HOUSTON (Reuters) - U.S. oil producer Marathon Oil Corp posted a better-than-expected adjusted quarterly profit on Wednesday, helped by rising crude prices and cost cuts, sending its shares up more than 2 percent in extended trading.
Marathon said it plans to raise spending this year slightly from 2017, while hewing closely to a strategy favoring shareholder returns, a topic getting rising attention in the U.S. shale industry.
“In 2018, we expect to improve corporate-level returns from our disciplined development capital program,” Chief Executive Lee Tillman said in a statement.
For the fourth quarter, Marathon posted a net loss of $28 million, or 3 cents per share, compared to a net loss of $1.38 billion, or $1.62 per share, in the year-ago period.
Excluding one-time items, including a loss on hedging of fossil fuel output, Marathon earned 7 cents per share. By that measure, analysts expected earnings of a penny per share, according to Thomson Reuters I/B/E/S.
Production in the quarter rose 12 percent to 383,000 barrels of oil equivalent per day (boe/d). Marathon expects to pump 390,000 to 410,000 boe/d this year.
For 2018, Marathon plans a capital budget of $2.3 billion, up from last year’s $2.2 billion. About 60 percent of that will be spent in North Dakota’s Bakken shale formation and the Eagle Ford shale of East Texas. The rest will be spent in the Permian Basin and projects in Oklahoma.
The budget should be break-even with oil prices at or above $50 per barrel, the company said. U.S. oil prices traded around $60.70 on Wednesday.
Shares of the Houston-based company rose 2.4 percent to $17.36 in after-hours trading.
The company plans to hold a conference call with investors on Thursday morning.
Reporting by Ernest Scheyder; Editing by James Dalgleish and Rosalba O'Brien