Houston-based Marathon Oil Corporation (NYSE: MRO) announced on Wednesday that falling oil prices led to a fourth-quarter net loss of $793 million, bringing their total 2015 adjusted net loss of $869 million.
Total fourth-quarter revenue was $1.48 billion, beating analysts' expectations of $1.17 billion.
Despite its net loss, which was largely driven by $580 million in writedowns due to the low price of crude oil, Marathon reported that due to lower production costs per barrel, the company was still able to surpass 2015 production targets, ending 2015 with an 8 percent production growth overall (excluding Libya).
Marathon added 247 million barrels of oil equivalent in 2015, ending the year with 2.2 billion barrels of oil equivalent of net proved reserves.
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The gain in production was in part due to a 20 percent increase in Oklahoma unconventional volumes, and flat production in its Eagle Ford plays.
Workforce cuts of 20 percent resulted in $160 million in annualized net savings for Marathon, and overall, fourth-quarter capital spend and production costs came in better than expectations. The announcement also stated that Marathon was cutting its 2016 capital program by half, down to $1.4 billion. This amount includes $1.15 billion for its North American activity, with a focus on Eagle Ford, Oklahoma Resource Basins, and the Bakken, and $170 million that will be reserved for international assets.
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Marathon is also set to drastically reduce its exploration spending to $30 million, down from its $250 million budget in 2015, and $500 million budget for 2014.
"Our actions early in the cycle on production expenses and G&A reset our cost structure and positioned us to realize full year benefits in 2016. " said Marathon Oil President and CEO Lee Tillman.
On tap for Marathon in 2016 is the startup of its Alba field compression project in Equatorial Guinea.
Marathon's shares were down more than 8 percent on Thursday morning trading.
By James Burgess of Oilprice.com
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