Marathon Oil $MRO Maintains Production Cuts CAPEX

Oil producer and shale exploration company Marathon Oil $MRO reported mixed second quarter earnings after the close Wednesday. The stock rose after the company guided capex lower and production maintained. 

Houston, Texas oil producer and shale exploration company Marathon Oil $MRO reported mixed second quarter earnings after the close Wednesday in another busy week for U.S. shale companies. MRO reported a bigger loss on more revenue. The stock rose after the company guided capex lower and production maintained.

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. 

Earnings: Net loss of $139 million, or $0.16 per diluted share, adjusted net loss $145 million, or $0.17 per diluted share on revenue of $1.06 billion. Expectations were EPS -$0.14 and revenue $1.0 billion.

Reaction: Marathon Oil Corporation NYSE: MRO After-hours: $12.30 0.26 (2.16%)

Net operating cash flow was $422 million, or $471 million before changes in working capital. 

Production

  • U.S. resource play production grew 6% sequentially, averaging 202,000 net boed
  • Oklahoma Resource Basin production grew 11% sequentially with continued focus on leasehold, delineation and infill spacing; 6 new standard lateral wells from the high-density Hansens STACK pilot delivered average 30-day IPs of 915 boed (55% oil)
  • Eagle Ford production up sequentially with fewer wells to sales due to outstanding new well performance; top 10 wells to sales had 30-day IPs averaging 2,340 boed (69% oil)
  • First two Bakken Hector wells with enhanced completion designs achieved 30-day IPs averaging 2,500 boed (85% oil)
  • Successful first MRO-designed completion in Northern Delaware achieved 30-day IP of 1,500 boed (72% oil), pushing delineation farther west in Eddy County
  • Ended the quarter with $2.6 billion of cash on the balance sheet, up from the previous quarter

Guidance

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.

Marathon Oil expects its 2017 capital program to be in a 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.

Source: Marathon

Live From The Pit

Leave a Reply

Your email address will not be published. Required fields are marked *