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Marathon Oil Production: Shaky for the Past 3 Years

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Marathon Oil’s production pattern

In the previous part of this series, we looked at Pioneer Natural Resources’ (PXD) production and reserves trends. Now we’ll review Marathon Oil Corporation’s (MRO) production pattern.

In 1Q15, Marathon Oil’s (MRO) total production decreased 3.2% from 4Q14 to ~41 million barrels of oil equivalent (or MMBoe). In comparison, Cenovus Energy (CVE) saw a 37% increase in 1Q15 production over 4Q14. Continental Resources’ (CLR) 1Q15 production increased 4.6% from the previous quarter.

Marathon Oil (MRO) is an independent US energy company. It also explores and produces energy in Canada and Equatorial Guinea. Marathon Oil is 1.3% of the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) and 1.4% of the Energy Select Sector SPDR ETF (XLE).

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Production may fall in 2015

Marathon Oil’s crude oil and natural gas production, volatile as it was, took a downward swing over the past 13 quarters. This was led by the dip in Marathon Oil’s international production, primarily in Libya, where crude oil production decreased 70% in 2014 over the previous year. From 1Q12 to 1Q15, total production increased 6%, from 38.8 MMBoe to 41.3 MMBoe.

In 1Q15, Marathon increased its activities in major US shales. Sales volumes in the Eagle Ford, Bakken, and Oklahoma Resource Basins increased over the previous year. Sales volumes in its international operations decreased during the same period.

In full year 2015, excluding production in Libya, Marathon Oil expects production to fall marginally by ~4% to ~385 thousand barrels of oil equivalent per day (or MBOED) from 399 MBOED in 1Q15.

Crude oil production wanes, natural gas production falls

As noted in the above graph, the trend shows that crude oil’s share in Marathon Oil’s (MRO) total production initially increased until 1Q13 and then fell off. Overall, crude oil’s share decreased from 62% in 1Q12 to 60% in 1Q15. During the same period, the share of natural gas in its production decreased from 34% to 29% during the same period.

In 2014, Marathon Oil primarily increased production in unconventional resources shales in the United States. This was offset by decreased international production.

In the next part, we’ll look at Marathon Oil’s (MRO) reserves.

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