According to Marathon Oil’s 4Q16 press release, the company attributed its better-than-expected production to ~40% year-over-year (or YoY) production growth in the Oklahoma STACK and strong operational performance from its Bakken wells. MRO’s 4Q16 production also increased due to the start of its production in Libya.
Sequentially, Marathon Oil’s 4Q16 production is ~1% lower compared to 3Q16. On a YoY basis, Marathon Oil’s 4Q16 production is ~8% lower compared to 4Q15. MRO’s YoY production fall can be attributed to its reduction of its capital investments and divestitures in the last year. We’ll study MRO’s 2016 capital investments in the next article.
MRO’s peer Devon Energy (DVN) reported a ~7% sequential fall in its 4Q16 production.
Segment-wise production details
In 4Q16, Marathon Oil reported North America E&P (exploration and production) production of 212 Mboepd, ~18% lower than its 4Q15 North America E&P production of 260 Mboepd.
In 4Q16, Marathon Oil reported International E&P production of 129 Mboepd, ~5% higher than its 4Q15 International E&P production of 123 Mboepd. MRO’s International E&P production excludes Libya, which produced 8 Mboepd in 4Q16.
In 4Q16, Marathon Oil reported production from oil sands mining of 47 Mboepd.
For 1Q17, Marathon Oil expects production in the range of 360–380 Mboepd, a midpoint rise of ~5% compared to its 1Q16 production. According to MRO’s press release, it attributed the expected production level to “severe winter weather in North America, as well as scheduled and unscheduled downtime internationally.”
MRO plans to return to sequential production growth in 2Q17. We’ll study MRO’s 2017 production and capital budget guidance in Part Four of this series, but first, lets take a look at how MRO performed on key operational parameters in 2016.