Marathon reports $793 million loss for the quarter

HOUSTON — Marathon Oil Corp. said Wednesday that plummeting crude oil prices lead to a $793 million in the fourth quarter as the Houston independent took $580 million in writedowns.

For the full-year, Marathon had a $2.2 billion loss, including $1.2 billion in property and goodwill impairments, as the falling value of oil eroded the value of Marathon’s business.

Despite the tough economic environment, Marathon executives said they were able to increase production by 8 percent over the year, after adjusting for asset sales. The company said it produced 432,000 net barrels of oil equivalent each day in the fourth quarter, with about half of the bounty flowing from U.S. wells.

The cost of that production fell sharply. The company estimated that its North American exploration and production costs for each barrel of oil equivalent fell by 28 percent in the fourth quarter when compared to the same period in 2014.

General and administrative costs fell by 40 percent in the final quarter, compared to the year prior. The company said it laid off about 20 percent of its workers during 2015, saving it about $160 million over the year.

In all, Marathon said its full year 2015 capital budget was $3 billion. The final result was about $500 million below the outlay the company originally planned, the company said.

“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, in a written statement. “Even with reduced activity levels and a $3 billion capital program that was 50 percent less than the prior year, we surpassed our total Company and resource play production targets.

Marathon will host a conference call detailing the results Thursday morning.