big losses: XOM -2.7%, COP -4.5%, CVX -3.8%, BP -5.8%, RDS.A -4.6%, TOT -6.5%.
- ETFs: USO, XLE, OIL, UCO, ERX, VDE, OIH, SCO, XOP, ERY, FCG, DIG, PBW, BNO, GASL, DTO, DBO, DUG, IYE, XES, IEO, QCLN, IEZ, UWTI, PXE, USL, PXI, FENY, DWTI, PXJ, DNO, PSCE, RYE, SZO, PUW, FXN, OLO, DDG, HECO, TWTI, OLEM
Dec. 2, 2014, 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.
Dec. 2, 2014, 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."
Nov. 3, 2014, 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.
Oct. 9, 2014, 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
Aug. 5, 2014, 8:24 AM
- Marathon Oil (NYSE:MRO) +1.8% premarket after reporting better than expected Q2 earnings, driven by strong production growth and higher crude oil and condensate prices in the U.S.
- Production available for sale from continuing operations, excluding Libya, rose 6% Y/Y to 383K boe/day, attributed to continued growth in North American shale production.
- MRO expects the region to produce 235M-248M boe/day in Q3 vs. 200M boe/day in the year-ago quarter.
- Three high-quality Eagle Ford plays averaged net production of 170K boe/day, up 29% Y/Y and on track for greater than 30% Y/Y production growth.
- Income from North American exploration and production rose 37% to $302M on higher sales volume that offset a 16% increase in exploration expenses.
- Recorded 98% average operational availability for Company-operated assets.
Jul. 14, 2014, 2:21 PM
- Whiting Petroleum's (WLL +7.4%) $6B buyout of Kodiak Oil & Gas (KOG +5.1%) is renewing investor attention on independent energy firms with operations in the Bakken Shale, especially those significantly owned by hedge funds; Paulson & Co. is the single biggest owner of KOG stock, with just under 10% of shares outstanding as of the last filing date.
- While many of the largest Bakken producers are huge companies or parts of huge companies - Hess (NYSE:HES), EOG, Statoil (NYSE:STO), Marathon Oil (NYSE:MRO), XTO Energy (NYSE:XOM) - a few small and mid-cap independent players show hedge fund interest, CNBC's Brian Sullivan writes.
- The single biggest holder of Oasis Petroleum (OAS +0.5%) also is John Paulson's hedge fund, which owns 9.9M shares (~9.8% of shares outstanding), Jana Partners owns 16M-plus shares in QEP Resources (QEP +1.4%), and WPX Energy (WPX +1.1%) has substantial hedge fund ownership.
May 6, 2014, 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.
Apr. 21, 2014, 5:45 PM
Feb. 5, 2014, 5:49 PM
- Marathon Oil (MRO) -1.5% AH after reporting lower Q4 sales volume, though the bottom line grew 16% due to fewer income tax provisions.
- MRO has generally posted higher production in recent periods from its extensive activity in areas such as the Bakken shale in North Dakota and Eagle Ford shale in Texas, boosting earnings.
- Total net proved reserves were ~2.2B boe at the end of 2013, up 8% Y/Y; reserve replacement ratio was 194%, with 344M boe of net proved reserves added.
- Operating margin narrowed to 26.8% from 39.8%, while provisions for income taxes tumbled 60% to $522M.
- Sales volumes slid 13% Y/Y and fell 3.3% Q/Q.
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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