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A Deep Look at Marathon Oil’s Operational Performance

PART:
1 2 3 4 5 6 7 8 9 10 11 12 13
Part 7
A Deep Look at Marathon Oil’s Operational Performance PART 7 OF 13

Marathon Oil’s 2Q17 Crude Oil Price Realization and WTI Crude Oil

Marathon Oil’s 2Q17 crude oil realized prices

Excluding the effect of settled hedges, MRO’s North American E&P (exploration and production) average realized crude oil price in 2Q17 was $45.81 per barrel, an increase of ~12.0% compared to $40.77 per barrel in 2Q16. Its 2Q17 crude oil realized prices were also boosted by its gains on crude oil derivatives. We’ll look at MRO’s hedges in Part 9.

Marathon Oil’s 2Q17 Crude Oil Price Realization and WTI Crude Oil

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Comparison with the benchmark

Marathon Oil’s North American E&P average realized crude oil price in 2Q17 underperformed the average WTI (West Texas Intermediate) crude oil (USO) price during the same period. MRO’s average realized crude oil price in 2Q17 is ~5.0% lower than the average WTI crude oil price of $48.15 per barrel for the same period.

Natural gas and natural gas liquids realized prices

For 2Q17, Marathon Oil’s North American E&P average realized price for natural gas production rose ~56.0% to $3.05 per thousand cubic feet compared to $1.96 per thousand cubic feet for the same period in 2016.

For 2Q17, MRO’s North American E&P average realized price for natural gas liquids production rose ~19.0% to $17.61 per barrel compared to $14.84 for the same period in 2016.

Other upstream players

Other upstream companies from the S&P 500 (SPY), including ConocoPhillips (COP), Devon Energy (DVN), and Pioneer Natural Resources (PXD), had lower realized crude oil prices in 2Q17 compared to the average WTI crude oil price during the same quarter. COP reported a negative price differential of $0.08 per barrel in 2Q17 compared to the average WTI crude oil price.

Next, let’s take a look at an interesting chart related to Marathon Oil’s realized price effectiveness in terms of production costs.

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