Friday, June 3, 2011

Marathon Oil (MRO) Retains "Buy" Rating as it Targets Eagle Ford

Deutsche Bank (NYSE:DB) analysts like what they see with Marathon Oil (NYSE:MRO), reiterating its "Buy" rating on the company.

The integrated energy company, with operations mostly in North America, Europe and Africa, announced it has come to an agreement to acquire acreage in the Eagle Ford shale formation in South Texas from Hilcorp Resources Holdings, L.P. for $3.5 billion.

Hilcorp, the company Marathon is acquiring the acreage from, is backed by private equity firm Kohlberg Kravis Roberts & Co. (NYSE:KKR).

As for oil prices, light sweet crude for delivery in July, fought back from big losses and closed 11 cents up at $100.40 a barrel.

In London, Brent North Sea crude for July settled at 115.54 a barrel, jumping $1.01 from Wednesday's close.

Higher prices has pressured gasoline, as consumers appear to be significantly cutting back on travel and spending heading into summer, as gas reserves rose higher then anticipated. Oil inventories were also expected to fall, but instead jumped by 2.9 million barrels.

Marathon closed Thursday at $52.51, falling $0.14, or, 0.27 percent.

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