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Gold/Mining/Energy : Marathon Oil -- Ignore unavailable to you. Want to Upgrade?

To: Dennis Roth who wrote (16)	4/14/2008 1:49:33 PM
From: DELT1970	Respond to of 17

Adjusting 1Q08 Estimate for Interim Update Summary and Recommendation from Friedman Billings Ramsey "Following the company's April 8 interim update, we are lowering our 1Q08 EPS estimate from $1.25 to $0.75 to reflect weaker-than-expected downstream margins, higher exploration expense, and lower-than-guided oil sands production. This reduces our 2008 EPS estimate from $5.40 to $4.90. We maintain our $60/share NAV-based price target and Market Perform rating. The stock remains the cheapest of the group on a multiple metrics; however, following the company's recent analyst meeting, we do not see material near-term positive catalysts. Key Points • Weaker-than-expected downstream margins. Marathon stated that it expects its 1Q08 refining and marketing margins to be slightly negative due to the weak margin environment and $120 million in derivative losses. • Higher exploration expense. Total exploration expense is now estimated to be between $135 million and $145 million, at the upper end of the $120 million to $145 million prior guidance. This suggests a significant number of dry holes, in our view. • Lower-than-guided oil sands production. Production is estimated at 24,000 bpd, below the 30,000 bpd guidance, due to weather-related issues and unplanned maintenance. • In-line production sales. Volumes are projected to be approximately 372,000 Boe/d, in the middle of the company's 360,000 Boe/d to 380,000 Boe/d prior guidance. • Earnings release May 1. The company plans to release 1Q08 earnings May 1, 2008."