Ahead of the Bell: Marathon Oil

Citi Investment Research analyst Doug Leggate said the last time Marathon Oil provided an update was November 2006.

"Much has changed since then," Leggate wrote in a client note.

One change, Leggate said, is the company's $5.5 billion cash-and-stock purchase of Western Oil Sands, which Marathon completed last year. The purchase allows Marathon to tap into Canada's growing oil-sands market.

Another is Marathon's success in exploration in Angola and the Gulf of Mexico. "Exploration is the key story with this company," Leggate wrote.

Leggate said Marathon's recent performance has been poor, but he attributed that to overall market turmoil and weak year-end results that have "no bearing" on the company's 2008 outlook. Leggate expects a 17 percent rise in production in 2008.

"We continue to believe Marathon offers the greatest combination of value, growth and operational catalysts of the U.S. oils," wrote Leggate, who has a "Buy" rating on the stock.

Marathon is based in Houston and has operations in the U.S., Angola, Canada, Indonesia, among numerous other countries. The company is the nation's fifth largest refiner.