ConocoPhillips (COP), Marathon Oil Corporation (MRO), Murphy Oil Corporation (MUR): Are Independent Producers Better Investments?

With 38% of its proven reserves between the Eagle Ford Shale and its Canadian Syncrude operation, Murphy Oil Corporation (NYSE:MUR) has already accepted that unconventional plays are the way to grow. .

North American natural gas is a liability due to depressed market pricing, and Murphy Oil Corporation (NYSE:MUR) has 29% of its proven reserves in natural gas. On the positive side, 8% of these reserves come from Malaysia where prices are tied to oil benchmarks and command a significantly higher price.

Looking at Murphy Oil Corporation (NYSE:MUR)’s upstream operating income, it managed to produce $15.55 per Boe. Murphy Oil Corporation (NYSE:MUR) does not have Marathon Oil Corporation (NYSE:MRO)’s Libyan liabilities, and its recent quarterly production of 207 Mboepd makes it a small producer with a large amount of room to grow.

Conclusion
Out of the three companies mentioned here, Murphy Oil Corporation (NYSE:MUR) is a solid company to watch. It is relatively small, allowing for a few major fields like the Eagle Ford to have a substantial impact on its bottom line. It is still waiting to spin-off its U.K. refinery operations, and it is likely that more concrete plans will be announced as a future catalyst.

ConocoPhillips (NYSE:COP) is doing well after creating Phillips 66, but the company is a large producer at 1,552 Mboepd. It will need to keep up its capital expenditures and exploration to maintain production over the coming decade. With 44% of its earnings going to its dividend, its cash flow may become constrained. Marathon Oil Corporation (NYSE:MRO) has lower margins and a lower yield than ConocoPhillips (NYSE:COP), but its presence in the Bakken, Eagle Ford and conservative use of cash flow make Marathon Oil Corporation (NYSE:MRO) a more stable dividend stock.

The article Are Independent Producers Better Investments? originally appeared on Fool.com and is written by Joshua Bondy.

Joshua Bondy has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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