uploads///MRO Q Realized Price Effectiveness

Chart in Focus: Marathon Oil’s Realized Price Effectiveness

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Apr. 19 2017, Updated 9:06 a.m. ET

Marathon Oil’s realized price effectiveness

Realized price effectiveness tells us that, in 4Q16, Marathon Oil’s (MRO) realized price, without hedging benefits, was ~107% above its production cash cost (lease operating expenses + production and ad valorem taxes + transportation expenses + general and administrative cash expenses + interest cash expenses) and ~3% below its total production cost (cash cost + depletion, depreciation, and amortization).

Sequentially, MRO’s 4Q16 realized price effectiveness in terms of cash cost rose from ~85% in 3Q16 to ~107% in 4Q16. This higher realized price effectiveness in terms of cash costs can be attributed to the ~20% sequential rise in MRO’s 4Q16 realized price.

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Realized price effectiveness

Realized price effectiveness is defined as an excess or shortfall of realized price to item cost, scaled by item cost. MRO’s peer ConocoPhillips’s (COP) realized price, without hedging benefits, was ~123% above its production cash cost and ~10% above its total production cost in 4Q16.

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