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Understanding Marathon Oil’s Lifting Costs

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Marathon Oil’s lifting costs

In 2Q16, Marathon Oil (MRO) reported lifting costs of ~$10.88 per boe (barrel of oil equivalent), which is ~10% lower than in 2Q15.

Lifting costs (also referred to as production costs) are the costs to operate and maintain wells after drilling is complete. Lifting cost is derived by adding LOE (lease operating expenses) to workover costs and production taxes.

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Other upstream players

By comparison, S&P 500 (SPY) upstream companies ConocoPhillips (COP) and Murphy Oil (MUR) have lifting costs of $11.67 per boe and $11.07 per boe, respectively. Stone Energy (SGY), a smaller player, has a lifting cost of $10.07 per boe.

Continue to the next part for a look at production margins.

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