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Marathon (MRO) Beats on Q2 Earnings, Strong Prices Favor
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Marathon Oil Corporation (MRO - Free Report) reported second-quarter 2021 adjusted net income per share of 22 cents, beating the Zacks Consensus Estimate of 18 cents. In the year-ago period, the company had incurred a loss of 60 cents.
Marathon Oil’s bottom line was favorably impacted by stronger liquids realizations and better-than-expected domestic production. Precisely, volumes in the United States came in at 283,000 barrels of oil equivalent per day (BOE/d), beating the Zacks Consensus Estimate of 272,000 BOE/d.
Marathon Oil reported revenues of $1.1 billion that jumped from the year-ago sales of $272 million but missed the Zacks Consensus Estimate by 0.4%. This was due to the lower-than-expected international segment production available for sale, which at 65,000 BOE/d fell short of the Zacks Consensus Estimate by 3,000 BOE/d.
The company stuck to its $1 billion capital spending budget for 2021 and delivered a free cash flow of $420 million during the quarter.
Marathon Oil Corporation Price, Consensus and EPS Surprise
This Texas-based energy explorer’s total net production (from U.S. and International units) in the quarter under review came in at 348,000 BOE/d compared with 390,000 BOE/d in the year-ago period.
U.S. E&P: This U.S. upstream unit reported income of $207 million against a loss of $365 million in the year-ago period due to stronger price realizations.
Marathon Oil’s average realized liquids prices (crude oil and condensate) of $64.73 per barrel were significantly above the year-earlier level of $21.65. Natural gas liquids average price realizations soared 240.9% to $24.17 a barrel. Additionally, average realized natural gas prices were up 81.3% year over year to $2.61 per thousand cubic feet.
Meanwhile, production costs were $4.41 per BOE, representing a 7.8% year-over-year rise.
Net production of 283,000 BOE/d decreased from 307,000 BOE/d in second-quarter 2020. The total U.S. output comprised 56% oil or 159,000 barrels per day (bpd), down 12.6% year over year.
The lower year-over-year production, especially from Eagle Ford and Oklahoma dragged down the company’s quarterly performance. Notably, Oklahoma output came in at 54,000 BOE/d, reflecting a 10% fall from the year-ago level. The Eagle Ford region recorded production of 91,000 BOE/d, down 15.7% from the level in second-quarter 2020. On a somewhat positive note, output from Bakken was 107,000 BOE/d compared with 103,000 BOE/d in the year-ago quarter.
International E&P: The segment, which explores and produces oil and gas in Equatorial Guinea, reported earnings of $68 million, turning around from a loss of $6 million in the year-ago period due to improvement in liquids prices.
Marathon Oil reported production available for sale of 65,000 BOE/d, down from 83,000 Boe/d in second-quarter 2020.
Marathon Oil’s average realized liquids prices (crude oil and condensate) of $52.78 per barrel reflected a 282.7% jump from the year-earlier quarter. Natural gas and natural gas liquids’ average price realizations came in at 24 cents per thousand cubic feet and $1 a barrel, respectively – same as the corresponding period of 2020.
Financials
Total costs in the quarter were $1 billion, $63 million higher than the prior-year period. Marathon Oil, which recently raised its quarterly dividend by 1 cent to 5 cents per share, reported an operating cash flow of $655 million in the second quarter compared to a mere $9 million a year ago.
As of Jun 30, it had cash and cash equivalents worth $970 million and long-term debt of 4.9 billion. Debt-to-capitalization ratio of the company was 31.4.
Marathon Oil spent $289 million in capital and exploratory expenditures during the quarter.
2021 Guidance
Marathon Oil has set $1 billion of capital budget for this year, down from $1.2 billion it spent in 2020. The company is targeting production in the range of 335,000 BOE/d to 355,000 BOE/d, up from the previous view of 330,000-350,000 BOE/d. Further, Marathon Oil expects oil volumes in the band of 169,000-175,000 barrels per day. Assuming $60 WTI, Marathon Oil expects to return a minimum of 40% of its cash flow from operations.
Zacks Rank & Stock Picks
Marathon Oil currently carries a Zacks Rank #1 (Strong Buy).
Some other top-ranked players in the energy space are Ovintiv (OVV - Free Report) , EOG Resources (EOG - Free Report) and Suncor Energy (SU - Free Report) , each presently flaunting a Zacks Rank of 1.
Ovintiv has an expected earnings growth rate of 1,177.14% for the current year.
EOG Resources has an expected earnings growth rate of 389.04% for the current year.
Suncor Energy has an expected earnings growth rate of 281.82% for the current year.
