Marathon Oil Corporation has reported net income of $287 million for the third quarter of 2024, equating to $0.51 per diluted share. This figure includes items that are not typically part of analysts’ earnings estimates and affect result comparability. Adjusted net income stood at $360 million, or $0.64 per diluted share. The company recorded net operating cash flow of $1,209 million, or $1,042 million before adjustments for changes in working capital (adjusted CFO).
Key Highlights for Q3 2024:
- Generated $659 million in free cash flow (FCF) and $589 million in adjusted FCF, which included contributions from Equatorial Guinea (E.G.) distributions and other financing.
- Increased third-quarter production to 207,000 net barrels of oil per day (bopd) and 421,000 net barrels of oil equivalent per day (boed), exceeding the company’s guidance of approximately 200,000 net bopd due to strong well productivity and improved drilling and completion efficiencies.
- Upgraded full-year 2024 production guidance to 192,000 net bopd and 393,000 net boed from previous midpoints of 190,000 net bopd and 390,000 net boed, respectively, while maintaining the original capital spending guidance range.
- Returned $61 million to shareholders during the third quarter through the base dividend.
- Reduced gross debt by $545 million and increased cash and cash equivalents by $57 million, reaching a quarter-end balance of $134 million.
Detailed Financial Overview: Marathon Oil reported $1,209 million in net cash from operations during the third quarter, or $1,042 million when excluding changes in working capital. Capital expenditures for the quarter totaled $458 million. Shareholder returns consisted of the $61 million base dividend, with the company having suspended its share repurchase program following the announcement of its planned merger with ConocoPhillips. The merger agreement restricts Marathon Oil from increasing its quarterly dividend beyond the current $0.11 per share.
The company achieved a sequential gross debt reduction of $545 million and improved its liquidity position, increasing cash and cash equivalents to $134 million by the end of the third quarter.
Operational Insights for Q3 2024: In the United States, Marathon Oil’s production averaged 379,000 net boed during the quarter, with oil production reaching 198,000 net bopd—up from 183,000 net bopd in the second quarter. The company brought 72 gross Company-operated wells to sales during the period, excluding joint ventures. U.S. unit production cost averaged $5.97 per boe.
Production Breakdown by Asset:
- Eagle Ford: 87,000 bopd, 166,000 boed, 34 wells to sales
- Bakken: 72,000 bopd, 116,000 boed, 27 wells to sales
- Permian: 31,000 bopd, 56,000 boed, 9 wells to sales
- Oklahoma: 7,000 bopd, 40,000 boed, 2 wells to sales
Internationally, E.G. operations produced an average of 42,000 net boed during the third quarter, with sales volumes averaging 37,000 net boed. The Alba LNG sales achieved a realised price of $10.76 per mcf, supported by the global LNG market’s pricing uplift. E.G. unit production costs averaged $4.16 per boe, contributing to a total segment income of $95 million, including $39 million from equity method investees. Equity method companies provided $29 million in cash distributions for the quarter.
2024 Outlook and Guidance: Marathon Oil has raised its full-year 2024 oil production guidance to 192,000 net bopd and 393,000 net boed, a revision from previous midpoints. The company anticipates fourth-quarter oil production to moderate to approximately 190,000 net bopd, aligning with the timing of its capital program. This anticipated reduction in capital spending is projected to support a sequential increase in free cash flow generation on a price-normalised basis in the fourth quarter.
For more information visit www.marathonoil.com
