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Why Marathon Oil Expects Lower Production in 1Q18

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Marathon Oil’s 1Q18 production guidance

For 1Q18, Marathon Oil (MRO) expects total production in the range of 370–390 Mboepd (thousand barrels of oil equivalent per day). Marathon Oil’s 1Q18 production guidance excludes production from Libya.

On a year-over-year basis, the mid-point of Marathon Oil’s 1Q18 production guidance range is ~1% lower than its 1Q17 production of 383 Mboepd. Even sequentially, Marathon Oil’s 1Q18 production guidance is ~9% lower than its 4Q17 production of 416 Mboepd. Per Marathon Oil’s 4Q17 earnings release, MRO attributed the expected decrease in 1Q18 production to planned turnaround activity in Equatorial Guinea.

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In 4Q17, Marathon Oil reported crude oil and condensate production of 208,000 barrels per day, natural gas liquids production of 62,000 barrels per day, and natural gas production of 869 million cubic feet per day. So, in 4Q17, MRO’s production mix in 4Q17 contained almost ~65% liquids (crude oil, condensate, and natural gas liquids). In 1Q17, MRO reported ~53% liquids in its production mix.

Marathon Oil’s 2018 production guidance

For 2018, Marathon Oil expects full-year production in a range of 390–410 Mboepd, which is ~12% higher than MRO’s divestiture-adjusted production in 2017. MRO plans to increase total crude oil production by ~18% compared with divestiture-adjusted crude oil production in 2017. Marathon Oil’s 2018 production guidance excludes production from Libya.

MRO’s peer Devon Energy (DVN) expects full-year production in a range of 552–576 Mboepd, which is ~4% higher than DVN’s production of 543 Mboepd in 2017.

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