Marathon Oil (MRO) Q4 Earnings Miss On Weak Oil Realizations
Zacks Investment Research | Feb 12, 2020 10:53PM ET
Marathon Oil Corporation (NYSE:MRO) reported fourth-quarter 2019 results wherein both earnings and revenues missed the respective Zacks Consensus Estimate. Weaker-than-expected net sales volumes caused this underperformance. Precisely, the same totalled 411 thousand barrels of oil equivalent per day (MBOE/d), falling short of the Zacks Consensus Estimate of 418 MBOE/d.
Its adjusted income from continuing operations came in at 7cents per share, lagging the Zacks Consensus Estimate of 8 cents. Moreover, the metric plunged nearly 53.3% from the year-ago earnings of 15 cents. Notably, decreased average price realizations of crude oil and condensate from the International E&P segment induced this year-over-year fall.
Quarterly revenues of $1,215 million missed the Zacks Consensus Estimate of $1,267 million. The top line was also 31.2% lower than the prior-year figure of $1,765 million.
Segmental Performance
This Texas-based energy explorer’s total net production (from U.S. and International units) in the quarter under review came in at 413,000 BOE/d compared with 411,000 BOE/d in the year-ago period.
U.S. E&P: This U.S. upstream unit earned a profit of $148 million, down 6.9% from the year-ago figure of $159 million due to weak crude oil and condensate price realizations in the United States. Production costs summed $5.13 per BOE, representing a 3.4% year-over-year decline.
However, net production available for sale of 328,000 BOE/d increased from 306,000 BOE/d in fourth-quarter 2018. The total U.S. output comprised 60% oil or 196,000 barrels per day (bpd), up 9% year over year.
The improved year-over-year production, especially from Bakken, Northern Delaware and Oklahoma aided the company’s quarterly performance. Notably, Bakken output came in at 108,000 BOE/d, mirroring a 15% rise from the year-ago level. While the Northern Delaware region recorded production of 28,000 BOE/d, up 7.7% from the level in fourth-quarter 2018. Also, output from Oklahoma was 82,000 BOE/d compared with 67,000 BOE/d in the year-ago quarter.
Marathon Oil’s average realized liquids prices (crude oil and condensate) of $54.83 per barrel were below the year-earlier level of $56.01. Moreover, natural gas liquids average price realizations tumbled 37.4% to $15.47 a barrel. Additionally, average realized natural gas prices dropped almost 36% year over year to $2.10 per thousand cubic feet.
International E&P: Income decreased from $83 million in the prior-year period to $33 million in the fourth quarter due to lower production and weak commodity price realizations.
Marathon Oil reported production available for sale of 85,000 BOE/d, down from 105,000 Boe/d in fourth-quarter 2018. Moderate output from Equatorial Guinea along with the company’s exit from U.K. business caused this downside.
Marathon Oil’s average realized liquids prices (crude oil and condensate) of $48.26 per barrel reflect a 17.15% decline from the year-earlier quarter. Natural gas and natural gas liquids’ average price realizations came in at 24 cents per thousand cubic feet and $1 a barrel, respectively. In turn, the numbers account for a 51% and 55% year-over-year fall each.
Marathon Oil Corporation Price, Consensus and EPS Surprise
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