Strong US operating momentum continues
With MRO's US production +36% YoY on a divestiture-adjusted basis, operating momentum is strong. Cost performance is good, with FY18 development capex held at $2.3bn and QoQ declines in cash opex (e.g. US -3% QoQ). No buy-back announced but strong free cash flow (6% annualized organic FCF yield) indicates re-purchases can resume. Forward cash earnings multiples remain modest versus peers; we reiterate our Overweight rating, $24.10 price target.Marathon Oil is an independent exploration and production company focused on the United States resource plays. The company also has international operations in Equatorial Guinea (E.G.). The company's segments are: United States, which explores for, produces and markets crude oil and condensate, natural gas liquids (NGLs) and natural gas in the United States; and International, which explores for, produces and markets crude oil and condensate, NGLs and natural gas outside of the United States as well as produces and markets products manufactured from natural gas, such as liquefied natural gas and methanol, in E.G.
Formed in 2003 by an established team from Cazenove, one of the most respected investment banks in the UK, Atlantic Equities conducts and publishes fundamental, bottom up research on mid and large cap US companies.
Atlantic provide order execution through a wide range of DMA products and algorithmic trading suites.
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