There was a slight pullback in oil prices following Wednesday’s highs, but the rally is still very much on and bullish sentiment is palpable as summer driving season nears
(Bloomberg) -- Marathon Oil Corp. is giving up its corporate aircraft as the shale driller escalates cost cuts.Just months after announcing plans to shrink his pay package by 25%, Chief Executive Officer Lee Tillman told analysts on Thursday that the company is ditching its aircraft program. Terminating aircraft leases cost Marathon $13 million during during the first three months of the year.Marathon is fielding offers for a Hawker 850XP at a time of robust demand and a shrinking pool of used corporate aircraft for sale, said Janine Iannarelli, founder of boutique jet broker Par Avion Ltd. Shale explorers are facing unprecedented pressure from investors to slash spending and return more profits to shareholders. To that end, Marathon on Wednesday doubled its 2021 debt-reduction target to at least $1 billion.Crowded PlanesMarathon’s other aircraft is leased, according to company spokeswoman Rebecca Skiba. In the past, Marathon has generally lumped aircraft obligations in with leases for drilling rigs, frack pumps and real estate.“We’re really seeing a run on inventory” of available planes, Iannarelli said. “For most makes, less than 10% of the installed base is for sale.” The pandemic has helped drive demand as commercial airlines scaled back routes and executives sought to avoid crowded spaces, she said.Marathon, the fourth-best performer in the S&P 500 this year, fell 3.6% to $11.285 at 2:39 p.m. in New York.(Updates with jet broker’s comments starting in third paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Joining me on today's call are Lee Tillman, our chairman, president, and CEO; Dane Whitehead, executive VP and CFO; Pat Wagner, executive VP of corporate development and strategy; and Mike Henderson, executive VP of operations. Thank you, Guy, and good morning to everyone listening to our call today.