Marathon Oil on Wednesday posted a wider net loss for the fourth quarter 2016 due to a tax-related charge and said it would double its capital spending for 2017.
In a quarterly report on Wednesday, the company posted a fourth quarter 2016 net loss of $1.37 billion. This compares to $793 million net loss in the corresponding period of 2015. On the other hand, Marathon’s adjusted net loss for 4Q 2016 was $83 million versus $323 million loss in 4Q 2015.
The company’s fourth quarter 2016 results included a charge of $1.35 billion, which has no cash flow impact, to establish a valuation allowance against net deferred tax assets.
Marathon’s revenues during the fourth quarter 2016 amounted to $1.39 billion, compared to $1.48 billion in the same period of 2015.
During the quarter, total company production averaged 396,000 net boed, including Libya.
For the year 2016, Marathon’s capital program was $1.1 billion, which was $300 million below the company’s original budget.
Marathon doubles spending
The company on Wednesday announced a 2017 capital program of $2.2 billion with over 90 percent allocated to its high return U.S. resource plays.
While $2 billion will go to the U.S. resource plays, which will be split about one-third to each of the three basins with Oklahoma’s strategic objectives occupying the company’s first call on capital, only 10 percent of the capital program will be allocated to its International E&P business, Oil Sands Mining (OSM), corporate and other.
Following last year’s completion of the Alba B3 compression project in Equatorial Guinea, that asset is expected to be a significant free cash flow generator in 2017.
Marathon Oil President and CEO, Lee Tillman, said: “Our $2.2 billion capital program accelerates sequential resource play production growth to the second quarter while providing exit rate momentum that positions us to deliver compound annual growth rates of 10-12 percent for total company, excluding Libya, and 18-22 percent for our resource plays through 2021.
“Importantly, these production growth ranges apply to both oil as well as BOE, and we can achieve them within cash flows.”
For full year 2017, the company forecasts production available for sale from the combined North America and International E&P segments, excluding Libya, to average 335,000 to 355,000 net boed, about 5 percent higher than 2016 at the midpoint on a divestiture-adjusted basis.
Offshore Energy Today Staff