When Marathon Oil Corp. (NYSE: MRO) announced last Thursday that it had sold all its interests in Canada’s Athabasca Oil Sands Project for $2.5 billion in cash, the stock added about $1.00 (6.7%). By midday Tuesday, the company had given all the gain back, not because it turned out to be a bad deal but because crude oil prices have plunged over the past several trading sessions.

Analysts at Canaccord Genuity have reiterated their Hold rating and $17 price target on the stock, calling the exit from Canada a “win-win” both for Marathon and for buyers Shell and Canadian Natural Resources.

At the same time Marathon announced the divestiture, it also announced the acquisition of approximately 70,000 net surface acres in the Delaware Basin (Permian Basin) for $1.1 billion in cash. The acquisition added about 5,000 barrels a day of existing production.

Energy analyst Stephen Berman at Canaccord said:

We view this divestiture, which represents a complete exit from Canada for MRO, as positive as it simplifies the portfolio while shifting to lower cost, higher margin resource plays in the US, represents a 15x multiple on 2016 operating cash flow, eliminates material future capex requirements for a non-operated asset, and, including the [Delaware Basin] acquisition …  is expected to result in a 25% reduction in total company operating expenses in 2017 based on closing dates for both transactions.

The Canaccord note also highlights Marathon’s strong financial position. Total liquidity at the end of 2016 equaled $5.8 billion. Following these two transactions, the company’s liquidity will be around $7.2 billion, including cash and an undrawn, unsecured revolving credit facility of $3.3 billion.

Analysts also expect Marathon to retire approximately $1.5 billion in bonds maturing late this year and early next. The company did not announce capex plans for the newly acquired Delaware Basin assets, but spending is expected to be incremental to the announced $2.2 capex budget.

The bad news for Marathon has been the same as for all other producers: crude prices have tumbled and traded at $47.35 a barrel for West Texas Intermediate in the noon hour Tuesday, down about 2.2% for the day. Marathon’s stock traded down about 4.4% at $15.15 in a 52-week range of $9.65 to $19.28 with a consensus 12-month price target of $20.83.

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