03:05 PM EDT, 04/02/2024 (MT Newswires) -- Marathon Oil's ( MRO ) $1.2 billion debt offering, split between five and 10-year notes, postpones immediate repayment obligations and reduces interest expenses, UBS Securities said in a report emailed Tuesday.

The increased liquidity will also bolster prospects for share repurchases, UBS said. The company priced $600 million of 5.3% senior notes due April 2029 and $600 million of 5.7% senior notes due April 2034.

"Marathon Oil ( MRO ) will use the proceeds to pay off, in full, the $1.2 [billion] balance on its floating rate term loan that matures November 2024 and had been entered into following the Ensign acquisition, last bearing a 7.21% interest rate," UBS said.

Despite the shift to longer-term notes, the company maintains its goal of reducing gross debt to $4 billion post buyback completion, UBS said. The energy debt market is open, providing opportunities for cost savings, addressing near-term maturities, and supporting shareholder returns, UBS said.

Marathon Oil ( MRO ) is "now better positioned to leverage rising crude oil prices," UBS said.

UBS maintained a neutral rating on Marathon Oil ( MRO ) with a 12-month price target of $27.

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