UPDATE 3-Marathon Oil profit up,2010 output seen at low end

* Sees 2010 output at low end of forecast

* Shares down 5.1 percent

* Revenue up 28 pct

* Droshky 2011 production seen at 15,000 boe/day
(Adds analyst comment, byline; updates share price)

By Anna Driver

HOUSTON, Nov 2 (BestGrowthStock) – Marathon Oil Corp (MRO.N: )
posted a 69 percent increase in quarterly profit on Tuesday on
higher crude oil prices and wider refining margins, but said
its 2010 output would be at the low end of its expectations.

Marathon shares were down 5.1 percent in afternoon New York
Stock Exchange trading.

An equipment problem has delayed production at a deepwater
Gulf of Mexico well at Marathon’s Droshky development and
output declines at the project have also been steeper than
expected, the company said.

“The big issue here was certainly the lower volume guidance
for the full year,” said Ann Kohler, an analyst at Caris &

Marathon exploration executive Dave Roberts told analysts
on a conference call the company expects Droshky to average
15,000 barrels oil equivalent (boe) per day, down sharply from
peak production of 45,000 boe per day reached last quarter.

Profits have risen at oil companies as U.S. crude prices
rose 13 percent from a year earlier, while natural gas rose
more than 30 percent. A recovering economy has also increased
demand for fuel, leading to improvement in refining profit.

Houston-based Marathon said its third-quarter profit (Read more your timing to make a profit.) rose
to $696 million, or 98 cents per share, from $413 million, or
58 cents per share, a year earlier.

Excluding items, Marathon earned $1.00 per share, topping
the 95 cents that analysts had on average forecast, according
to Thomson Reuters I/B/E/S.

Revenue rose 28 percent to $18.6 billion.

Average production available for sale rose 3 percent to
405,000 barrels of oil equivalent per day, helped by oil from
Marathon’s Droshky development in the deepwater Gulf Mexico.

For the full year, Marathon expected production at the low
end of its prior forecast for 390,000 to 410,000 boe per day.

Still, the company said it saw production rising 5 percent
in the next two years, with the majority growth coming from its
oil projects, including Bakken Shale in North Dakota and its
Canadian oil sands operations.

Profit from Marathon’s exploration and production unit rose
4 percent to $510 million, while refining earnings soared 80
percent to $285 million.

Marathon shares were off $1.82 at $33.67 on the NYSE.
(Additional reporting by Matt Daily in New York; editing by
Gerald E. McCormick, Lisa Von Ahn and Andre Grenon)

UPDATE 3-Marathon Oil profit up,2010 output seen at low end