Bank Of America Comments On Marathon Oil Split

According to Bank Of America, Marathon Oil MRO will formally split in two on 6/30. Bank Of America said that, in preparation for the split Marathon Petroleum Corporation will debut on a ‘when issued' basis, under the symbol MPC, with a third quote MROwi listed to represent pro-forma value of Marathon Oil. “The implication of MPC's re-rating is that MRO's upstream is de-rated further from current levels. But a thorough examination of the assets reveals greater portfolio resilience than is currently perceived by the market with cash flow 3x what is necessary to sustain production. Our analysis suggests over half of MRO's upstream asset base would be valued at just 2.4x cash flow for an asset base that looks poised to double the associated reserve life over the next five years. This is the catalyst we believe will drive a rerating of the shares. Reiterate Buy.” Marathon Oil closed yesterday at $52.79.