EOG, Marathon profits fall on lower prices
EOG Resources reported $615 million in quarterly profits on Wednesday that fell by nearly 50 percent from $1.2 billion a year ago in large part from lower oil and gas prices.
EOG’s revenues dipped by 10 percent down to $4.3 billion. But the Houston oil and gas producer touted rising production volumes that jumped 12 percent from a year ago, reduced well costs and new successes in emerging Permian Basin plays.
Chief Executive Bill Thomas specifically cited the potential in the Wolfcamp M and Third Bone Spring shale plays in West Texas and New Mexico that add 1.6 billion barrels of oil equivalent in potentially recoverable resources.
“We reduced operating expenses, grew volumes at double-digit rates while lowering well costs, and generated substantial free cash flow,” Thomas said. “EOG has never been in a better position to sustain this success long into the future.”
While EOG’s top production continues to come from its pioneering position in South Texas’ Eagle Ford shale, EOG has emerged as one of the most active drillers and producers in the Permian, especially since buying New Mexico-based Yates Petroleum three years ago.
Marathon Oil posted a $165 million profit for the third quarter that dipped 35 percent from a year ago.
The Houston oil and gas producer saw its revenues fall by nearly 20 percent as crude and natural gas prices have declined for much of the past 12 months.
The company’s oil production of 216,000 barrels per day jumped 14 percent from a year ago. Marathon touted new drilling successes in the Permian Basin's western lobe, called the Delaware Basin, and improved returns in its more mature acreage in South Texas’ Eagle Ford shale and in North Dakota’s Bakken shale.
Marathon is slowly becoming more active in the Permian while continuing to lean on the Eagle Ford and Bakken for the bulk of its production volumes. Marathon also remains active in Oklahoma shale.
Without providing specific numbers, Chief Executive Lee Tillman said Marathon will cut spending in 2020 and allow its oil production growth to moderate.
“We’ll continue to be guided by our unwavering commitment to capital discipline and low breakeven oil price to position Marathon Oil for success across a wide range of commodity price environments in 2020 and beyond,” Tillman said.
Despite ConocoPhillips recently opting to pull out of the prospective Louisiana Austin Chalk play because its test wells produced too much water, Marathon said Wednesday it isn’t giving up on the region. EOG Resources also is a player in the Louisiana chalk.
Marathon said it continues to progress with exploration drilling and seismic data acquisition in southern Louisiana. Marathon said it also has taken on Norwaybased
Equinor as a partner in the Louisiana Austin Chalk to help fund the exploration activities.