Marathon Oil Corp. (NYSE: MRO) will cut an additional 20% from its spending plan for 2015, bringing the total to less than half of last year’s budget as operating profits decline, Bloomberg reported Feb. 18.
Sales of assets in Angola and Norway helped the Houston-based producer report fourth-quarter net income of $926 million on Feb. 18. Excluding those sales and other one-time items, Marathon had a loss of $2 million, or 13 cents a share. That fell short of an expected profit of 2 cents a share, the average of 20 analysts’ estimates compiled by Bloomberg.
Oil’s more than 50% decline since June 20 has eroded profits and forced producers and drillers to cut more than $40 billion in spending. Marathon will focus the majority of its $3.5 billion spending plan on producing oil and natural gas from the Eagle Ford in Texas, North Dakota’s Bakken and the Oklahoma resource basins.
“Nearly 70% of our 2015 capital spending will be directed toward our three core U.S. resource plays, which continue to be among our highest-return investment opportunities,” CEO Lee Tillman said in a statement Feb. 18. “This budget reflects an emphasis on investment selectivity, balance sheet flexibility and positioning for price recovery.”
Marathon expects production from its main shale plays to increase 20% this year, slowing down from 35% growth in 2014.
Marathon fell 1.4% to $28.62 in after-hours trading in New York.
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