Marathon Oil slips on impairments
Marathon Oil, a U.S.-based oil and gas exploration and production company, has posted a loss in the 3Q 2015 due to low oil price and changes in company’s exploration strategy.
The Houston-headquartered company on Wednesday reported a third quarter 2015 net loss of $749 million, compared to a net profit of $431 million in the third quarter 2014.
According to Marathon’s report, its revenues were down to $1.32 billion in the third quarter, compared to $2.97 billion in the corresponding period of 2014.
Third quarter 2015 included $611 million ($949 million pre-tax) of non-cash charges comprised largely of losses and asset impairments resulting from lower forecasted commodity prices and changes in the company’s conventional exploration strategy.
Marathon Oil President and CEO Lee M. Tillman said: “This quarter’s results were impacted by non-cash losses and impairments related to lower forecasted commodity prices and our continued strategic transition away from conventional exploration.”
The company’s third quarter 2015 capital, investment and exploration program was down 7% from the second quarter, at approximately $623 million; full-year 2015 program at $3.1 billion.
Total company net production from continuing operations (excluding Libya) averaged 434,000 net boed, up 6% over the year-ago quarter with OSM achieving record production of 57,000 net boed.
Marathon Oil reduced E&P production expenses and its total costs by $136 million for the third quarter 2015, compared to the same quarter in 2014. These savings represent an overall reduction of 28 percent.
Tillman added: “Last week we announced a reduced quarterly dividend, which is expected to increase annual free cash flow by more than $425 million, and we lowered our 2015 capital, investment, and exploration program to $3.1 billion.”
Marathon CEO said: “Based on our current outlook and preliminary plan discussions, we would anticipate a total company 2016 program of up to $2.2 billion, subject to Board approval, which would give us the flexibility to deliver 2016 annual average production in the U.S. resource plays flat to 2015 exit rate.”
Offshore Energy Today Staff