Marathon in black; Pioneer, Tellurian fall short

Houston exploration and production company Marathon Oil said Wednesday that it made a profit in the first quarter of 2021 despite the challenges of the coronavirus pandemic and the February winter storm.

The company reported a $97 million profit in the first three months of the year, compared with a $46 million loss during the same period in 2020. Revenue dropped 13 percent to $1.07 billion in the period from $1.23 billion in the first quarter of 2020.

Marathon said it raised its quarterly dividend 33 percent from 3 cents per share to 4 cents per share. The company also reduced its debt in the first quarter by $500 million and is targeting an additional $500 million.

“Our differentiated execution culminated in just under $450 million of free cash flow, with year-to-date free cash flow largely funding $500 million of gross debt reduction,” Marathon President and CEO Lee Tillman said in a Wednesday release.

Tillman said these actions are consistent with the company’s objective to return more than 30 percent of its operating cash flow to investors.

Pioneer Natural Resources

The Permian shale driller on Tuesday said it lost $70 million in the first quarter, compared with a $291 million profit in the same period last year. Revenue increased to $1.8 billion from nearly $1.1 billion a year earlier. During the first quarter, Pioneer completed its $4.5 billion acquisition of Parsley Energy, creating a powerhouse in the Permian Ba

sin of West Texas.

“Pioneer delivered an excellent quarter, successfully integrating Parsley’s assets while navigating the substantial impacts of winter storm Uri,” CEO Scott Sheffield said in a statement.

Some natural gas producers are reporting losses stemming from the winter storm and subsequent power failure, which froze wells and restricted pipelines. Pioneer said its $80 million loss during the storm came from costs incurred by fulfilling natural gas commitments as prices skyrocketed.

Despite the storm, Pioneer said it ended the quarter with $668 million cash on hand and debt of $5.5 billion.

The company said it expects to restart paying a variable dividend to shareholders next year along with its base dividend.

Tellurian

The Houston liquefied natural gas company said it lost $27 million in the first three months of the year, compared with a $41 million loss during the same period in 2020. Revenue rose 6 percent to $8.7 million in the period from $8.2 million in the first quarter of 2020.

Tellurian said its focus during the first quarter was debt reduction, and it has paid all of its loans, according to a Wednesday news release.

In a podcast posted to the company’s website last month, Executive Chairman Charif Souki said Tellurian in late April drilled its first well since 2018, returning to the Haynesville shale in Louisiana.

“At current prices, it makes a lot of sense to resume our drilling program,” Souki said in the podcast.

The company’s $18 billion Driftwood LNG project in Lake Charles, La., holds permits but lacks contracts and financing to begin construction. If built, Driftwood would have the capacity to export nearly 28 million metric tons of LNG per year.

Souki said last month in an email that he expects natural gas demand to grow around the world as more consumers commit to environmental targets.