• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • TheStreet Smarts
  1. Home
  2. / Investing
  3. / Energy

Marathon Oil Becomes Latest Energy Company to Issue More Equity

The Houston-based company announced plans to issue $1.3 billion in equity for capital spending and general corporate purposes.
By CARLETON ENGLISH Mar 01, 2016 | 09:31 AM EST
Stocks quotes in this article: MRO, DVN, ENB

This story was updated at 9:15 AM ET on Mar. 1, 2016, to add commentary and to include the value of the increased offering.

Marathon Oil (MRO) is the latest energy company this year to issue equity in an effort to strengthen its balance sheet.

On Monday, the Houston-based company announced a public offering of 135 million shares of common stock alongside an offering of 20.25 million additional shares for its underwriters. Taken together, the total offering is $1.3 billion. Shares of Marathon Oil have rebounded after falling nearly 8% in after-hours trading on the news.

Soon after announcing the initial offering on Monday, Marathon Oil increased the offering to 145 million shares priced at $7.65 a share, representing a slight discount as Marathon's shares closed at $8.21 on Monday. 

"Marathon Oil intends to use the net proceeds of the proposed offering to strengthen its balance sheet and for general corporate purposes, including funding a portion of its capital program," the company said in a statement released on Monday. Earlier this month, Marathon Oil announced its $1.4 billion capital program for 2016, down 50% from 2015,

It isn't the only energy company to issue equity for the same purpose this month -- or even within the last two weeks.

So far this year, energy companies have issued $10.99 billion in equity, according to data compiled by Bloomberg. Earlier this month, Devon Energy (DVN) announced plans to issue $1.3 billion hours after saying on a call with analysts that it was focusing on asset sales and dividend reduction to meet its financial needs. Last week, Canada-based Enbridge (ENB) announced plans to issue $1.45 billion in equity and Houston-based Newfield Exploration (NFX) announced plans to issue $700 million to possibly pay outstanding borrowings under its credit facility.

Marathon Oil didn't shy away from the possibility that it may need to issue more shares this year.

"Although our business plan assumes the successful execution of our non-core assets program to really contribute to our goal of free cash flow neutrality, we have to continue to keep all options on the table and available to us that give us that financial flexibility going forward," CEO Lee Tillman said in a call with analysts.

Real Money contributor Jim Collins called the move a "wise choice" in a post on Tuesday. While the offering represents a 20% dilution to Marathon Oil's shareholders, it is a far better choice than adding to its $7.3 billion long term debt load, Collins wrote.

For a technical look at Marathon Oil, Real Money's resident chartist, Bruce Kamich, noted that the on-balance-volume line in Marathon Oil's chart may be bottoming, but it is too early to make strong statements about its direction.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Employees of TheStreet are restricted from owning individual securities.

TAGS: Investing | U.S. Equity | Energy

More from Energy

Here's How Investors Can Get in on Soaring Uranium Prices

Bruce Kamich
Jun 1, 2023 12:33 PM EDT

The charts of this fund are giving off a positive glow.

It's a Long Shot, but Here's My Ideal Scenario to Keep the Fed in Check

Bob Byrne
May 30, 2023 7:15 AM EDT

It involves people pocketing their savings from lower gasoline prices so that the economy cools and the Fed doesn't need to raise rates again.

3 High-Yield International Oil & Gas Majors

Bob Ciura
May 27, 2023 7:15 AM EDT

The top global energy names are returning more cash to shareholders through dividends and share repurchases.

CorEnergy Takes Important Step in Deleveraging

Jim Collins
May 25, 2023 1:15 PM EDT

However, the preferreds are no longer 'money good.' So a completely new 'distressed company' calculus has taken over.

Chevron: Drilling Down on the Charts

Bruce Kamich
May 23, 2023 2:18 PM EDT

Here's where aggressive traders could probe.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 01:51 PM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    Adjusting Your Trading Approach to Shifting Market...
  • 06:54 PM EDT CHRIS VERSACE

    AAP Podcast: A Tongue -- and a Market -- Twister: 'Get a Debt Deal Done'

    Listen in as the Action Alerts PLUS Podcast tackle...
  • 12:07 PM EDT STEPHEN GUILFOYLE

    Selling Some of This Surging AI-Related Stock

    This isn't the only name in the Stocks Under $10 p...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2023 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login