S&P lifts Western Oil Sands, affirms Marathon Oil

Standard & Poor's said it affirmed its ratings, including the BBB+ long-term corporate credit rating and A-2 short-term rating, on Marathon Oil Corp. following the completion of its acquisition of Western Oil Sands Inc.

The agency also removed Western Oil Sands' BB+ corporate credit rating from CreditWatch, where it was placed with positive implications on July 31, and raised it so it equals the corporate credit rating of Marathon Oil. The rating on Western Oil Sands' $450 million senior unsecured notes due 2012 was similarly raised to BBB+ to match the senior unsecured rating on Marathon Oil's notes.

The outlook on both companies is stable.

The ratings on Marathon Oil reflect its satisfactory business risk profile as an integrated oil and gas company with a large, geographically diverse reserve base, a competitive refining and marketing business and an intermediate financial profile, S&P said.

These advantages are somewhat offset, the agency noted, by the highly volatile and cyclical nature of the oil and gas industry, operational inconsistency in Marathon Oil's upstream operations in recent years and management's tolerance for political and operating risk.

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