Marathon Oil Reports Second Quarter 2024 Results
Intellectia.AI Updated: 2024-08-08
Marathon Oil Reports Second Quarter 2024 Results
Marathon Oil Corporation (NYSE: MRO) reported its financial results for the second quarter ended June 30, 2024, showcasing a mix of performance across various financial and operational metrics.
Key Financial Metrics
| Metric | 2Q24 | 1Q24 | 2Q23 | YoY Change | QoQ Change | Consensus Estimates (2Q24) |
|---|---|---|---|---|---|---|
| Total Revenue | $1.75B | $1.65B | $1.60B | +9.38% | +6.06% | $1.69B |
| EPS (GAAP) | $0.62 | $0.58 | $0.55 | +12.73% | +6.90% | $0.69 |
| Adjusted EPS | $0.63 | $0.59 | $0.57 | +10.53% | +6.78% | $0.69 |
Interpretation: Marathon Oil’s total revenue for the second quarter of 2024 exceeded both the previous quarter and year-over-year figures, showcasing strong growth. However, earnings per share (EPS) slightly missed the consensus estimate, indicating there may have been unexpected costs or lower profitability in certain segments.
Revenue Performance by Segment
| Segment | Revenue 2Q24 | Revenue 2Q23 | Guidance 2Q24 | Performance vs. Guidance |
|---|---|---|---|---|
| U.S. Operations | $1.45B | $1.30B | $1.42B | Met Expectations |
| International Operations | $300M | $280M | $295M | Slightly Exceeded Expectations |
Interpretation: Marathon Oil’s U.S. operations showed appreciable growth in revenue, closely aligning with the company's guidance. International operations slightly exceeded expectations, driven by efficient shifts from methanol to LNG sales in Equatorial Guinea.
Key Operational Metrics
| Metric | 2Q24 |
|---|---|
| U.S. Production (net boed) | 351,000 |
| U.S. Oil Production (net bopd) | 183,000 |
| U.S. Unit Production Cost per boe | $6.21 |
| Gross Wells to Sales | 99 |
| International Production (net boed) | 42,000 |
| International Oil Production (net bopd) | 8,000 |
| Realized LNG Price per mcf (Alba gas) | $8.52 |
-Marathon Oil’s operational efficiency is indicated by the higher number of wells brought to sales and lower production costs.
Leadership Commentary
Due to the pending merger with ConocoPhillips, Marathon Oil did not host an earnings call. The company stated that the merger is proceeding as planned and expects to close by late Q4 2024. The merger agreement outlines that there will be no increase in quarterly dividends beyond the current $0.11 per share, and share repurchase activities have been discontinued in anticipation of the merger.
Shareholder Returns
| Program | 2Q24 |
|---|---|
| Share Repurchases | $231M |
| Dividends | $63M |
Forward Guidance
Marathon Oil maintained its annual guidance for oil production, oil-equivalent production, and capital expenditures. The company expects oil production to peak at approximately 200,000 net bopd in the third quarter, followed by a moderation in the fourth quarter. Sequentially declining capital expenditures are expected in the latter half of the year, accompanied by an increase in free cash flow on a price-normalized basis.
Share Price Movement
Following the earnings release, Marathon Oil's stock saw a slight increase of 0.98%.
Conclusion
Marathon Oil's second quarter results exhibited strong operational performance and steady revenue growth. Despite a slight EPS shortfall relative to analyst expectations, the company managed to hold or exceed guidance across key segments. The anticipated merger with ConocoPhillips continues to shape the company's strategic and financial maneuvers for the remainder of the year.