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Marathon (MRO) Beats on Q2 Earnings, Strong Prices Favor
Marathon Oil Corporation (MRO - Free Report) reported second-quarter 2021 adjusted net income per share of 22 cents, beating the Zacks Consensus Estimate of 18 cents. In the year-ago period, the company had incurred a loss of 60 cents.
Marathon Oil’s bottom line was favorably impacted by stronger liquids realizations and better-than-expected domestic production. Precisely, volumes in the United States came in at 283,000 barrels of oil equivalent per day (BOE/d), beating the Zacks Consensus Estimate of 272,000 BOE/d.
Marathon Oil reported revenues of $1.1 billion that jumped from the year-ago sales of $272 million but missed the Zacks Consensus Estimate by 0.4%. This was due to the lower-than-expected international segment production available for sale, which at 65,000 BOE/d fell short of the Zacks Consensus Estimate by 3,000 BOE/d.
The company stuck to its $1 billion capital spending budget for 2021 and delivered a free cash flow of $420 million during the quarter.
Marathon Oil Corporation Price, Consensus and EPS Surprise
Marathon Oil Corporation price-consensus-eps-surprise-chart | Marathon Oil Corporation Quote
Segmental Performance
This Texas-based energy explorer’s total net production (from U.S. and International units) in the quarter under review came in at 348,000 BOE/d compared with 390,000 BOE/d in the year-ago period.
U.S. E&P: This U.S. upstream unit reported income of $207 million against a loss of $365 million in the year-ago period due to stronger price realizations.
Marathon Oil’s average realized liquids prices (crude oil and condensate) of $64.73 per barrel were significantly above the year-earlier level of $21.65. Natural gas liquids average price realizations soared 240.9% to $24.17 a barrel. Additionally, average realized natural gas prices were up 81.3% year over year to $2.61 per thousand cubic feet.
Meanwhile, production costs were $4.41 per BOE, representing a 7.8% year-over-year rise.
Net production of 283,000 BOE/d decreased from 307,000 BOE/d in second-quarter 2020. The total U.S. output comprised 56% oil or 159,000 barrels per day (bpd), down 12.6% year over year.
The lower year-over-year production, especially from Eagle Ford and Oklahoma dragged down the company’s quarterly performance. Notably, Oklahoma output came in at 54,000 BOE/d, reflecting a 10% fall from the year-ago level. The Eagle Ford region recorded production of 91,000 BOE/d, down 15.7% from the level in second-quarter 2020. On a somewhat positive note, output from Bakken was 107,000 BOE/d compared with 103,000 BOE/d in the year-ago quarter.
International E&P: The segment, which explores and produces oil and gas in Equatorial Guinea, reported earnings of $68 million, turning around from a loss of $6 million in the year-ago period due to improvement in liquids prices.
Marathon Oil reported production available for sale of 65,000 BOE/d, down from 83,000 Boe/d in second-quarter 2020.
Marathon Oil’s average realized liquids prices (crude oil and condensate) of $52.78 per barrel reflected a 282.7% jump from the year-earlier quarter. Natural gas and natural gas liquids’ average price realizations came in at 24 cents per thousand cubic feet and $1 a barrel, respectively – same as the corresponding period of 2020.
Financials
Total costs in the quarter were $1 billion, $63 million higher than the prior-year period. Marathon Oil, which recently raised its quarterly dividend by 1 cent to 5 cents per share, reported an operating cash flow of $655 million in the second quarter compared to a mere $9 million a year ago.
As of Jun 30, it had cash and cash equivalents worth $970 million and long-term debt of 4.9 billion. Debt-to-capitalization ratio of the company was 31.4.
Marathon Oil spent $289 million in capital and exploratory expenditures during the quarter.
2021 Guidance
Marathon Oil has set $1 billion of capital budget for this year, down from $1.2 billion it spent in 2020. The company is targeting production in the range of 335,000 BOE/d to 355,000 BOE/d, up from the previous view of 330,000-350,000 BOE/d. Further, Marathon Oil expects oil volumes in the band of 169,000-175,000 barrels per day. Assuming $60 WTI, Marathon Oil expects to return a minimum of 40% of its cash flow from operations.
Zacks Rank & Stock Picks
Marathon Oil currently carries a Zacks Rank #1 (Strong Buy).
You can see the complete list of today’s Zacks #1 Rank stocks here.
Some other top-ranked players in the energy space are Ovintiv (OVV - Free Report) , EOG Resources (EOG - Free Report) and Suncor Energy (SU - Free Report) , each presently flaunting a Zacks Rank of 1.
Ovintiv has an expected earnings growth rate of 1,177.14% for the current year.
EOG Resources has an expected earnings growth rate of 389.04% for the current year.
Suncor Energy has an expected earnings growth rate of 281.82% for the current year.