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Marathon Oil (MRO) 4Q Earnings Drop 41.3 Pct, Miss Estimates

 February 06, 2013 08:27 AM

(By Balaseshan) Marathon Oil Corp. (NYSE: MRO) reported a 41.3% drop in quarterly earnings due to higher provision for taxes as well as lower exploration and production segment income. Despite revenue exceeding consensus, adjusted earnings missed Street's expectations.

Profit dropped 41.3% to $322 million for the fourth quarter, while earnings per share (EPS) plunged 42.3% to $0.45. Adjusted earnings declined to $388 million or $0.55 per share from $552 million or $0.78 per share.

Revenue increased 11.2% to $4.24 billion, while sales and other operating revenue grew 13.3% to $4.12 billion.

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Analysts, on average, polled by Thomson Reuters had expected a profit of $0.67 per share on revenue of $3.93 billion for the fourth quarter.

Worldwide liquid hydrocarbon sales increased to 457 million barrels per day (mbbld) from 302 mbbld, natural gas sales decreased to 973 millions of cubic feet per day (mmcfd) from 892 mmcfd.

Worldwide average realizations of liquid hydrocarbons declined to $97.86 per barrel from $98.46 per barrel, while average realizations of liquid gas grew to $3.26 per thousand cubic feet (mcf) from $3.00 per mcf.

Net synthetic crude oil sales increased to 48 mbbld from 44 mbbld, synthetic crude oil average realizations fell to $76.36 per barrel from $93.81 per barrel.

LNG sales decreased to 6,327 metric tonnes per day from 6,984 metric tonnes per day, while Methanol sales rose to 1,465 metric tonnes per day from 1,199 metric tonnes per day.

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Looking ahead, Marathon Oil estimates first quarter E&P production available for sale will be between 415,000 and 430,000 net barrels of oil equivalent per day (boed), which includes one month of Alaska production but excludes Libya.

The company expects to spend about one-third of its $5.2 billion capital, investment and exploration budget for 2013 in the Eagle Ford. Full-year 2013 E&P production available for sale is projected to be between 395,000 and 420,000 net boed, reflecting the sale of the Alaska business on Jan. 31, 2013 as well as planned turnarounds in Norway, Equatorial Guinea and the U.K. during the year.

MRO closed Tuesday's regular session up 1.61% at $34.72. The stock has been trading between $23.17 and $35.49 for the past 52 weeks.

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