uploads///MRO Q Crude Oil Realized Prices

Where Does Marathon Oil’s Crude Price Stand Next to WTI Crude?

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Dec. 16 2016, Updated 1:38 p.m. ET

Marathon Oil’s 2Q16 crude oil realized prices

Excluding the effect of hedges, Marathon Oil’s (MRO) North America E&P (exploration and production) average realized crude oil price in 2Q16 was $40.77 per barrel, which is ~23% lower than its $52.63 per barrel in 2Q15. MRO’s YoY (year-over-year) lower crude oil realized prices were compensated partially by its gains on crude oil derivatives. (We’ll examine MRO’s hedges further in Part 9.)

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2Q16 crude oil realized price compared to benchmark

MRO’s North America E&P average realized crude oil price in 2Q16 underperformed the average WTI (West Texas Intermediate) crude oil price during the same period. MRO’s average realized crude oil price in 2Q16 is ~11% lower than the average WTI crude oil price of $45.64 per barrel during the same period.

2Q16 natural gas and natural gas liquids realized prices

For 2Q16, MRO’s North America E&P average realized price for natural gas production decreased ~29% to $1.96 per thousand cubic feet, as compared to $2.76 per thousand cubic feet during the same period in 2015.

In 2Q16, MRO’s North America E&P average realized price for natural gas liquids production increased ~1% to $14.84 per barrel, as compared to $14.77 during the same period in 2015.

Other upstream players

Other upstream companies from the S&P 500 (SPY), including Southwestern Energy (SWN), Pioneer Natural Resources (PXD), and Devon Energy (DVN), also have lower realized crude oil prices in 2Q16 than the average WTI crude oil price during the same quarter.

In the next part, we’ll take a closer look at Marathon Oil’s realized price effectiveness in terms of production costs.

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