Marathon tightens net loss, sees production fall despite Alba B3 boost

American oil and gas E&P company Marathon Oil narrowed its net loss for the third quarter 2016 and saw a decrease in total production year-over-year despite a 12 pct increase in international oil production boosted by Alba B3 project off Equatorial Guinea. 

The company reported a third quarter 2016 net loss of $192 million as opposed to the net loss of $749 in the corresponding quarter last year. The net loss includes the impact of certain items not typically represented in analysts’ earnings estimates and that would otherwise affect comparability of results, Marathon said. The adjusted net loss for the quarter was $97 million.

Further, Marathon’s revenues in third quarter 2016 decreased totaling $1.23 billion compared to a year-ago revenues of $1.32 billion. The company’s 2016 capital program remains at $1.3 billion including planned 50% increase in rig activity by year end.

Marathon Oil President and CEO, Lee Tillman, said: “We’re increasing our rig count by 50 percent in the fourth quarter while remaining within our existing $1.3 billion capital program. This acceleration will have us well positioned to resume sequential production growth in the resource plays by the second half of 2017.”

Third quarter total company production averaged 402,000 net boed, above the top end of guidance and up 5% sequentially but down compared to a year-ago production of 434,000 net boed. Production costs reduced sequentially more than 10% for North America E&P and nearly 20% for International E&P, excluding Libya.

The company’s international E&P production available for sale, excluding Libya, averaged 128,000 net boed for third quarter 2016, an increase of 7 percent compared to the prior quarter and up 12 percent compared to the year-ago quarter. Third quarter 2016 production benefited from the Alba B3 compression project in Equatorial Guinea, which came online in early July.

Equatorial Guinea production available for sale averaged 110,000 net boed in third quarter 2016 compared to 102,000 net boed in the previous quarter and 99,000 net boed in the year-ago quarter. U.K. production available for sale averaged 18,000 net boed in third quarter 2016, flat compared to the previous quarter and up compared to 15,000 net boed in the year-ago quarter.

The company is raising the low end of its full-year 2016 E&P production guidance range, resulting in a new range of 335,000 to 345,000 net boed.

Offshore Energy Today Staff