Marathon Oil reports second quarter 2024 net income of $349 million or $0.62 per diluted share, which includes the impact of certain items not typically represented in analysts' earnings estimates and that would otherwise affect comparability of results. Adjusted net income was $357 million or $0.63 per diluted share. Net operating cash flow was $1,088 million or $1,028 million before changes in working capital (adjusted CFO).
HIGHLIGHTS
- Second quarter free cash flow (FCF) of $442 million and adjusted FCF of $364 million before changes in working capital and including Equatorial Guinea (E.G.) distributions and other financing
- Total return of capital to shareholders of $294 million during second quarter
- Sequential increase in second quarter production to 191,000 net bopd and 393,000 net boed
- No change to full-year 2024 production and capital expenditure guidance ranges
2Q24 Financial Overview
CASH FLOW: Net cash provided by operations was $1,088 million during second quarter or $1,028 million before changes in working capital. Second quarter capital expenditures totaled $665 million, consistent with Marathon Oil's guidance that 2024 capital expenditures would be just over 60% weighted to the first half of the year and reflecting an acceleration in wells to sales from continued drilling and completion efficiencies.
RETURN OF CAPITAL: Second quarter return of capital totaled $294 million, including $231 million of share repurchases and the $63 million base dividend. Marathon Oil discontinued its share repurchase program upon announcement of its pending merger with ConocoPhillips. Under the Merger Agreement, Marathon Oil may not increase the quarterly dividend in excess of the current $0.11 per share.
BALANCE SHEET: Marathon Oil second quarter cash and cash equivalents totaled $77 million, an approximate $30 million increase from the prior quarter. Also during second quarter, the Company reduced gross debt by approximately $130 million to a quarter-end gross debt total of $5.3 billion.
ADJUSTMENTS TO NET INCOME: The adjustments to net income for second quarter totaled $8 million.
2Q24 Operational Overview
UNITED STATES (U.S.): U.S. production averaged 351,000 net boed during second quarter 2024, while oil production averaged 183,000 net bopd. Second quarter U.S. unit production cost averaged $6.21 per boe.
Excluding joint venture wells, the Company brought a total of 99 gross Company-operated wells to sales during second quarter, above the guidance range of 85 to 90 wells due to continued drilling and completion efficiency gains.
|
Asset |
Production (bopd) |
Production (boed) |
Wells to Sales (Gross) |
|
Eagle Ford |
81,000 |
153,000 |
63 |
|
Bakken |
67,000 |
107,000 |
17 |
|
Permian |
26,000 |
47,000 |
19 |
|
Oklahoma |
7,000 |
42,000 |
0 |
INTERNATIONAL: E.G. production averaged 42,000 net boed during second quarter, including 8,000 net bopd.
The Company continued optimizing its operations by diverting a portion of its Alba gas from AMPCO methanol sales to higher margin LNG sales. Marathon Oil's Alba LNG sales achieved a realized price of $8.52 per mcf during the quarter, as the Company continued realizing the uplift in value from the shift to global LNG pricing.
Total International segment income was $79 million during second quarter, including $26 million of income from equity method investees. The Company received total cash distributions of $77 million from equity method companies during second quarter, including dividends of $75 million and return of capital of $2 million.
2024 Guidance Overview
Marathon Oil's previously provided annual guidance ranges for total Company oil production, total Company oil-equivalent production, and capital expenditures remain unchanged, as shown in the table below.
|
2024 Annual Guidance |
High |
Low |
|
Oil Production (bopd) |
195,000 |
185,000 |
|
BOE Production (boed) |
400,000 |
380,000 |
|
Capital Expenditures |
$2.1 billion |
$1.9 billion |
Total Company oil and oil-equivalent production are expected to peak during third quarter, with oil production rising to approximately 200,000 net bopd, before moderating into fourth quarter. Capital expenditures are expected to decline sequentially in both the third and fourth quarters, while FCF on a price-normalized basis is expected to increase sequentially in both quarters.
Earnings Call
Due to the pending merger with ConocoPhillips, Marathon Oil will not host a conference call or webcast to discuss its second quarter 2024 results.
Source: Marathon Oil
