Marathon Oil sees quarterly profits increase

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Marathon Oil reported second quarter 2011 net income of US$996mn which was an increase of 28 per cent compared with profits of US$709mn in the same quarter last year.

Marathon Oil recently completed the spin-off of its refining, marketing and transportation business at the end of June 2011.

"Our second quarter financial results, while solid, were negatively impacted by unplanned downtime at key international operations which held our second quarter production to the lower end of guidance. These operations are all back operating at or above expected capacity,” commented Clarence P. Cazalot Jr., Marathon Oil's chairman, president and CEO.

Exploration and Production (E&P) segment saw income jump to US$601mn in the Q2 of 2011, compared to US$432mn in same quarter last year. Integrated Gas segment income was US$43mn in the second quarter of 2011, compared to US$24mn in the second quarter of 2010.

According to a company statement, this increase was primarily the result of higher liquid hydrocarbon price realisations, partially offset by decreased sales volumes in Libya and increased depreciation, depletion and amortization (DD&A).

Excluding Libya, Marathon Oil was underlifted by 333,000 barrels of oil equivalent (boe) in the second quarter compared to a 1,217,000 boe overlift in the same quarter last year.

For the yearly outlook the range of anticipated full-year E&P production available for sale has been narrowed to between 350,000 and 360,000 boepd, which includes an average 7,000 boepd from Libya.

Marathon Oil provided an update on its operations in Iraqi Kurdistan. The company participated in its second discovery in the Iraqi Kurdistan Region during the second quarter. The Swara Tika-1 discovery on the Sarsang block was drilled to a total depth of approximately 12,500 feet and encountered 1,500 feet of gross oil column. Flow rates were established from three zones totaling more than 7,000 barrels of light oil per day (bopd) with associated gas. The flow rates were limited by tubing sizes and testing equipment. Marathon Oil holds a 25 per cent working interest in the Sarsang block.

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