Although Marathon Oil Corporation has made the right moves and executed well, looking at companies across the large cap E&P space and considering their well performance relative to expectations, “we continue to see more momentum in the purer play Permian names,” Credit Suisse’s Edward Westlake said in a report.
Analyst Westlake downgraded the rating on Marathon Oil from Outperform to Neutral, while maintaining the price target at $19.
Making The Right Moves
Marathon Oil increased its 2P shale resource inventory by 20 percent to 3.5 billion boe in 2015. The company increased its Oklahoma resource by 57 percent to 2.2 billion boe in 2016.
“MRO has done an excellent job of increasing the resource base, mainly in Oklahoma, and lowering well costs, and has become more assertive on its completions. The STACK continues to get better – indeed MRO increased the type curve for the STACK by more than 35% last week,” Westlake wrote.
Although the company has made “real progress,” there seems to be “better relative value elsewhere,” the analyst commented.
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| Date | Firm | Action | From | To |
|---|---|---|---|---|
| Sep 2016 | Credit Suisse | Downgrades | Outperform | Neutral |
| Sep 2016 | Societe Generale | Downgrades | Buy | Hold |
| Sep 2016 | Jefferies | Maintains | Buy |
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