HOUSTON, Oct 8 (Reuters) - Marathon Oil Corp on Wednesday estimated that its third-quarter oil and natural gas production rose and its refining margins soared about 40 percent from year-earlier levels.
Sales in the quarter were 384,000 barrels of oil equivalent per day, up from 371,000 a year earlier and 350,000 in the prior quarter.
The Houston company said the volume of oil and natural gas available for sale in the period is expected to be 388,000 barrels of oil equivalent per day, above Marathon's initial forecast of 360,000 to 385,000.
"The production was better than I expected, so that's a positive," Phil Weiss, energy analyst with Argus Research, said. "But the downstream news is slightly negative. The volumes are a little bit negative, obviously the hurricanes had an impact."
At the height of disruption, hurricanes Ike and Gustav shuttered nearly all of the oil production from the Gulf of Mexico and disrupted supplies to refineries including Marathon's Midwest plants.
Marathon said its expects its refined products sales volume will average about 1.37 million barrels per day (bpd) in the third quarter compared to 1.44 million a year ago.
The company said its refineries are expected to process 1.15 million bpd compared to 1.24 million in the prior year.
The oil and gas company's refining and wholesale marketing gross margin climbed, helped by a $40-per-barrel drop in the price of crude oil and a gain related to hedging.
Marathon said said it expects its net share of bitumen production before royalties from the Athabasca Oil Sands Project will be about 27,000 bpd in the third quarter, in line with company projections.
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