Marathon Oil Corp.’s natural gas and oil production in 1Q2009 is expected to be 7% higher than it was in the last three months of 2008, the Houston-based producer said Tuesday in an interim quarterly report.

Oil and gas sold in 1Q2009 is estimated at 404,000 boe/d, the company said. Production available for sale is expected to be around 429,000 boe/d, up from 4Q2008’s 402,000 boe/d.

“The available for sale estimate exceeded the 400,000-415,000 boe/d first quarter guidance due to improved reliability across production operations,” including strong performance at an oil development in Norway and an Equatorial Guinea natural gas complex, Marathon stated.

In its U.S. natural gas operations, partial quarterly net sales for January and February were estimated to be 429 MMcf/d, compared with net gas sales of 454 MMcf/d for all three months of 4Q2008. Marathon sold 482 MMcf/d net in 1Q2008.

Domestic average natural gas prices in January and February decreased 25 cents to $4.75/Mcf from $5/Mcf received in 4Q2008. Marathon’s average Henry Hub (HH) prompt natural gas price for 1Q2009 decreased $1.80/MMBtu to $4.58 from $6.38 in 4Q2008, while the average HH bid week gas price decreased $2.04/MMBtu to $4.91.

In its liquefied natural gas operations in Equatorial Guinea and Alaska, Marathon estimated it sold 6,750 metric tons/d (mt/d) net in 1Q2009, which is above earlier guidance of 5,700-6,700 mt/d. Marathon credited the gains to “better than expected reliability.”

Total exploration expenses in 1Q2009 were estimated to be around $654 million, which is within the company’s previous guidance.

Marathon is scheduled to issue its quarterly results on April 30.

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