<
The move reflects confidence in what one analyst this week characterized as the "Goldilocks" scenario, with $100-a-barrel oil making development in unconventional shale plays economically feasible but still $15 to $20 below the price where demand would be destroyed.
The industry also has reason to be optimistic that localized opposition to the shale-gas boom is being successfully countered with arguments that environmental restrictions jeopardize desperately needed jobs and deprive depleted government coffers of new revenues.
Marathon Oil appears on a daily list created using StockScouter, an MSN Money tool that identifies stocks with strong growth prospects in the near term. All stocks with Scouter ratings of 8, 9 or 10 are considered for the list, which is then shortened to exclude those with a trading volume below 50,000 shares a day. The remaining stocks are ranked on the basis of market capitalization, sector membership and whether they are growth or value stocks.
The Houston company this year spun off refining operations to sharpen its focus on shale acreage in the United States, as well as on exploration and development projects in Canada's tar sands, as well as in Poland, Libya, northern Iraq, the deepwater Gulf of Mexico and off the coast of Angola.
The increased spending on domestic production should allow Marathon to boost its annual output by 5% to 7% a year, on average, to 2016, the company said. Marathon holds about 1 million acres across its U.S. plays, Investor's Business Daily reported. Daily production is projected to grow from 70,000 barrels of oil equivalent to 175,000 barrels by 2016.
But the technology known as hydraulic fracturing, or fracking, used to extract oil and gas from shale has sparked a backlash in communities from California to New York concerned about the effects on drinking water, noise levels and air quality. So far, at least, economic arguments in favor of drilling have trumped environmental concerns.
In economically distressed California, Gov. Jerry Brown recently dismissed the state's top two oil and gas regulators following industry complaints about the pace of permitting for natural-gas drilling projects. And suburban property owners in the Northeast who have invoked zoning laws and environmental rules to oppose gas drilling have largely been outmaneuvered.
The industry also is confronting air-pollution limits on energy production that were recently issued by the U.S. Environmental Protection Agency. The EPA is working on rules governing water discharge from drilling operations, which are scheduled to take effect in 2014. Fracking injects chemicals and water into rock formations to release the hydrocarbons trapped inside.
Paul Sankey, the Deutsche Bank analyst who described the Goldilocks scenario, raised his rating on Marathon to "buy" from "hold" on Dec. 13 and upped his price target by $4 to $37.
Of the 17 analysts covering the company, eight have a "strong buy" recommendation, one gives the stock a "moderate buy" rating and eight rate it a "hold."
Marathon Oil has a StockScouter rating of 9, meaning the stock is expected to significantly outperform the market over the next six months with average risk.
| StockScouter top 10 for Dec. 16 | ||||
| Company | Sector | Dividend yield | Forward P/E | Scouter score |
|---|---|---|---|---|
| Medtronic (MDT 0.00%, news) | Implantable medical devices | 2.74% | 9.5 | 10 |
| American Eagle Outfitters (AEO +0.76%, news) | Apparel retailer | 3.01% | 13.4 | 10 |
| American Express (AXP 0.00%, news) | Credit and travel services | 1.55% | 11.3 | 10 |
| Chevron (CVX 0.00%, news) | Oil and natural gas | 3.25% | 13.5 | 10 |
| Philip Morris International (PM 0.00%, news) | Cigarettes | 4.06% | 14.5 | 10 |
| Western Union (WU 0.00%, news) | Money transfers | 1.84% | 10.4 | 10 |
| Caterpillar (CAT 0.00%, news) | Earth-moving equipment | 2.10% | 9.7 | 9 |
| CSX (CSX 0.00%, news) | Railroads | 2.40% | 10.6 | 9 |
| Marathon Oil (MRO 0.00%, news) | Oil and natural gas | 2.22% | 7.7 | 9 |
| Annaly Capital Management (NLY 0.00%, news) | Real estate investments | 14.77% | 7.1 | 9 |
Posts
1 comment:
For those investors looking for an exchange traded fund that invests in lithium stocks their is an exchange traded fund that invest in stocks in the lithium business it is Global X Lithium ETF symbol (LIT
Post a Comment