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MRO » Topics » Slide No. 8 demonstrates how domestic upstream income benefited over $100 million from higher prices, while lower volumes reduced operating income in the segment - operating income in the segment by approximately $60 million compared to the secondThis excerpt taken from the MRO 8-K filed Nov 1, 2005. Slide No. 8 demonstrates how domestic upstream income benefited over $100 million from higher prices, while lower volumes reduced operating income in the segment — operating income in the segment by approximately $60 million compared to the second
quarter. Other revenues were $27 million lower during the quarter, primarily as a result of the gain on the sale of East Cameroon block 321 that occurred in the second quarter. Other fluctuations, mainly increased production taxes in the current quarter and second quarter insurance related to Petronius amounted to a negative $17 million.
Total expenses in the domestic upstream segment, as shown on Slide 9, were up $2 per barrel of oil equivalent compared to the second quarter. Excluding exploration expense, which can vary based on the timing of dry holes, expenses were up $2.32 per barrel of oil equivalent from $14.64 to $16.96 per boe. This increase is largely a result of the higher production taxes related to higher commodity prices, increased per barrel operating cost due to reduced volumes, higher G&A allocations, and lower insurance recoveries related to Petronius. For the year, we’d expect on a barrel of oil equivalent basis domestic field level expenses to be $3.35 to $3.40, DD&A of around $6.70, and all other costs, excluding production taxes, to be about $4. At current prices, domestic production taxes are approximately $2.10 per barrel of oil equivalent.
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