Marathon Oil First-quarter Loss Widens
Marathon Oil Corp posted a lower-than-expected first-quarter loss on Wednesday as cost cuts failed to offset low crude prices. The company had a net loss of $407 million, or 56 cents per share, compared with $276 million, or 41 cents per share, in the year-ago period. Excluding one-time items, Marathon lost 43 cents per share. By that measure, analysts expected a loss of 46 cents per share, according to Thomson Reuters I/B/E/S. Production fell 14 percent to 388,000 barrels of oil equivalent per day (boe/d). Marathon cut its production costs 26 percent during the quarter, but the drop was not enough to offset the plunge in oil prices.
U.S. Shale Giants Bearish on 2016
Some of the largest U.S. shale oil producers have already begun slashing 2016 budgets, with some planning double-digit reductions starting next January, the latest sign low crude prices are forcing a radical adjustment in the industry. A rash of bleak commentaries from CEOs this week marks one of the earliest times in a calendar year that oil producers have laid out rough sketches for the following year's spending. Gone, for now at least, are the high-rolling ways of an industry that as recently as last year was flush with cash. Here to stay, it seems, is constant belt-tightening, though executives still think they will be able to pump more oil.
Marathon Oil Plans to Cut 2016 Budget by $600 million
Marathon Oil Corp said on Wednesday it will slash its capital budget next year by at least $600 million, becoming one of the first U.S. shale companies to announce 2016 cuts due to low crude prices. The company, which operates in North Dakota, Texas and Oklahoma, plans to spend about $3.3 billion for 2015, and has begun identifying cuts for next year, with at least $600 million and likely more coming, Chief Executive Lee Tillman said at the Barclays Energy Power Conference. (Reporting by Ernest Scheyder)
Marathon Oil Pushing Costs Down, Saved $225 million
Marathon Oil Corp said on Thursday it has already captured $225 million in savings, citing streamlined shale drilling processes and lower prices from oilfield service providers. "With margins compressed by lower commodity prices it's incumbent upon us to be aggressive in pushing those service costs and tangible costs down," Lance Robertson, vice president for North American Operations told investors on a conference call. The company is also in the midst of eliminating 350 to 400 positions in response to the collapse in crude oil prices, said Chief Executive Officer Lee Tillman. Reporting by Anna Driver
Marathon Oil Exploring Ways to Export Condensate
U.S. oil and gas company Marathon Oil Corp is pursuing all ways to export the condensate it produces in places including the Eagle Ford in South Texas, Chief Executive Lee Tillman said on Tuesday. "We are pursuing every avenue available to us to take advantage of the current regulatory environment to ensure we have the optionality to get our barrels, particularly condensate, out in the markets," Tillman said on a conference call with investors. The executive stopped short of saying that Marathon Oil had sought approval from the U.S. Department of Commerce to export the very light form of crude oil with minimal processing.
North Dakota Flaring Crackdown Could Slow Production
North Dakota is cracking down on flaring, the wasteful burning of natural gas, with strict rules that may stymie development in areas far from pipelines in a state that is one of the fastest-growing U.S. oil fields. The new rules also will effectively reinforce the competitive advantage enjoyed by producers that have already taken steps to curb flaring. The state's Industrial Commission, a three-member regulator chaired by Governor Jack Dalrymple, changed its policy on June 1 to require energy companies to submit a plan to capture any natural gas that could be released by a new well when filing for permits.
