Marathon Oil Corp. (NYSE:MRO) got off to a strong start in 2018. Through the first half of the year, the company's production from its U.S. resource plays was up 36% year over year, which when combined with stronger oil prices, drove its cash flow 82% higher in the second quarter. That put company on pace to exceed its original production growth forecasts for the full year.

However, the company did say it expected some production headwinds in the third quarter. Those drags on output are among a few things that investors should keep an eye on when the oil company reports its third-quarter earnings later this week.

Oil pump with the evening sun going down.

Image source: Getty Images.

1. Did production meet expectations?

Heading into Q3, Marathon Oil anticipated that it would produce 290,000 to 300,000 barrels of oil equivalent per day (BOE/D) from its U.S. exploration and production (E&P) business, so its output will likely be lower than in Q2,  when it produced 298,000 BOE/D. That slightly lower range forecast was due to the sale of some non-core assets in July, as well as its timing of bringing new wells online.

Meanwhile, the company expected its international output would land in the range of 105,000 to 115,000 BOE/D during the quarter. That would be lower than the 121,000 BOE/D it averaged in Q2, due to planned maintenance at its sites in Equatorial Guinea and in the North Sea off the U.K. coast.

While the company expected its growth engine to slow in Q3, investors should keep an eye on output to see if it was within its guidance range. If not, they'll want to understand exactly what caused production to fall short of those already muted expectations.

2. Is Marathon changing its 2018 plan

Even with that anticipated Q3 speed bump, Marathon Oil expects to deliver robust growth in 2018. It currently estimates that it will produce between 400,000 to 415,000 BOE/D this year, with overall output from its U.S. resources expected to surge by 28% to 32% from 2017's level. That's an increase from its initial outlook that production would range between 390,000 to 410,000 BOE/D for the year, a change made to reflect the company's drilling success in the first half. What's even more impressive about that improved outlook is that the company expects to produce more oil even though it has held firm on its $2.3 billion capital budget for this year.

That ability to stick to its budget is worth noting since several of its peers have boosted their spending levels for 2018 due to service cost inflation and a desire to increase their drilling activities to take advantage of higher oil prices. Giants ConocoPhillips (NYSE:COP) and Anadarko Petroleum (NYSE:APC) are among several U.S. oil companies that have already announced budget increases. ConocoPhillips has increased its spending plan twice, boosting its budget from $5.5 billion to $6.1 billion. Meanwhile, Anadarko Petroleum lifted its spending plan from the $4.2 billion to $4.6 billion range to a $4.5 billion to $4.8 billion range. Given this trend within the industry, investors should be watching the Q3 report to see if Marathon also boosts its budget.

Likewise, investors should also keep an eye on Marathon's production forecast. As mentioned, the company has been able to increase its outlook for the year without boosting its budget, thanks to its strong drilling results. If that trend continued in Q3, the company could once again raise its growth forecast.

3. Keep an eye out for the unexpected

While Marathon Oil got off to a strong start in 2018, investors should expect its momentum to have slowed marginally during Q3 due to asset sales and planned maintenance downtime. That slowdown shouldn't impact its bullish outlook unless something unexpected occurred, which why investors should have an eye out for surprises. Likewise, they should be checking the report for any changes to its spending plan, given that Marathon has been one of the few U.S. oil producers to stick to its budget so far this year. If the company remains on track, investors should feel more confidence in its long-term strategy to create value

Matthew DiLallo owns shares of ConocoPhillips. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.