Marathon Oil Corp. reported a 50% jump in quarterly adjusted profit on Aug. 7, as higher U.S. shale output countered lower realized crude prices and production costs fell.
The company, like many other U.S. oil producers, is extracting more crude from its wells in the prolific shale basins against the backdrop of pressure to cut back on spending to boost shareholder returns.
Marathon’s shares were up about 5% at $12.65 in extended trading.
U.S. production at the company jumped 11.4% to 332,000 barrels of oil equivalent per day (boe/d) in the second quarter, while total production rose 3.8% to 435,000 boe/d.
Marathon, which raised its share buyback program to $1.5 billion, said realized per barrel of crude oil and condensate price fell 10.4% to $59.18 per barrel in the United States in the quarter.
Oil prices have come under pressure from a surge in U.S. production and fears of slowing global demand, even as oil group OPEC and allies cut back production.
The company said U.S. unit production costs dropped 14% to $4.89 per barrel of oil equivalent (boe) in the quarter.
Marathon Oil expects U.S. oil production to be between 190,000 barrels and 200,000 per day in the third quarter.
Adjusted net income rose to $189 million, or 23 cents per share, in the three months ended June 30, from $126 million, or 15 cents per share, a year earlier.
U.S. energy firms reduced the number of oil rigs this week and for a record 10th month in a row as producers follow through on plans to cut spending on new drilling this year.
A majority of the drop in production came as federal offshore Gulf of Mexico production slid about 332,000 bbl/d to 1.58 MMbbl/d, the data showed.
Drillers cut three oil rigs in the week to Oct. 4, bringing down the total count to 710, the lowest since May 2017, Baker Hughes, a GE company, said in its weekly report.