Leading integrated oil and gas firm
Marathon Oil Corporation
) reported weak first quarter profits, given the rise in
exploration costs. The company announced earnings (excluding
special items) of 51 cents per share, far below the Zacks
Consensus Estimate of 71 cents and the first quarter 2012 level
of 67 cents.
Revenues at $4,106.0 million were up 1.6% year over year due to
robust volumes from key resource plays. However, it was below the
Zacks Consensus Estimate of $4,259.0 million
North America Exploration and Production (E&P):
Loss from the segment totaled $59.0 million during the quarter
compared to a profit of $104.0 million in the previous-year
period. This was mainly on account of increased exploration
costs, which skyrocketed 310.4% to $435.0 million. Lower crude
oil realization was also responsible for the loss.
Income from the segment was up 11.3% year over year, from $407.0
million to $453.0 million, buoyed by stronger oil price
realizations from United Kingdom.
Marathon Oil reported production (available for sale) of 471,000
oil-equivalent barrels per day (BOE/d) from all segments,
reflecting a 15.2% increase from 409,000 BOE/d achieved in the
first quarter of 2012. This primarily reflects improved output in
Marathon's U.S. resource plays.
Oil Sands Mining:
Synthetic crude oil sales volumes in the oil sands business
improved 15.9% year over year to 51,000 barrels per day. This was
aided by high bitumen production rate from the Jack Pine and
Muskeg River mines. As a result, Marathon's Oil Sands Mining
segment recorded a profit of $38.0 million remaining flat year
During the quarter, Marathon Oil spent $1,270.0 million on
capital programs (94.1% on E&P).
Marathon Oil expects full year volumes to be between 405,000 and
Marathon Oil currently retains a Zacks Rank #3 (Hold), implying
that it is expected to perform in line with the broader U.S.
equity market over the next one to three months.
Meanwhile, there are other energy firms that are expected to
perform well in the coming 1 to 3 months. These include
EPL Oil & Gas Inc.
) with a Zacks Rank #1 (Strong Buy), and
McMoRan Exploration Co.
Stone Energy Corporation
) with a Zacks Rank #2 (Buy).
EPL OIL&GAS INC (EPL): Free Stock Analysis
MCMORAN EXPLOR (MMR): Free Stock Analysis
MARATHON OIL CP (MRO): Free Stock Analysis
STONE ENERGY CP (SGY): Free Stock Analysis
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