Inside Marathon Oil’s Free Cash Flow Normalized to Production



Marathon Oil’s FCF normalized to production

In 2Q16, Marathon Oil’s (MRO) reported FCF (free cash flow) normalized to total production of about -$3.38 per boe (barrel of oil equivalent), which is ~$8.92 higher than in 2Q15.

Marathon Oil’s FCF normalized to total production fell steeply in 4Q14 and 1Q15. In fact, in 1Q15 Marathon Oil reported its lowest FCF normalized to total production, mainly due to lower operating cash flows, which came as a direct result of lower realized crude oil prices (USO) and lower hedging effectiveness. Sequentially, Marathon Oil’s 2Q16 FCF normalized to total production rose ~$7.22 per boe.

For 2Q16, other upstream companies including Murphy Oil (MUR), Energen (EGN), and Denbury Resources (DNR) have reported lower year-over-year FCF normalized to total production.

Now let’s discuss Marathon Oil’s dividend.

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