A recovery in oil prices should spur Marathon's development of its higher-quality U.S. assets. - Morningstar Equity Research

A recovery in oil prices should spur Marathon's development of its higher-quality U.S. assets.

A recovery in oil prices should spur Marathon's development of its higher-quality U.S. assets. - Morningstar Equity Research
A recovery in oil prices should spur Marathon's development of its higher-quality U.S. assets.
Published Jan 02, 2017
23 pages — Published Jan 02, 2017
Price US$ 400.00  |  Buy this Report Now

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Brief Excerpt:

...After updating our oil and natural gas price assumptions and incorporating the latest guidance and results into our model, we are increasing our fair value estimate to $13 per share from $10. This corresponds to a forward enterprise value/EBITDA multiple of 5.5 times our 2017 EBITDA forecast of $3.0 billion. In our DCF model, our benchmark oil and gas prices are based on Nymex futures contracts for 2016-18. For natural gas, we use $2.45 per thousand cubic feet in 2016, $3.43 in 2017, and $3.04 in 2018. Our long-term assumption is $3.00. For oil, we use Brent prices of $45 per barrel in 2016, $61 in 2017, $48 in 2018, and $60 in 2019. Our long-term oil-price assumption is $60. We assume a cost of equity of 11% and a weighted average cost of capital of 7.7%. We forecast production of 339 mboe/d in 2016 (excluding Libya), in line with management s guidance of 335-345 mboe/d. Production will fall in 2016 on lower spending but should resume growing in 2017, albeit at a slower rate than the past...

  
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0P000003GA_20170102_INST
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Institutional Company Report
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MLA:
Morningstar Equity Research. "A recovery in oil prices should spur Marathon's development of its higher-quality U.S. assets." Jan 02, 2017. Alacra Store. Jun 27, 2019. <http://www.alacrastore.com/storecontent/Morningstar-Equity-Research/A-recovery-in-oil-prices-should-spur-Marathon-s-development-of-its-higher-quality-U-S-assets-2064-135556>
  
APA:
Morningstar Equity Research. (2017). A recovery in oil prices should spur Marathon's development of its higher-quality U.S. assets. Jan 02, 2017. New York, NY: Alacra Store. Retrieved Jun 27, 2019 from <http://www.alacrastore.com/storecontent/Morningstar-Equity-Research/A-recovery-in-oil-prices-should-spur-Marathon-s-development-of-its-higher-quality-U-S-assets-2064-135556>
  
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