Marathon Oil said Tuesday that its third quarter profit plunged from a year ago when record-high prices sent gasoline prices over $4 per gallon.

Yet the company, based in Houston, says production rose this quarter and for the entire year compared with 2008.

The rising production numbers are in line with what other major oil and gas producers are reporting this quarter, as companies report major new finds and cut costs.

Rebounding prices for crude have helped.

Marathon said it made $413 million, or 58 cents per share, for the quarter ended Sept. 30, down from profit of $2.1 billion, or $2.90 per share, in the year ago quarter.

Discounting charges, Marathon said it made 61 cents per share in the quarter. Not including a $101 million gain, the year-ago profit would have been $2 billion, or $2.76 per share.

Revenue for the quarter was $14.5 billion, down 38 percent from revenue of $23.3 billion in the year ago quarter.

The report shows profit is up considerably from the second quarter, but no where close to what Marathon made a year ago.

Profit from exploration and production operations in the U.S. totaled $32 million in the quarter, better than the $41 million loss in had in the second quarter, but well below the $285 million gain in the third quarter of a year ago. The story was the same for its international operations where profit was $459 million in the quarter, up from $261 million in the second quarter, but down from $584 million in the year ago quarter.

Marathon said production rose 11 percent through the first nine months of the year, primarily the result of its Alvheim/Vilje projects in Norway that started production in mid 2008.

To help offset lower prices for crude, Marathon has been cutting costs. It has operating costs per barrel of oil is down 10 percent for the first nine months of the year.

A service of YellowBrix, Inc.