Leading integrated oil and gas firm,
Marathon Oil Corp.
) is pursuing its plan to buyback common shares worth $1 billion.
The company has also provided an update relating to its asset
sale and purchase activities.
Marathon Oil expects its share repurchase program to be executed
in two stages. In the first phase, a substantial part of the $500
million stock buyback is complete. However, the second phase will
comprise the repurchase of the remaining $500 million worth of
shares, after completion of the previously declared divestment of
the company's 10% ownership in offshore Angola-based Block
On June 2013, Marathon Oil entered into a deal with Sonangal
Sinopec International Ltd - a subsidiary of crude oil and natural
China Petroleum and Chemical Corp
), to divest its interest in Block 31 for roughly $1.5 billion.
Moreover, after the $1 billion share repurchase, Marathon Oil is
expected to have $800 million buyback remaining under its
authorized share repurchase program. Management believes that the
share repurchases will create long term value for the share
Additionally, Marathon Oil announced that it has inked a
production sharing and joint agreement contract with Sonangol EP.
Per the contract, Marathon Oil will divest its 10% ownership in
Block 32, based off the coast of Angola, for a consideration of
roughly $590 million.
The deal will be closed by the fourth quarter of 2013, subject
to approvals from the government. Marathon Oil added that
including the divestment of Block 32, its present agreed or
completed selling of assets is at $3.5 billion, which is ahead of
the company's three-year target range.
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Additionally, Marathon Oil plans to buy roughly 4,800 acres of
land in the Texas-based Eagle Ford shale field. The company is
expected to invest $97 million for the asset acquisition.
Houston, Texas-based Marathon Oil currently retains a Zacks Rank
#3 (Hold), implying that it is expected to perform in line with
the broader U.S. equity market over the next one to three months.
Meanwhile one can look at
TransAtlantic Petroleum Ltd.
PostRock Energy Corp.
) that add value. TransAtlantic Petroleum holds a Zacks Rank #1
(Strong Buy) while PostRock Energy sports a Zacks Rank #2