Fitch changes Marathon view to negative

Fitch Ratings said it revised the outlook for Marathon Oil Corp. to negative from stable.

The main driver of the revised outlook is the sharp drop in oil prices, which led Fitch to revise its base case price deck lower, resulting in weaker near-term leverage metrics and cash flow protections. In response to the downturn, Marathon will cut its 2020 capital expenditures by at least $500 million.

“While the company has good financial flexibility and a meaningful one-year hedge position to help bridge a low oil price period, the negative outlook is meant to capture the risk to its credit profile should a scenario of very low oil prices be prolonged,” said Fitch in a press release.

The agency also affirmed its BBB ratings on Marathon and its senior unsecured debt.

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