EOG Resources Inc (EOG), Kodiak Oil & Gas Corp (USA) (KOG): Marathon Oil Corporation (MRO)’s Transition from Base to Growth

Similar efficiency drives among Bakken operators have proved to be advantageous. For example, Kodiak Oil & Gas Corp (USA) (NYSE:KOG) have lowered its spud-to-total depth to 18.5 days in the second quarter . This brought down overall well costs, a clear plus for Kodiak. When dealing with technologically advanced methods of extracting oil, economics plays a vital role. Investors should always keep an eye on the costs involved.

Promising international growth prospects
Marathon’s international portfolio, too, looks promising. The company is currently engaged in six proven or emerging hydrocarbon basins. This includes the pre-salt resources offshore Gabon. Holding a 21.5% working interest where French E&P TOTAL S.A. (ADR) (NYSE:TOT) is the operator, the Diaba block is estimated to hold reserves in the range 1.3-3.0 billion barrels of oil equivalent . Another very interesting project is in the Kurdistan region of Iraq with two new discoveries to date.

The rest of the international projects will continue to be Marathon’s base assets generating positive free cash flow. For the next five years, management has earmarked a base production rate of 350,000 Boed .

A nice mix of growth and legacy
The overall business model is disciplined for an international E&P. Marathon has so far managed to keep costs under check and improving gross margins. The balance looks solid with a debt-to-equity of  34%. With new CEO Lee Tillman, who previously has been overseeing the global engineering staff at ExxonMobil, things look exciting. Marathon Oil Corporation (NYSE:MRO) has definitely kept the right balance for base and growth assets.

The article Marathon Oil’s Transition from Base to Growth originally appeared on Fool.com and is written by Isac Simon.

Fool contributor Isac Simon has no position in any stocks mentioned. The Motley Fool recommends Total SA. (ADR).

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