Marathon Oil Beats Estimates

The firm continued to pursue a $3.2 billion expansion of its Garyville, La., refinery, which will ultimately increase its capacity to 425,000 barrels per day, from 245,000. The project is expected to be completed in late 2009.

Marathon's decline in E&P earnings was caused mostly by "lower liquid hydrocarbon sales volumes, lower liquid hydrocarbon and natural gas realized prices, increased exploration expenses and a higher effective tax rate," according to the press release.

Marathon produced 338,000 barrels of oil equivalent per day in the second quarter, down from 392,000 a year ago. The company said it predicts second-half sales of between 350,000 and 375,000 barrels of oil equivalent per day.

However, the company did realize some successes on the E&P front during the quarter, including three offshore exploration discoveries in Angola.

Although earnings from its integrated gas segment declined in the quarter, Marathon completed a liquefied natural gas facility in Equatorial Guinea during the quarter, six months ahead of schedule.

Marathon Oil was recently trading 3.3% lower at $55.15 a share at the New York Stock Exchange.