Marathon Oil Slashes CAPEX 50%, Posts Quarterly Loss

Reuters

Feb 17 (Reuters) - Marathon Oil Corp, a U.S. shale exploration company, on Wednesday slashed its 2016 spending by 50 percent and reported a quarterly loss as the company's results were hurt by a steep decline in crude oil prices.

Crude oil prices have tumbled about 70 percent from mid-2014 highs above $100 a barrel. Current prices around $30 a barrel are not high enough for exploration and production companies to invest in many new shale wells, so most have slashed spending.

Marathon said it plans to spend $1.4 billion this year, a reduction of more than 50 percent from 2015.

"Through this cycle of sustained low oil prices and market volatility, Marathon Oil will continue to focus on balance sheet protection and operational flexibility," said Lee Tillman, Marathon's chief executive officer.

Marathon, based in Houston, posted a fourth-quarter net loss of $793 million, or $1.17 per share, compared with a profit of $926 million, or 1.37 cents per share, in the year-ago period.

Excluding items such as asset impairments, Marathon had a loss of 48 cents per share. Analysts on average had expected a loss of 48 cents per share, according to Thomson Reuters I/B/E/S.

Adjusting for divestitures, Marathon's oil and gas output is expected to fall 6 to 8 percent this year. In the fourth quarter, output averaged 432,000 barrels oil equivalent per day, about flat compared with the 2015 third quarter.

To raise cash in the downturn, Marathon also said it expects to sell $750 million to $1 billion in oil and gas properties it no longer considers central to its operations.

(Reporting by Anna Driver in Houston; Editing by Matthew Lewis)

Copyright 2016 Thomson Reuters. Click for Restrictions.

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