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Houston, Texas oil producer and shale exploration company Marathon Oil reported better than third quarter earnings after the close Wednesday.  $MRO guided production higher.

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Marathon Oil Corp (NYSE: $MRO) Report Earnings After Close Wednesday

$0.24 Beat Exp $0.20 EPS and $1.54 billion Beat $1.48 billion forecast in revenue 

Earnings

Marathon Oil Corporation reported third -quarter earnings of $0.24 per share, beating the consensus for $0.20 EPS and revenue fo $1.54 billion beating the consensus estimate of $1.48 billion.  MRO delivered a loss of 8 cents per share the year-ago quarter. Investors will be looking for an improvement from Q2 where the company delivered weaker-than expected earnings on high operating expenses.  

Marathon Oil Corporation NYSE: $MRO

Market Reaction After hours 18.75 +0.24 (1.30%)

Highlights

"Another quarter of outstanding operational execution and capital efficiency across our multi-basin U.S. portfolio has again delivered production out-performance and enabled us to raise annual resource play production guidance for the third consecutive quarter, with no increase to our development capital budget. Each of our asset teams contributed to this strong outcome, highlighted by basin leading results and continued core extension in the Eagle Ford and Bakken, the successful transition to primarily multi-well pad development drilling in Oklahoma, and the progression of important multi-well tests alongside strategic advancements in the Northern Delaware," said Marathon Oil president and CEO Lee Tillman. "

  • Third consecutive quarter on unchanged development capital budget FCF Generation & Enhanced Return of Cash to Shareholders
  • ~$320MM of 3Q18 organic free cash flow, bringing year-to-date organic free cash flow to over $630MM
  • $500MM of year-to-date share repurchases with $1.0B of remaining authorization
  • Differentiated Multi-Basin Execution • 3Q18 Total Company and U.S. Resource Play production above high end of guidance; development capex down 8% sequentially
  • Eagle Ford: production +8% q/q; continued strong well results from expanded Atascosa core
  • Bakken: oil +5% q/q; successful core extension with Southern Hector Lars pad; three new record Three Forks wells in West Myrmidon, including Jerome well IP 30 of 6,380 boed (75% oil)
  • Oklahoma: enhanced predictability and strong performance from two STACK overpressured multi-well infill pads 
  • Northern Delaware: three well Upper Wolfcamp Malaga pad achieves IP 30 rate of 540 boed per 1,000 ft latera

Marathon Basins Q3 18

Marathon Oil Corp (NYSE: $MRO) Q2 Earnings Recap

$0.15 Missed $0.21 EPS and $1.417 billion Missed $1.495 billion forecast in revenue 

Earnings

Marathon Oil Corporation second-quarter adjusted income from continuing operations of 15 cents per share, from the year-ago quarter’s loss of 24 cents but missed consensus of 21 cents, due to rise in operating cost and expenses. Revenues of $1,417 million missed the consensus of $1,495 million due to lower production from International E&P.

Marathon Oil Corporation NYSE: $MRO

Market Reaction  > After hours 20.10 −0.21 (-1.03%)

Segments

United States

  • Upstream profit of $123 million against a loss of $107 million a year ago.
  • Higher oil prices and production improved the segment’s results.
  • Production available for sale of 298,000 barrels of oil equivalent (BOE/d), up from 222,000 BOE/d in the second quarter of 2017.
  • The improvement mainly due impressive contribution from U.S. resource plays in Eagle Ford, Bakken, Oklahoma and Northern Delaware.
  • Realized liquids (crude oil and condensate) price of $66.03 per barrel, 44.1% higher than the year-earlier quarter’s level of $45.81 per barrel.
  • Natural gas liquids (NGLs) price realizations also recorded a year-over-year increase of 25.44% to stand at $22.09 a barrel.
  • Natural gas realizations decreased 28.5% year over year to $2.18 per thousand cubic feet (Mcf).

International

  • Income increased from $59 million in the prior-year quarter to $142 million in the second quarter of 2018 on higher realized liquids and NGLs.
  • Production available for sale (excluding Libya) of 121,000 BOE/d, down from 127,000 BOE/d in the second quarter of 2017.
  • The decrease in output was primarily due to a fall in natural gas production from Equatorial Guinea and United Kingdom.
  • The company realized liquids (crude oil and condensate) price of $66.12 per barrel, reflecting a 40.6% rise from the year-earlier quarter’s $47.04 per barrel.
  • Natural gas liquids realizations rose to $2.91 a barrel compared with $1.77 per barrel in the second quarter of 2017.
  • Natural gas realizations were down to 52 cents per thousand cubic feet (Mcf) from 57 cents a year ago.

Costs & Expenses 

  • Exploration expenses rose to $65 million, higher than $30 million in the year-earlier quarter.
  • Production costs rose to $205 million from $178 million in the year-ago period.
  • Shipping, handling and other operating costs surged to $126 million from $111 million in second-quarter 2017.
  • Total quarterly cost and expenses of $1,212 million for the company compared with the prior-year quarter’s $1,084 million.

Capex & Balance sheet

  • Marathon Oil’s capital expenditure was $608 million.
  • As of Jun 30, 2018, Marathon Oil had cash and cash equivalents of $1.7 billion and a $3.4 billion worth undrawn revolving credit facility.
  • At the end of the quarter, the company had long-term debt of around $5.5 billion.
  • Debt-to-capitalization ratio of the company was 31.2%.

Outlook

  • Marathon Oil expects third-quarter 2018 United States E&P output available for sale in the range of 290,000-300,000 BOE/d.
  • International E&P output is expected to remain within 105,000-115,000 BOE/d, down from the second-quarter level owing to planned maintenance in the United Kingdom and Equatorial Guinea.
  • Marathon Oil increased its full-year guidance to 400,000-415,000 BOE/d from prior expectation of 390,000-410,000 BOE/d, with capital expenditure budget remaining intact at $2.3 billion.ous position in the emerging Louisiana Austin Chalk play at a cost of less than $900 per acre

 

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Source: Marathon

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