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Marathon Oil (MRO) to Redeem $500M Senior Notes to Ease Debt Load

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Marathon Oil Corporation (MRO - Free Report) entered a transaction to fully redeem the $500 million in aggregate outstanding principal amount of its 2.8% senior notes due 2022.

Notably, the company will redeem the aforementioned senior notes on Apr 29, 2021.

The transaction will result in a $500-million reduction in gross debt and annual cash interest expenses by $14 million. Importantly, the transaction aligns with the company’s pledge to reduce gross debt by $500 million in 2021 to strengthen its balance sheet.

Marathon Oil is involved in prolific oil-producing resource plays, including the Eagle Ford in Texas, the Bakken in North Dakota, the STACK and SCOOP in Oklahoma, and the Permian Basin in New Mexico. Also, it has international production and operations in Equatorial Guinea, located on the west coast of South Africa.

The redemption transaction reflects advancement toward ensuring that at least 30% of cash flow generated from the company’s operating activities is aimed at investor-friendly purposes.

Moreover, the transaction is in line with Marathon Oil’s objective to continue improving its investment-grade balance sheet through gross debt reduction and sustainable free cash flow generation.

Company Profile & Price Performance

Headquartered in Houston, TX, Marathon Oil is a leading oil and natural gas exploration and production company. The company’s stock has gained 159.3% in the past six months.

Zacks Rank & Stocks to Consider

The company currently has a Zack Rank #3 (Hold).

Some better-ranked players in the energy space are PetroChina Company Limited (PTR - Free Report) , Whiting Petroleum Corporation (WLL - Free Report) and Suncor Energy Inc. (SU - Free Report) , each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

PetroChina’s earnings for 2021 are expected to rise 45.5% year over year.

Whiting Petroleum’s earnings for 2021 are expected to surge 214% year over year.

Suncor’s earnings for 2021 are expected to rise 230% year over year.

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