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Marathon Oil Corp.

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Marathon Oil is a leading energy firm which has successfully positioned itself into the Delaware Basin and low cost-high margin STACK/SCOOP resource plays while exiting the oil sands and conventional assets with limited upside. Driven by the robust performance in the recent quarter, MRO raised its total production guidance for 2018 by around 18%. The company is committed to strengthening its financials by debt reduction and looks poised for strong free cash flow generation through the end of the decade. But while being incrementally positive on the company, we believe that MRO's high emphasis on strategic acquisitions and balance sheet strengthening but low priority toward dividend growth and share buyback programs may dampen investor's confidence. Further, we also need to factor the company's increasing costs and stuttering Libyan operations. As such, we maintain our cautious stance on the prospects of the stock.


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