Marathon oil posted a $2.1billion net loss for 2016, despite ‘living within its means’.
The firm’s chief executive Lee Tillman said: “Despite challenging market conditions throughout 2016, we executed on our objectives of living within our means inclusive of non-core asset sales, while lowering costs and strengthening our balance sheet. We finished the year above the midpoint of E&P production guidance while spending significantly less than our original capital budget.
“We’re entering 2017 with a simplified portfolio more concentrated on our high-return, low-cost opportunities in the U.S. resource plays. Our $2.2billion 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.”
Marathon reduced its production costs in North America by 33% and its international production costs, excluding Libya, by 15%. It shaved 18% off its annual expenses and has a year-end liquidity of $5.8billion comprised of $2.5billion in cash and an undrawn $3.3billion revolving credit facility.
It also ended the year with 12 rigs operating in the US resource plays.
Marathon’s production averaged 396,000 net boed, including Libya.
UK production available for sale averaged 19,000 net boed in fourth quarter of 2016, up from 18,000 net boed in the previous quarter and 2015’s 18,000 net boed.
Finally during 2016, Marathon Oil added proved reserves of 342 million barrels of oil equivalent (boe) through additions and acquisitions. This was virtually all in North America E&P, and largely from oil and condensate.
Net proved reserves were approximately 2.1 billion boe at year-end.