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Marathon Oil (MRO) Posts Narrower-than-Expected Q2 Loss
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Houston, TX-based Marathon Oil Corp. (MRO - Free Report) – a leading upstream energy firm – posted second-quarter adjusted loss of 23 cents per share, narrower than the Zacks Consensus Estimate of a loss of 24 cents. The bottom line remained unchanged year over year. Lower total expenses led to the improvement. Contribution from Equatorial Guinea along with the restart of output from Brae Alpha in the U.K. also supported the results. The positives were offset partially by lower commodity prices and temporary production shutdown during the Canadian wild fire.
Quarterly revenues of $1,302 million beat the Zacks Consensus Estimate of $1,187 million but fell from the prior-year quarter level of $1,531 million.
Segmental Performance
North America E&P: Marathon Oil’s North American upstream segment reported a loss of $70 million, wider than the loss of $45 million a year ago. Lower commodity prices hurt the results.
Marathon Oil reported production available for sale of 224,000 oil-equivalent barrels per day (BOE/d), down from 274,000 BOE/d in the second quarter of 2015. The deterioration was mainly due to reduced contribution from Eagle Ford resources.
The company realized liquids (crude oil, condensate and natural gas liquids) price of $35.07 per barrel, significantly lower than the year-earlier quarter level of $45.96 per barrel. Natural gas realizations decreased 29% year over year to $1.96 per thousand cubic feet (Mcf).
International E&P: The segment’s income improved 34.2% year over year to $55 million. Substantially higher sales pulled up the profits.
Marathon Oil – which spun off its refining/sales business into a separate, independent and publicly traded company Marathon Petroleum Corp. (MPC) in 2011 – reported production available for sale (excluding Libya) of 120,000 BOE/d, up from the 108,000 BOE/d in the second quarter of 2015. Contribution from Equatorial Guinea along with the restart of output from Brae Alpha in the U.K. led to the improvement.
The company realized liquids price of $32.11 per barrel, reflecting a 28% drop from the year-earlier quarter level of $44.70 per barrel. Moreover, natural gas realizations fell 32% year over year to 53 cents per Mcf.
Oil Sands Mining: Marathon’s Oil Sands Mining segment recorded a loss of $38 million compared with a loss of $77 million in the year-ago quarter. Record mining production in June led to the outperformance. This was negated partially by temporary operation suspension owing to the wildfire.
Synthetic crude oil sales volumes in the oil sands business was 49,000 barrels per day, higher than the prior-year quarter level of 29,000 barrels per day.
Costs & Expenses
The company’s exploration expenses for the quarter came in at $189 million, significantly higher than $111 million in the year-earlier quarter. However, Marathon Oil’s total quarterly cost and expenses fell 22% to $1,454 million.
Guidance
Marathon Oil expects third-quarter 2016 North America E&P output available for sale in the range of 200,000–210,000 BOE/d, International E&P (excluding Libya) output in the range of 125,000–135,000 BOE/d and Oil Sands Mining output of 45,000–50,000 BOE/d.
Marathon Oil currently carries a Zacks Rank #2 (Buy). Some other energy players worth considering include North Atlantic Drilling Limited , Independence Contract Drilling Inc. (ICD - Free Report) and Antero Resources Corporation (AR - Free Report) . Each of these stocks sports a Zacks Rank #1 (Strong Buy).
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Marathon Oil (MRO) Posts Narrower-than-Expected Q2 Loss
Houston, TX-based Marathon Oil Corp. (MRO - Free Report) – a leading upstream energy firm – posted second-quarter adjusted loss of 23 cents per share, narrower than the Zacks Consensus Estimate of a loss of 24 cents. The bottom line remained unchanged year over year. Lower total expenses led to the improvement. Contribution from Equatorial Guinea along with the restart of output from Brae Alpha in the U.K. also supported the results. The positives were offset partially by lower commodity prices and temporary production shutdown during the Canadian wild fire.
Quarterly revenues of $1,302 million beat the Zacks Consensus Estimate of $1,187 million but fell from the prior-year quarter level of $1,531 million.
Segmental Performance
North America E&P: Marathon Oil’s North American upstream segment reported a loss of $70 million, wider than the loss of $45 million a year ago. Lower commodity prices hurt the results.
Marathon Oil reported production available for sale of 224,000 oil-equivalent barrels per day (BOE/d), down from 274,000 BOE/d in the second quarter of 2015. The deterioration was mainly due to reduced contribution from Eagle Ford resources.
The company realized liquids (crude oil, condensate and natural gas liquids) price of $35.07 per barrel, significantly lower than the year-earlier quarter level of $45.96 per barrel. Natural gas realizations decreased 29% year over year to $1.96 per thousand cubic feet (Mcf).
International E&P: The segment’s income improved 34.2% year over year to $55 million. Substantially higher sales pulled up the profits.
Marathon Oil – which spun off its refining/sales business into a separate, independent and publicly traded company Marathon Petroleum Corp. (MPC) in 2011 – reported production available for sale (excluding Libya) of 120,000 BOE/d, up from the 108,000 BOE/d in the second quarter of 2015. Contribution from Equatorial Guinea along with the restart of output from Brae Alpha in the U.K. led to the improvement.
The company realized liquids price of $32.11 per barrel, reflecting a 28% drop from the year-earlier quarter level of $44.70 per barrel. Moreover, natural gas realizations fell 32% year over year to 53 cents per Mcf.
Oil Sands Mining: Marathon’s Oil Sands Mining segment recorded a loss of $38 million compared with a loss of $77 million in the year-ago quarter. Record mining production in June led to the outperformance. This was negated partially by temporary operation suspension owing to the wildfire.
Synthetic crude oil sales volumes in the oil sands business was 49,000 barrels per day, higher than the prior-year quarter level of 29,000 barrels per day.
Costs & Expenses
The company’s exploration expenses for the quarter came in at $189 million, significantly higher than $111 million in the year-earlier quarter. However, Marathon Oil’s total quarterly cost and expenses fell 22% to $1,454 million.
Guidance
Marathon Oil expects third-quarter 2016 North America E&P output available for sale in the range of 200,000–210,000 BOE/d, International E&P (excluding Libya) output in the range of 125,000–135,000 BOE/d and Oil Sands Mining output of 45,000–50,000 BOE/d.
MARATHON OIL CP Price, Consensus and EPS Surprise
MARATHON OIL CP Price, Consensus and EPS Surprise | MARATHON OIL CP Quote
Zacks Rank & Stocks to Consider
Marathon Oil currently carries a Zacks Rank #2 (Buy). Some other energy players worth considering include North Atlantic Drilling Limited , Independence Contract Drilling Inc. (ICD - Free Report) and Antero Resources Corporation (AR - Free Report) . Each of these stocks sports a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>