Marathon Oil sees North American decline

Marathon Oil Corp. said its first quarter production was in line with its expectations, though downside risks may evolve from North American operations.

Total net production for the first quarter of around 388,000 barrels of oil equivalent per day was in line with the upper end of the company's guidance.

Marathon last year sold off some of its acreage in the Gulf of Mexico for $205 million, but said it was keeping its interests in the emerging Shenandoah basin. Shareholder partner Anadarko Petroleum said in 2014 it encountered an oil layer measuring more than 1,000 feet thick while drilling into Shenandoah, quantifying it as a significant discovery.

Elsewhere in North America, Marathon Oil said its average production was down 5 percent from the fourth quarter and 10 percent lower year-on-year because it cut back on drilling activities, even though production costs were 18 percent lower than the previous quarter. Average production was around 239,000 barrels of oil equivalent per day. The company said it expects North American production to be about 4 percent less than that during the second quarter, reflecting lower capital investments.

Marathon Oil President and CEO Lee Tillman said the company is focused on cutting costs where it while at the same time maintaining a robust production outlook.

"With these actions, we're on track to achieve our objective of living within our means in 2016," he said in a statement.

Internationally, the company said its production was about 18 percent lower than the previous quarter, though it expected a second quarter recovery of about 15 percent to at least 115,000 barrels of oil equivalent per day.

For the first quarter, Marathon Oil Corp. reported a net loss of $407 million.