Marathon Oil’s operating netbacks
In 1Q17, Marathon Oil (MRO) reported operating netback of ~$22.2 per boe (barrel of oil equivalent), which is ~135% higher than in 1Q16. A strong increase in MRO’s crude oil (USO) and natural gas (UNG) realized prices caused a significant increase in operating netback in 1Q17.
Operating netback, or production netback, is the oil and gas revenue realized per barrel of oil equivalent (or boe) after all the costs to bring one barrel of oil equivalent to the marketplace are subtracted from realized price. Operating netback derives from subtracting production expenses, transportation expenses, and production taxes from realized price, including hedging benefit.