Marathon Oil narrows loss, cuts capex
- Business & Finance
U.S. oil and gas company Marathon Oil tightened its net loss for the second quarter and reduced capex for the year.
On Wednesday, the oil company reported a second quarter 2017 net loss of $139 million, compared to $170 million net loss in the prior-year quarter.
The result for this year’s quarter includes the impact of certain items not typically represented in analysts’ earnings estimates and that would otherwise affect comparability of results. The adjusted net loss was $145 million.
The company’s total revenues decreased for the quarter and amounted to $1.059 billion compared to $1.103 billion in the same period last year.
Total company production from continuing operations increased 6% sequentially to 349,000 net boed, excluding 11,000 net boed from Libya; oil grew 7% excluding Libya.
Marathon ended the quarter with $2.6 billion of cash on the balance sheet, up from the previous quarter.
“With outstanding operational results across all our assets in the second quarter, we delivered on our commitment to resume sequential growth with total company production, excluding Libya, and the U.S. resource plays increasing 6 percent,” said Marathon Oil President and CEO Lee Tillman.
Tillman further said: “As a result, we’re increasing our full-year total company oil and boe production growth guidance of 6 percent at the midpoint, adjusted for divestitures, to 7 percent, as well as increasing our 20 to 25 percent exit rate growth in the U.S. resource plays to 23 to 27 percent growth, all within a 10 percent lower capital budget.”
Marathon’s U.S. E&P production available for sale averaged 222,000 net barrels of oil equivalent per day (boed) for second quarter 2017, up 7 percent compared to 208,000 net boed in the prior quarter and up 9 percent from the year-ago quarter, adjusted for dispositions. Second quarter unit production costs were $5.86 per barrel of oil equivalent (boe).
International E&P production available for sale, excluding Libya, averaged 127,000 net boed for second quarter 2017, up 4 percent compared to 122,000 net boed in the prior quarter, and up 6 percent over the year-ago quarter. Second quarter 2017 unit production costs (excluding Libya) were $4.03 per boe.
Marathon Oil expects third quarter 2017 U.S. E&P production available for sale to average 230,000 to 240,000 net boed.
Third quarter International E&P production available for sale, excluding Libya, is expected to be within a range of 115,000 to 125,000 net boed including scheduled turnarounds in the U.K.
When it comes to its 2017 capital program, Marathon Oil expects it to be in the range of $2.1 to $2.2 billion, down from $2.4 billion.
The company raised its full-year 2017 production available for sale forecast from the combined U.S. and International E&P segments, excluding Libya, to a range of 345,000 to 360,000 net boed, an increase to 7 percent at the midpoint on a divestiture-adjusted basis.
U.S. resource plays are expected to exit the year with both oil and boe production 23 to 27 percent higher than fourth quarter 2016, up from the previous estimate of 20 to 25 percent growth.