Marathon 4Q Net Loss Mounts to $1.73bn

Marathon Oil late February 15 reported a full year 2016 loss of $2.14bn, little changed from its 2015 loss of $2.2bn. Adjusted net 2016 loss was $693mn.

"Despite challenging market conditions throughout 2016, we executed on our objectives of living within our means inclusive of non-core asset sales while lowering costs,” said CEO Lee Tillman. Marathon's net 4Q2016 loss of $1.37bn was 73% higher year on year; on an adjusted basis it was $83mn. 

Production costs were reduced by 33% in North America and by 15% internationally (excluding Libya) in full year 2016 compared with the prior year; 2016 production averaged 393,000 net barrels of oil equivalent/day, reflecting a return to production in Libya (342,000 boe/d excluding Libya). 

The 393,000 boe/d full year figure split out as 223,000 boe/d in North America – 171,000 b/d liquids and 314mn ft³/d – and 122,000 boe/d internationally, of which 46,000 b/d and 453mn ft³/d gas. The latter split into 425mn ft3/d in Equatorial Guinea and 28mn ft³/d in the UK.

Gas sold in Equatorial Guinea continued to be sold at $0.24/’000 ft³ as feedstock for the Atlantic Methanol plant there in which Marathon is a co-partner, as were NGLs there at $1/b, or into the 3.7mn mt/yr Equatorial Guinea LNG plant – in which Marathon's share is 60%. Most of EGLNG's output is sold under long-term contract to Shell.

Marathon completed the West African country's Alba B3 gas compression project last year, extending plateau production and field life.

Marathon’s average realised gas prices per ‘000ft³ were $2.38 for US gas, $4.80 for UK gas and $41.7/b for international crude/condensate.

Average net production for 4Q 2016 only was 396,000 boe/d, down from a year before figure of 432,000 boe/d.

Mark Smedley