Ongoing production shortfalls in Libya and lower oil and gas sales have seen Marathon Oil miss profit forecasts for the last quarter by more than expected.
The large Canadian independent, which also has operations in the Kurdish region of Iraq, said income from operations for the quarter hit $552 million, while quarterly net income fell to $549 million, down 22% from $706 million for the same period last year, despite higher average oil prices.
In a company statement, marathon reported sales volumes during Q4 2011averaged 368,000 barrels of oil equivalent per day (boed), compared with 417,000 boed a year ago.
The difference is mainly attributable to the fall-off in Libyan production, where Marathon says 93% of saleable crude output is offline. The company says current net production in Libya, where it works the Waha field in a consortium with Conoco Phillips, Hess and the National Oil Company, is between 25,000 and 30,000 barrels of oil equivalent per day, and increasing production will be a slow process.
“As far as Libya goes, we have purposely removed that from our (2012 production) guidance because I think you’re going to see some variability out there,” David Roberts, Marathon Oil’s executive vice president and chief operating officer, told analysts on a conference call. “Our ability to perform maintenance as was the norm before the difficulties in North Africa could be a challenge as the years go on.”
Meanwhile shares in Marathon Petroleum, the former refining business of Marathon Oil before it was spun off last year, say shares rise despite missing analysts’ forecasts with a $75 million quarterly loss. The firm announced it will begin a $2 billion share buyback program and may spin off some midstream assets.
