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UPDATE 1-Marathon Oil slashes dividend, capex to save cash

Published 2015-10-29, 11:14 a/m
© Reuters. UPDATE 1-Marathon Oil slashes dividend, capex to save cash
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(Adds capex details, comments)
Oct 29 (Reuters) - U.S. oil producer Marathon Oil Corp (N:MRO) on Thursday said it is slashing its quarterly dividend
76 percent and further reducing capital expenditures to
preserve cash on hand as it tries to withstand a prolonged crude
price slump.
Crude prices have lingered below $50 a barrel for weeks, a
level that renders some shale oil drilling unprofitable. To free
up needed cash, independent oil and gas companies continue to
cut spending, slash jobs and in some cases cut or suspend
quarterly payouts.
In July, Chesapeake Energy Corp (N:CHK) CHK.N , the second-largest
U.S. natural gas producer, said it was suspending dividend
payments.
"We believe the revised dividend appropriately addresses the
uncertainty of a lower for longer commodity price environment,"
Marathon Oil Chief Executive Lee Tillman said in a statement.
Marathon's dividend cut to 5 cents per share from 21 cents
per share is expected to increase annual free cash flow by more
than $425 million, the Houston-company said.
The company is also planning to divest at least $500 million
of non-core assets and said it expects 2015 capital spending to
be reduced by $200 million to $3.1 billion.
Next year, Marathon expects to spend $2.2 billion, a decline
of 29 percent, a figure that would allow the company to keep oil
and gas output flat.
Shares of Marathon Oil rose 48 cents, or nearly 3 percent,
to $18.16 in late morning New York Stock Exchange trading.

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