Marathon Oil’s Debt Load Matters

For 3Q16, Marathon Oil (MRO) reported total debt of ~$197 per boe (barrel of oil equivalent) of production, which was ~4% lower than in with 3Q15.

Marathon Oil’s total debt normalized to quarterly production has been at higher levels since 2Q15, mainly due to declining productions. Sequentially, Marathon Oil’s total debt normalized to quarterly production in 3Q16 was ~3% lower than in 2Q16. In 2Q15, Marathon Oil reported its highest total debt normalized to quarterly production of ~$223.42.

By comparison, upstream companies Denbury Resources (DNR), Devon Energy (DVN), and Diamondback Energy (FANG) have total debt normalized to quarterly productions of ~$525, ~$217, and ~$139 per boe, respectively.

Notably, the Direxion Daily S&P Oil & Gas Exploration & Production Bear 3x Shares (DRIP) is a leveraged inverse ETF that invests in oil and gas exploration and production companies.