Marathon Oil on Thursday released information on market factors and operating
conditions that occurred during the first quarter 2006 and could impact the
company's quarterly financial results.
The exploration and production market indicators and company
estimates noted below may differ significantly
from the actual first-quarter results, which Marathon will report on April 27.
Production sold during the first quarter is estimated to be between
365,000 and 370,000 barrels of oil equivalent per day (boepd). Revenues are
reported based on production sold during the period and can vary from
production available for sale primarily as a result of the timing of
international crude oil liftings. Oil and natural gas production available
for sale during the first quarter is expected to be approximately 415,000
boepd, exceeding the previous guidance of 395,000 to 410,000. During the
first quarter of 2006, approximately half of the difference between the
available for sale and production sold volumes are a result of underlifted
quantities associated with Libya, with the remainder from Equatorial Guinea
and the United Kingdom.
Crude oil and natural gas market price
indicators have remained strong during the first quarter. For the months of
January and February 2006, Marathon's worldwide crude oil realizations were
slightly higher than those realized during the fourth quarter 2005. U.S.
natural gas realizations for January and February 2006 were $1.25 per million
cubic feet less than those realized in the fourth quarter 2005, while
international natural gas realizations for these two months were relatively
flat with the fourth quarter 2005. Marathon's actual crude oil and natural
gas price realizations vary from market indicators primarily due to product
quality and location differentials.
Estimated first quarter exploration expense is expected to remain
unchanged from previous guidance of between $70 and $95 million. U.S.
exploration expense is estimated to be between $35 and $50 million, while
international exploration expense is estimated to be $35 to $45 million.