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.
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The company also said it expects to generate substantial free cash flow in 2018, allowing it to initiate a dividend in the first-quarter of 2019.