Oil and natural gas exploration and production (E&P) firm Marathon Oil Corp. ( MRO ) reported impressive third-quarter 2013 earnings. Robust performance by the North America E&P segment along with higher price realization of liquid hydrocarbon boosted the results.
Houston, TX-based Marathon Oil, which spun off its refining/sales business into a separate, independent and publicly traded company Marathon Petroleum Corp. ( MPC ) in 2011 - announced earnings (excluding special items) of 87 cents per share, surpassing the Zacks Consensus Estimate of 78 cents. Moreover, the company's per share adjusted profits were 35.9% higher than the third-quarter 2012 level of 64 cents.
However, revenues at $3,914.0 million were down 5.9% year over year and were also below the Zacks Consensus Estimate of $4,019.0 million. Lower production in Libya and Norway affected the results.
North America E&P: Income from Marathon Oil's North American upstream segment totaled $242.0 million during the quarter, up by a significant 126.2% from $107.0 million in the previous-year period. Increased price realization from liquid hydrocarbon along with reduced exploration costs aided the results.
International E&P: The segment's income was down 20.7% year over year from $405.0 million to $321.0 million. Decrease in output at Libya and Norway, owing to planned turnaround activities, along with increased exploration costs affected the results.
Oil Sands Mining: Price realization from Synthetic Crude Oil came in at $102.64 per barrel, up 26.5% from $81.13 per barrel in the year-ago period. As a result, Marathon Oil's Oil Sands Mining segment recorded a profit of $106.0 million, up 60.6% from an income of $66.0 million in the corresponding quarter of last year.
However, Synthetic crude oil sales volumes in the oil sands business fell 7.5% year over year from 53,000 barrels per day to 49,000 barrels per day.
During the quarter, Marathon Oil spent $1,162.0 million on capital programs (93.4% on E&P).
Marathon Oil maintained its previous guidance for 2013 output from North America E&P and International E&P business units (excluding Libya), at 410,000-425,000 oil-equivalent barrels per day. The company also retained its previous projection for oil sands volumes in the range of 40,000-44,000 barrels per day.
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.