Marathon Oil Earnings Beat Expectations with Higher Production and Lower Costs

Houston oil producer and shale exploration company Marathon Oil reported better than expected first quarter earnings after the close Wednesday. MRO reported adjusted earnings of $420 million or $0.67 per share for the period. Ahead of analysts $0.60 per share expectations. The company’s revenue for the quarter fell 4.0% to $1.68 billion from $1.75 billion last year.

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Marathon Oil Corporation NYSE: $MRO

Marathon Oil Q1 23 Earnings:


  • The company’s earnings came in at $417 million, or $0.66 per share. This compares with $1304 million, or $1.78 per share, in last year’s first quarter.
  • Adj EPS: $0.67 (exp $0.60)
  • Revenue: $1.68B (exp $1.66B), from $1.75 billion last year.
  • Net operating cash flow $865 million or $942 million before changes in working capital (adjusted CFO).
  • Free cash flow $333 million or $309 million before changes in working capital and including Equatorial Guinea (E.G.) distributions and other financing (adjusted FCF).
  • Oil Production: 186M BPD, +11% Y/Y
  • First quarter return of capital totaled $397 million, including $334 million of share repurchases and the $63 million base dividend.



  • U.S. production averaged 341,000 net boed for first quarter 2023.
  • Oil production averaged 176,000 net bopd.
  • U.S. unit production costs averaged $5.82 per boe during first quarter.
  • Eagle Ford production averaged 144,000 net boed, including 75,000 net bopd of oil, with 36 gross Company-operated wells to sales.
  • Bakken production averaged 95,000 net boed, including 63,000 net bopd, with 17 gross Company-operated wells to sales.
  • Oklahoma, production averaged 54,000 net boed, including 12,000 net bopd.
  • Permian production averaged 45,000 net boed, including 25,000 net bopd, with eight gross Company-operated wells to sales.

Equatorial Guinea

  • E.G. production averaged 55,000 net boed for first quarter 2023, including 10,000 net bopd.
  • Unit production costs averaged $4.54 per boe.
  • Net income from equity method investees totaled $80 million.
  • The planned turnaround is expected to reduce second quarter E.G. production by approximately 12,000 boed.

Ensign Natural Resources

As previously announced, Marathon Oil closed on the acquisition of the Eagle Ford assets of Ensign Natural Resources on Dec. 27, 2022. Integration of the asset has progressed ahead of schedule, with transition activities now complete.

Of the total 36 Eagle Ford wells to sales during first quarter, 14 were on the recently acquired Ensign acreage in the condensate window of Karnes and Live Oak Counties. These 14 wells have demonstrated top decile oil productivity in the Eagle Ford, as measured by average 30-day production rates.

Equatorial Guinea H.O.A.

During first quarter, Marathon Oil signed an HOA with the Republic of E.G. and Noble Energy E.G. Ltd, a Chevron company, to progress the development of the E.G. Regional Gas Mega Hub (GMH).

The HOA aligns all critical parties on necessary commercial principles to advance the next phases (II and III) of the GMH, which is expected to further leverage and extend the life of E.G.’s world-class gas monetization infrastructure, including the E.G. LNG facility, into the next decade.

  • Phase II is anticipated to process Alba Unit (MRO 64% interest) gas, from Jan. 1, 2024, under new contractual terms following the expiration of the legacy Henry Hub-linked Alba sales and purchase agreement at the end of this year. Phase II is expected to materially increase Marathon Oil’s exposure to global LNG pricing and drive significant improvement to E.G. earnings and cash flow.
  • Phase III of the GMH is expected to facilitate gas processing from the Aseng Field at Punta Europa facilities. Beyond Phase III, a recently established bilateral agreement on cross-border oil and gas development between E.G. and Cameroon is expected to provide other opportunities to further expand the GMH through fast-track monetization of cross-border wet gas fields.

CASH FLOW AND CAPEX: Net cash provided by operations was $865 million during first quarter or $942 million before changes in working capital.

First quarter cash additions to property, plant and equipment totaled $532 million, while capital expenditures (accrued) totaled $601 million, consistent with the Company’s previously provided guidance for approximately 60% of 2023 capital expenditures to be concentrated in the first half of the year.

BALANCE SHEET AND LIQUIDITY: Marathon Oil ended first quarter with $178 million in cash and cash equivalents. The Company redeemed $70 million of 8.5% Senior Notes during first quarter on the maturity date. At quarter end, Marathon Oil had $2.1 billion of available borrowing capacity on its revolving credit facility that matures in 2027. On April 3, 2023, the Company closed a $200 million remarketing of tax-exempt bonds at an interest rate of 4.05% that matures July 1, 2026.


Marathon Oil’s originally provided 2023 production guidance remains unchanged, as does the Company’s 2023 capital spending guidance range of $1.9 to $2.0 billion, with approximately 60% of 2023 capital spending weighted to the first half of the year.

About Marathon Oil

Marathon Oil (NYSE: MRO) is an independent oil and gas exploration and production (E&P) company focused on four of the most competitive resource plays in the U.S. – Eagle Ford, Texas; Bakken, North Dakota; STACK and SCOOP in Oklahoma and Permian in New Mexico and Texas, complemented by a world-class integrated gas business in Equatorial Guinea. The Company’s Framework for Success is founded in a strong balance sheet, ESG excellence and the competitive advantages of a high-quality multi-basin portfolio.

Source: Marathon

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