Marathon Oil Corp. reported $417 million in net income on Wednesday, both sequentially and year-over-year as energy prices fell.
It produced 396,000 barrels of oil equivalent per day (boed), up from 333,000 boed in the previous quarter and 345,000 in the first quarter of 2022. But oil production rose in both benchmark quarters to 186,000 bpd in January-March 2023.
However, as prices fell after a surge last year attributed to the war between Russia and Ukraine, Marathon Oil’s earnings in the first quarter of 2023 weakened from $1.304 billion in the corresponding period of 2022 and $525 million between October and December 2022.
In the US, it sold oil and condensates at $74.69 a barrel, down from $94.43 in January-March 2022. Its natural gas liquids (NGLs) sold at $24.27 a barrel, for down from $37.31 compared to a year ago. Marathon Oil sold natural gas at $2.95 per thousand cubic feet between January and March 2023, nearly half of the $4.79 it made in the first quarter of 2022.
Marathon Oil’s realized prices on its international market saw a softer decline in crude oil and condensate, to $58.57 a barrel from $59.63 in January-March 2022. NGLs and gas naturally they stagnated.
Marathon Oil’s profits were consistent with those of oil majors in the first quarter of the year, with Chevron Corp. ($6.574 billion), ExxonMobil Corp. ($11.43 billion) and TotalEnergies SE ($5.6 billion) saw earnings rise despite lower commodity prices.
With a profit of $0.66 per diluted share in the first quarter, Marathon Oil said it is on track to meet this year’s goal of a minimum 40% return on cash flow from operating activities to equity investors.
“Since significantly increasing the return of capital to equity investors in the fourth quarter of 2021 under its current capital return framework, Marathon Oil has returned $4.3 billion to shareholders, including $3.9 billion in share repurchases which have reduced the outstanding share count by 22%, contributing to significant growth in all metrics per share,” he said.
Marathon Oil traded lower on Wednesday despite beating the Zacks Consensus Estimate of $0.57 per share. It closed down 2.07 percent at $22.27 on the New York Stock Exchange.
It made no changes to its production and earnings forecast for the year.
“The 2023 program is expected to provide $2.6 billion of adjusted FCF [free cash flow] at a reinvestment rate of approximately 40%, assuming $80/bbl WTI [West Texas Intermediate]$3.00/MMBtu [million British thermal units] Henry Hub and $20/MMBtu TTF [Title Transfer Facility]Marathon Oil said in its guidance report issued on February 15.
“Marathon Oil expects to deliver total company oil production at maintenance levels of 190,000 net bopd [barrels of oil per day] at the midpoint of its 2023 guidance range. The company’s total oil equivalent production is expected to be 395,000 net boed at the midpoint of guidance, including downtime associated with an EG change planned for the second quarter.”
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