(Reuters) - Marathon Oil Corp posted a smaller-than-expected loss on Wednesday as it reined in costs to cushion the impact from the COVID-19 pandemic that has crushed crude prices and sapped demand for fuel.
The oil and gas producer cut its costs and expenses by 17.2% to $975 million as the average realized price for its U.S. crude oil and condensate fell 63.4% to $21.65 per barrel.
U.S. crude prices remain about 32% lower from January levels despite a recent rally, as COVID-19 drained demand and a battle for market share among the world’s top producers flooded the market with oil.
However, with oil prices having rebounded from a dip into negative territory, Marathon raised its production guidance to 190,000 net barrels of oil per day at mid-point, inclusive of year-to-date curtailment. It also cut its full-year capital expenditure to $1.2 billion from $1.3 billion.
Permian producer Parsley Energy Inc also narrowed its 2020 capital budget to between $650 million and $700 million from less than $700 million previously, however it did not reinstate its production guidance citing ongoing uncertainty caused by the coronavirus.
Marathon’s total net production for the quarter fell to 390,000 barrels of oil equivalent per day (boepd) from 435,000 boepd a year ago.
The Houston, Texas based company reported a loss of $750 million, or 95 cents per share, in the second quarter ended June 30, from a profit of $161 million, or 20 cents per share, last year.
Excluding items, Marathon posted a loss of 60 cents per share, smaller than analysts’ estimate of 63 cents per share, according to Refinitiv IBES, while Parsley posted a surprise profit.
Reporting by Arunima Kumar in Bengaluru; Editing by Shailesh Kuber
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