Marathon Oil misses profit estimates on weak natural gas prices

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August 7, 2024 5:22 PM EDT

FILE PHOTO: A nighttime view of Marathon Petroleum's Los Angeles Refinery, which processes domestic & imported crude oil into gasoline, diesel fuel, and other refined petroleum products, in Carson, California, U.S., March 11, 2022. Picture taken March 11,

(Reuters) - U.S. oil and gas firm Marathon Oil missed Wall Street estimates for second-quarter profit on Wednesday, hurt by a fall in natural gas prices.

U.S. gas prices dropped as mild weather pressured demand and on a rise in stored volumes due to inadequate pipeline capacity.

Marathon Oil said its average realized price for natural gas in the U.S. declined 24.9% to $1.42 per thousand cubic feet (mcf).

A fall in natural gas prices also led to an earnings miss at rival Coterra Energy last week.

Shares of Marathon Oil, which had agreed to sell itself to ConocoPhillips for $22.5 billion in May, fell 1.7% after the bell.

The company said its total quarterly production declined to 393,000 barrels of oil equivalent per day (boepd), compared with 399,000 boepd produced a year earlier, due to a fall in natural gas and liquids output.

"Total company oil and oil-equivalent production are expected to peak during the third quarter, with oil production rising to approximately 200,000 net bpd, before moderating into the fourth quarter," the company said.

Marathon Oil posted adjusted earnings of 63 cents per share for the three months ended June 30, compared with analysts' average estimate of 69 cents per share, according to LSEG data.

(Reporting by Sourasis Bose in Bengaluru; Editing by Mohammed Safi Shamsi and Shilpi Majumdar)


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