Marathon Oil's (MRO) - Get Marathon Oil Corporation (MRO) Report decision to acquire privately held PayRock Energy LLC for $888 million, expanding its Oklahoma basin operations, provides yet another glimpse into the increasing prioritization of low-cost unconventional play acreage by U.S. operators. 

Morgan Stanley (MS) - Get Morgan Stanley (MS) Report analysts, who downgraded MRO in January leading into decade-low oil prices, recognized that motive Tuesday and viewed the asset purchase as a positive catalyst. 

The firm upgraded Marathon stock, which surged yesterday following the deal news but eased early Tuesday with slumping oil, to "overweight" from "equalweight" with an increased price target of $21 per share.

Morgan Stanley's price target represents a 31% upside potential from MRO's Monday closing price of $14.48 per share. Marathon's share price was up again Tuesday, however, surging nearly 1.5% to $14.70 apiece around midday. 

With Monday's deal for Oklahoma City-based PayRock, which has about 61,000 net surface acres and current production of about 9,000 net barrels of oil equivalent in the so-called STACK (Sooner Trend Anadarko Basin Canadian and Kingfisher Counties) region of Oklahoma, and non-core asset sales, Morgan Stanley believes MRO has upped its Oklahoma unconventional exposure just as the value upside to that play has increased. 

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"MRO's recent STACK acquisitions add material leverage to the fastest improving unconventional plays in the US, allowing for capital efficient growth into the next up-cycle," Morgan Stanley's Evan Calio wrote Tuesday. "We expect STACK will also provide material catalysts over the next 3+ quarters as it transitions from a delineation play to a development play."

Indeed, as low-cost play operators, particularly those with operations in the Permian Basin in western Texas and eastern New Mexico and the Anadarko Basin in Oklahoma, were called by analysts to be most likely to survive the downturn, so too are they being heralded by industry followers as sound investments on the way back up.

Barclays analysts Jeffrey Robertson and Oswald Cheung wrote Tuesday that the firm is initiating coverage on four Permian Basin focused players. The firm now rates Parsley Energy (PE) - Get Parsley Energy, Inc. Class A Report and Laredo Petroleum (LPI) - Get Laredo Petroleum, Inc. Report "overweight" with price targets of $30 per share and $14 per share, respectively.

Barclays also initiated coverage of Energen (EGN) , which has been pegged as possible merger candidate for Diamonback Energy (FANG) - Get Diamondback Energy, Inc. Report, and Matador Resources (MTDR) - Get Matador Resources Company Report with "equalweight" ratings and $50 per share and $23 per share price targets, respectively. 

Morgan Stanley warned Tuesday, however, that upside risks remain for Marathon, which is significant leveraged to oil prices.

Those risks include incremental supply increases from a faster-than-expected recovery in wildfire-impacted Canadian volumes, Libya's return to market, U.S. exploration and production companies ramping up activity ahead of expectations in 2017, and the U.S. dollar strengthening verus other oil consumer currencies in the aftermath of a possible Brexit.