On August 7, 2024, Marathon Oil Corp (MRO, Financial) released its 8-K filing for the second quarter of 2024. Marathon Oil Corp, an independent exploration and production company focusing on unconventional resources in the United States, reported net income of $349 million or $0.62 per diluted share. Adjusted net income was $357 million or $0.63 per diluted share, falling short of the analyst estimate of $0.77 per share. However, the company fell short of revenue expectations with $1,707 million, missing the estimated $1,770.68 million.
Company Overview
Marathon Oil Corp (MRO, Financial) is primarily engaged in the exploration and production of oil and gas, focusing on unconventional resources in the United States. At the end of 2023, the company reported net proved reserves of 1.1 billion barrels of oil equivalent, with net production averaging 405 thousand barrels of oil equivalent per day, comprising approximately 70% oil and NGLs and 30% natural gas.
Performance and Challenges
Marathon Oil Corp's performance in Q2 2024 was mixed. While the company reported a solid revenue figure, its earnings per share fell short of analyst expectations. This discrepancy can be attributed to various factors, including higher production costs and increased general and administrative expenses. The company's net operating cash flow was robust at $1,088 million, or $1,028 million before changes in working capital.
Financial Achievements
Despite the earnings miss, Marathon Oil Corp achieved several financial milestones. The company returned $294 million to shareholders, including $231 million in share repurchases and a $63 million base dividend. Additionally, Marathon Oil reduced its gross debt by approximately $130 million, bringing the quarter-end gross debt total to $5.3 billion. These achievements are crucial for maintaining financial stability and enhancing shareholder value in the volatile oil and gas industry.
Key Financial Metrics
| Metric | Q2 2024 | Q1 2024 | Q2 2023 |
|---|---|---|---|
| Revenue | $1,707 million | $1,551 million | $1,513 million |
| Net Income | $349 million | $297 million | $287 million |
| Adjusted Net Income | $357 million | $317 million | $295 million |
| EPS | $0.62 | $0.52 | $0.47 |
| Adjusted EPS | $0.63 | $0.55 | $0.48 |
Operational Highlights
In the United States, Marathon Oil's production averaged 351,000 net barrels of oil equivalent per day (boed) during Q2 2024, with oil production averaging 183,000 net barrels of oil per day (bopd). The company brought a total of 99 gross company-operated wells to sales, exceeding the guidance range of 85 to 90 wells due to continued drilling and completion efficiency gains.
International Operations
Internationally, Marathon Oil's production averaged 42,000 net boed, including 8,000 net bopd. The company optimized its operations by diverting a portion of its Alba gas from AMPCO methanol sales to higher-margin LNG sales, achieving a realized price of $8.52 per mcf during the quarter. The total international segment income was $79 million, including $26 million from equity method investees.
Guidance and Future Outlook
Marathon Oil's annual guidance for total company oil production, oil-equivalent production, and capital expenditures remains unchanged. The company expects oil production to peak during the third quarter, with capital expenditures declining sequentially in the third and fourth quarters.
For more detailed information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Marathon Oil Corp for further details.
