Marathon Oil Has Set a $2.4-billion Capital Budget for This Year

Marathon Oil has set a $2.4 billion development capital budget for 2019 with 95% of the funds to be allocated 60-40 to the four US resource plays.

These plays are Eagle Ford and Bakken, and Oklahoma and Northern Delaware, respectively.

Marathon Oil has an overall $2.6 billion capital budget for the year.

Fourth quarter 2018 net income was $390 million, while adjusted net income was $121 million. Net operating cash flow was $855 million, or $787 million before changes in working capital.

For full year 2018, Marathon Oil reported net income of $1.1 billion. Adjusted net income was $601 million and net operating cash flow was $3.234 billion, or $3.211 billion before changes in working capital.

This year the company has projected that total oil production will grow 10%, with US oil growth of 12%, both at the midpoint of guidance and on a divestiture-adjusted basis.

For the first quarter, the company expects total oil production of 195,000-215,000 b/d of oil, with US oil production of 175,000-185,000 b/d. This is accounting for extreme weather conditions experienced early in the quarter.

CEO Lee Tillman said on the earnings call, “We don’t believe it’s a mystery as to what investors are looking for, it’s pretty straightforward. Investors are looking for companies that have the right portfolio of assets, that have the right strategy, putting returns first, generating sustainable free cash flow, and sharing that cash flow with investors, that have a strong balance sheet to weather potential volatility, and that have the capability to execute on their commitments consistently.

“We believe we scream well on these criteria, and our differentiated performance in 2018 stands as our proof point. For our company differentiated execution led the way in 2018 and underpins our confidence in 2019 delivery. Capital discipline has been the buzzword in the E&P industry throughout most of 2018, and certainly as we enter 2019.” “At Marathon, we have a very clear working definition of capital discipline, and it has been our touchstone as we have successfully transitioned to our differentiated multi-basin U.S. resource play model, it is our framework for success,” he added.

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