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Marathon Oil (MRO) Posts Narrower-than-Expected Q3 Loss
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Houston, TX-basedleading upstream energy firm Marathon Oil Corp. (MRO - Free Report) posted third-quarter adjusted loss of 11 cents per share, narrower than the Zacks Consensus Estimate of a loss of 19 cents. Also, the bottom line narrowed from the year-ago adjusted loss of 20 cents. Lower total expenses led to the improvement. Contribution from Equatorial Guinea and Oklahoma Resource Basins' also supported the results. However, the positives were partially offset by lower commodity prices.
Quarterly revenues of $1,229 million beat the Zacks Consensus Estimate of $1,091 million but decreased from the prior-year quarter level of $1,323 million.
Segmental Performance
North America E&P: Marathon Oil’s North American upstream segment incurred a loss of $59 million, narrower than the loss of $61 million a year ago Contribution from Equatorial Oklahoma Resource Basins' supported the results.
Marathon Oil reported production available for sale of 216,000 oil equivalent barrels per day (BOE/d) compared with 263,000 BOE/d in the third quarter of 2015. The deterioration was mainly due to reduced contribution from Bakken and Eagle Ford resources.
The company realized liquids (crude oil, condensate and natural gas liquids) price of $34.00 per barrel as against the year-earlier quarter level of $35.75 per barrel. Natural gas realizations decreased 2.9% year over year to $2.67 per thousand cubic feet (Mcf).
International E&P: The segment’s income soared 103.4% year over year to $59 million. Substantially higher sales drove the profits.
Marathon Oil – which spun off its refining/sales business into a separate, independent and publicly traded company Marathon Petroleum Corp. (MPC - Free Report) in 2011 – reported production available for sale (excluding Libya) of 128,000 BOE/d compared with the 114,000 BOE/d in the third quarter of 2015. Contribution from Equatorial Guinea led to the improvement.
The company realized liquids price of $30.40 per barrel, down 15.3% from the year-earlier quarter level of $35.88 per barrel. Moreover, natural gas realizations plunged 22% year over year to 46 cents per Mcf.
Oil Sands Mining: Marathon’s Oil Sands Mining segment recorded income of $15 million, which compared favorably with a loss of $11 million in the year-ago quarter. Record mining production helped the segment turn around in the quarter.
Synthetic crude oil sales volumes in the oil sands business was 65,000 barrels per day, flat with the prior-year quarter level.
The company’s exploration expenses for the quarter of $83 million were significantly lower than $585 million in the year-earlier quarter. However, Marathon Oil’s total quarterly cost and expenses fell 40.2% to $1,432 million.
Guidance
Marathon Oil expects fourth-quarter 2016 North America Exploration and Production (E&P) output available for sale in the range of 205,000–215,000 BOE/d, International E&P (excluding Libya) output in the range of 120,000–130,000 BOE/d and Oil Sands Mining output of 40,000–45,000 BOE/d.
Zacks Rank & Stocks to Consider
Marathon Oil currently carries a Zacks Rank #3 (Hold).
Some better-ranked players from the broader energy sector include North Atlantic Drilling Limited and Ultra Petroleum Corp. . Both these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the last four quarters, North Atlantic Drilling posted an average positive earnings surprise of 148.4%.
Ultra Petroleum, on the other hand, posted an average positive earnings surprise of 65.91% in the last four quarters.
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Marathon Oil (MRO) Posts Narrower-than-Expected Q3 Loss
Houston, TX-basedleading upstream energy firm Marathon Oil Corp. (MRO - Free Report) posted third-quarter adjusted loss of 11 cents per share, narrower than the Zacks Consensus Estimate of a loss of 19 cents. Also, the bottom line narrowed from the year-ago adjusted loss of 20 cents. Lower total expenses led to the improvement. Contribution from Equatorial Guinea and Oklahoma Resource Basins' also supported the results. However, the positives were partially offset by lower commodity prices.
Quarterly revenues of $1,229 million beat the Zacks Consensus Estimate of $1,091 million but decreased from the prior-year quarter level of $1,323 million.
Segmental Performance
North America E&P: Marathon Oil’s North American upstream segment incurred a loss of $59 million, narrower than the loss of $61 million a year ago Contribution from Equatorial Oklahoma Resource Basins' supported the results.
Marathon Oil reported production available for sale of 216,000 oil equivalent barrels per day (BOE/d) compared with 263,000 BOE/d in the third quarter of 2015. The deterioration was mainly due to reduced contribution from Bakken and Eagle Ford resources.
The company realized liquids (crude oil, condensate and natural gas liquids) price of $34.00 per barrel as against the year-earlier quarter level of $35.75 per barrel. Natural gas realizations decreased 2.9% year over year to $2.67 per thousand cubic feet (Mcf).
International E&P: The segment’s income soared 103.4% year over year to $59 million. Substantially higher sales drove the profits.
Marathon Oil – which spun off its refining/sales business into a separate, independent and publicly traded company Marathon Petroleum Corp. (MPC - Free Report) in 2011 – reported production available for sale (excluding Libya) of 128,000 BOE/d compared with the 114,000 BOE/d in the third quarter of 2015. Contribution from Equatorial Guinea led to the improvement.
The company realized liquids price of $30.40 per barrel, down 15.3% from the year-earlier quarter level of $35.88 per barrel. Moreover, natural gas realizations plunged 22% year over year to 46 cents per Mcf.
Oil Sands Mining: Marathon’s Oil Sands Mining segment recorded income of $15 million, which compared favorably with a loss of $11 million in the year-ago quarter. Record mining production helped the segment turn around in the quarter.
Synthetic crude oil sales volumes in the oil sands business was 65,000 barrels per day, flat with the prior-year quarter level.
Costs & Expenses
MARATHON OIL CP Price, Consensus and EPS Surprise
MARATHON OIL CP Price, Consensus and EPS Surprise | MARATHON OIL CP Quote
The company’s exploration expenses for the quarter of $83 million were significantly lower than $585 million in the year-earlier quarter. However, Marathon Oil’s total quarterly cost and expenses fell 40.2% to $1,432 million.
Guidance
Marathon Oil expects fourth-quarter 2016 North America Exploration and Production (E&P) output available for sale in the range of 205,000–215,000 BOE/d, International E&P (excluding Libya) output in the range of 120,000–130,000 BOE/d and Oil Sands Mining output of 40,000–45,000 BOE/d.
Zacks Rank & Stocks to Consider
Marathon Oil currently carries a Zacks Rank #3 (Hold).
Some better-ranked players from the broader energy sector include North Atlantic Drilling Limited and Ultra Petroleum Corp. . Both these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the last four quarters, North Atlantic Drilling posted an average positive earnings surprise of 148.4%.
Ultra Petroleum, on the other hand, posted an average positive earnings surprise of 65.91% in the last four quarters.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand.Click to see them now>>