Leading upstream energy player, Marathon Oil Corporation (MRO - Analyst Report) recently reported that it has signed a deal to sell some of its non-core assets in West Texas and New Mexico for $235 million.
Marathon Oil is expected to divest its non-operated, conventional CO2 and waterflood assets to an unidentified buyer by the end of this year. These assets produced about 4,000 barrels of oil equivalent per day in the first half of 2016.
Marathon Oil is in the midst of a massive divestment program. Since Aug 2015, the company has announced non-core asset sales of more than $1.5 billion.
In August 2015, the company divested its Wilburton, OK assets for an amount of $102 million. Later, Marathon entered into an agreement to divest its Gulf of Mexico (GoM) assets for a total price of $205 million. The deal was closed at the end of 2015. Marathon’s largest divestment deal to date was the sale of all its Wyoming upstream and midstream assets for roughly $870 million. This deal was closed in mid-2016.
With oil prices remaining low for a long time now and the commodity mostly still hovering below the $50 a barrel level, exploration and production companies like Marathon Oil have been finding it difficult to borrow funds from lenders. Hence, most of these firms have been compelled to sell their non-core properties to meet their expenses.
MARATHON OIL CP Price
Marathon Oil is a leading energy firm with a large and geographically-diverse reserve base and solid project pipeline. Additionally, it possesses a healthy balance sheet, which helps it to capitalize on investment opportunities.
The company currently carries a Zacks Rank #3 (Hold), implying that it will perform in line with the broader U.S. equity market over the next one to three months.
Some better-ranked players in the broader energy sector include Evolution Petroleum Corp. (EPM - Snapshot Report) , Enviva Partners, LP (EVA - Snapshot Report) and CONE Midstream Partners LP (CNNX - Snapshot Report) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the last four quarters, Evolution Petroleum posted an average positive earnings surprise of 45.84%.
Enviva Partners, on the other hand, posted an average positive earnings surprise of 0.19% in the last four quarters.
In the last four quarters, CONE Midstream Partners posted an average positive earnings surprise of 19.38%.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>