Marathon Oil Corp. said stabilization in commodity prices enabled the company to raise its full-year oil production outlook even as it keeps costs in check and further lowers its capital expenditure (capex) plans.

Houston-based Marathon — which works in Oklahoma, the Delaware Basin and the Bakken and Eagle Ford shales — raised slightly its 2020 oil production guidance to 190,000 net b/d at the midpoint, inclusive of curtailments.

While the super independent’s operations remain largely on hold in Oklahoma and the Delaware following the demand destruction caused by the coronavirus pandemic, it is ramping back up in the Bakken and Eagle Ford.

“After a pause and completion in drilling activity during the second quarter, in July, we successfully transitioned back to work and are currently running three rigs and two frac crews across the Eagle Ford and Bakken,” CEO Lee Tillman said during a second quarter earnings call with analysts.

With West Texas Intermediate crude oil prices recovering to around $40/bbl, Tillman said the third quarter “will be the trough for our 2020 production profile…Our volumes will be on an improving trend by the fourth quarter” and the company expects to “exit 2020 with strong momentum from a core of capital-efficient, high margin production that will provide us with a solid foundation for success as we enter 2021.”

The company reported 2Q2020 capex of $137 million and lowered its full-year capital spending guidance to $1.2 billion from $1.3 billion, about half what it spent in 2019.

“We drove U.S. unit production cost down to $4.09/bbl” in the second quarter, the lowest level since becoming an independent exploration and production company, and “we drove average completed well cost per lateral foot down 10% relative to 2019,” Tillman said.

“We expect to drive further improvement over the second half of the year. Case in point, second half 2020 well cost per lateral foot is expected to be down by more than 20% in comparison to 2019, the result of concentrated capital allocation to the Eagle Ford and Bakken and targeted efforts to continue reducing our costs,” the CEO added. “These reductions are due to a combination of specific well design improvements, execution efficiency, supply chain optimization and commercial leverage. We expect the majority of these gains to prove durable through the cycle.”

Tillman also said the company had implemented a cash cost reduction program and is on track to realize $260 million of savings in 2020, inclusive of second-quarter severance payments. Earlier this year, the company announced pay cuts and layoffs, and slashed its contractor base by 70%.

Marathon this year is driving run rate general and administrative (G&A) costs down 17% from the 2019 average and down 25% from the 2018 average, “continuing a multi-year trend,” according to Tillman. “With the obvious commodity price challenges during the second quarter, we pulled all levers to reduce production costs as quickly and aggressively as possible.”

Marathon’s second quarter net loss was $750 million (minus 95 cents/share), compared with a profit in the year-ago period of $161 million (20 cents).

Total liquidity at the end of June was about $3.5 billion, which consisted of an undrawn revolving credit facility of $3.0 billion and $522 million in cash and cash equivalents.