Marathon Oil Sees Annual Profit Halved

Marathon Oil Corporation saw its net income plummet year-on-year, reporting a drop from $3.6 billion for 2022 to $1.5 billion for 2023. In a media release, Marathon Oil said its net income for the last quarter of 2023 landed a $397 million, slipping from $453 million for the corresponding quarter a year prior.

"2023 marked another year of impressive delivery against every dimension of our Framework for Success", said chairman, president, and CEO Lee Tillman. "We generated $2.2 billion of adjusted free cash flow, returned $1.7 billion of capital back to our shareholders, and reduced gross debt by $500 million, further improving our investment grade balance sheet”.

“These results are a strong testament to the quality of our multi-basin portfolio, the discipline in our capital allocation framework, and the hard work of all our employees. Most importantly, we delivered these outstanding results while holding true to our core values: reporting a record year for safety performance, achieving our 2025 GHG [greenhouse gas] intensity reduction goal two years ahead of schedule, and further improving our natural gas capture", he said.

Marathon Oil said its capital expenditure budget for 2024 is between $1.9 billion and $2.1 billion. This is consistent with the company’s capital allocation framework that prioritizes corporate returns and free cash flow generation, it said.

The 2024 program is expected to deliver approximately $1.9 billion of free cash flow, assuming $75 per barrel West Texas Intermediate, $2.50 per million British thermal unit (MMBtu) Henry Hub, and $10/MMBtu TTF. Marathon Oil's 2024 financial guidance assumes Alternative Minimum Tax (AMT) cash tax payments for its U.S. domestic operations at 15 percent of pre-tax income, partially offset by approximately $150 million of expected research and development tax credits.

Marathon Oil said it expects to deliver a total company oil production of 190,000 net barrels of oil equivalent per day (bopd) at the midpoint of its 2024 guidance range. Although winter weather is expected to lower first-quarter production by about 4,000 net bopd, primarily concentrated in the Bakken, the company expects no impact on its flat oil production guidance for the full year.

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