Marathon Oil sets $2.2 billion 2020 capital budget, down slightly Y-o-Y

Marathon Oil Corp. has earmarked $2.2 billion in development capital for 2020, down 9% from 2019.The total is part of the company’s overall $2.4-billion capital budget for this year, down 11% from 2019 levels. Resource play exploration capital of $200 million primarily supports exploration and appraisal drilling in the Texas Delaware oil play and Louisiana Austin Chalk.

Annual US oil production growth in 2020 is expected to be 6% at the midpoint of guidance, with comparable growth expected in 2021 on comparable development capital. For this year’s first quarter, Marathon forecasts US oil production of 192,000-202,000 net b/d of oil. First quarter 2020 international oil production is expected to be 12,000-16,000 net b/d of oil.

Earnings, production

Marathon Oil Corp. reported full-year 2019 net income of $480 million, including the impact of certain items not typically represented in analysts’ earnings estimates and that would otherwise affect comparability of results. Adjusted net income was $611 million. Net operating cash flow was $2.75 billion, or $2.89 billion before changes in working capital.

Marathon Oil reported fourth quarter 2019 net loss of $20 million. Adjusted net income was $55 million. Net operating cash flow was $700 million, or $685 million before changes in working capital. The adjustments to net income for the quarter totaled $75 million before tax, primarily due to the income impact associated with unrealized losses on derivative instruments.

The company reported average US production of 328,000 net boe/d for 2019’s fourth quarter, including 196,000 net b/d of oil. Eagle Ford production averaged 105,000 net boe/d for fourth quarter 2019. Bakken production averaged 108,000 net boe/d in the fourth quarter. In Oklahoma, production averaged 82,000 net boe/d in the fourth quarter 2019. Northern Delaware production averaged 28,000 net boe/d in the fourth quarter. Equatorial Guinea production averaged 85,000 net boe/d for the quarter.

First quarter 2020 U.S. oil production guidance is 192,000 to 202,000 net bopd. First quarter 2020 International oil production guidance is 12,000 to 16,000 net bopd.