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Marathon profit sinks with industry; downstream loss, upstream shrinkage
Allen Baker, PNA contributing writer
Marathon Oil Corp., in its first quarter as a standalone company, reported shrinking profits in line with the rest of the industry.
Net income dwindled to $67 million for the quarter, compared with $509 million in the first quarter of 2001. That’s a drop of 87 percent.
Operating profit in the fourth quarter was $98 million, excluding big adjustments as Marathon spun off its steel operations.
The refining, marketing and transportation segment showed a loss of $51 million for the quarter, compared with profits of $276 million a year earlier. That’s in line with results at other major oil companies, including giant ExxonMobil.
Marathon Ashland Petroleum LLC, which is 62-percent owned by Marathon, moved an average of 891,000 barrels a day through its refineries, up 2 percent compared with the 2001 quarter.
But the refining and wholesale marketing margin was a razor-thin 1.62 cents per gallon, compared with 8.65 cents a year earlier. E&P profits way down Exploration and production produced profits of $165 million for the quarter, barely a fourth of the $600 million generated last year, when prices were significantly higher.
The Houston-based company collected an average of $18.06 for each barrel of oil, down 26 percent from the $24.35 it received in the first quarter of 2001. Gas brought $2.46 per thousand cubic feet, not even half of the $5.47 received last year.
Hedging activities helped a bit on the gas sales, but hurt the results from oil.
Liquids production worldwide for the quarter dropped 8 percent to 206,000 barrels daily from 222,900 barrels. U.S. liquids declined slightly to 122,200 barrels daily from 124,400 barrels.
Worldwide gas production rose a bit to 1,309 million cubic feet daily, from 1,222 million cubic feet a year ago. But new gas from West Africa brought 49 million cubic feet daily.
Production declined in all other regions.
Marathon bought producing properties in Equatorial Guinea at the beginning of the year for $993 million. It also traded some assets with XTO Energy to acquire coalbed methane reserves in the Powder River Basin.
Revenues and other income totaled $6.45 billion, a drop of 26 percent from $8.72 billion a year earlier. Revenues for the fourth quarter were $6.85 billion.
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