Marathon Oil Corporation operates as an energy company in the United States, Equatorial Guinea, the United Kingdom, and Libya. The company engages in the exploration, production, and marketing of crude oil and condensate, natural gas liquids, and natural gas.
Marathon Oil (NYSE: MRO) is among the leaders in the Eagle Ford Shale. The company pumped 107,000 BOE per day from the region during the fourth quarter of 2018. Marathon’s focus in recent years has been on improving its drilling efficiency. That was on full display last year as its oil output in the Eagle Ford rose 7% even though it bought 5% fewer wells online. This improved well productivity is helping boost Marathon’s returns and generate free cash flow.
Marathon’s focus in the Eagle Ford will be to continue increasing efficiency so that it can grow production at a healthy clip while generating a gusher of free cash flow. That will allow the company to reinvest in emerging areas elsewhere as well as return more money to shareholders. Marathon Oil is currently on track to grow its total oil output at a double-digit pace through 2020 while producing more than $2.2 billion in free cash over that timeframe given where crude prices are right now. That would give it the funds to buy back a significant portion of its outstanding shares, which could help propel its stock price skyward.
Yesterday, RBC Capital upgraded Marathon Oil to outperform with a price target of $23. On the monthly chart, price has been making higher lows and higher highs.
However, I love the target because the chart suggests there are no significant buyers between current price and the weekly supply at $24.50.
This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.