Project: MIDSHIP Project
Firm Commitment: 250 Mmcf/d
COST: 3 $B
VOLUMES: 67 MBOE/d
ACRES: 130000 Acres
COST: 700 $MM
VOLUMES: 400 BOE/d
ACRES: 21000 Acres
COST: 2.5 $B
VOLUMES: 48 MBOE/d
COST: 1.1 $B
VOLUMES: 5 MBOE/d
ACRES: 70000 Acres
COST: 888 $MM
VOLUMES: 9 MBOE/d
ACRES: 61000 Acres
COST: 870 $MM
VOLUMES: 16.5 MBOE/d
HOUSTON, Jan. 27, 2021 /PRNewswire/ -- Marathon Oil Corporation (NYSE: MRO) today announced an update regarding its environmental, social, and governance (ESG) performance, including significant changes to its executive compensation framework as well as new quantitative greenhouse gas (GHG) emissions reduction initiatives. The Company believes continuously improving all elements of its ESG performance is essential to successfully executing its long-term strategy of maximizing shareholder value, including the delivery of strong financial returns and sustainable free cash flow while maintaining a solid balance sheet and returning capital to shareholders.
Highlights
"To realize improved outcomes for all stakeholders, we believe energy companies must deliver competitive financial results relative to the S&P 500 while simultaneously driving meaningful improvement to all elements of ESG performance," said President, CEO and Chairman Lee Tillman. "Marathon Oil has taken a leadership role in driving the changes our industry needs, prioritizing free cash flow, debt reduction, and return of capital to shareholders. We believe strong corporate governance is foundational to delivering ultimate shareholder value, and have modified our executive compensation framework to further align management interests with stakeholders and to incentivize the behaviors we believe are most important. We are also announcing an ambitious goal to meaningfully reduce our GHG emissions intensity by 2025, building on the momentum we established in 2020. We believe oil and gas will be an essential contributor to the transition to a lower carbon future and it is imperative that the Company and our industry address the dual challenge of meeting the world's growing energy demand while also responding to the risk of climate change."
Governance and Executive Compensation
Marathon Oil is fully committed to best-in-class corporate governance as its foundation for executing its long-term strategy. The Company has modified its executive compensation framework to enhance executive alignment with shareholders, incentivize achievement of its core strategic objectives, and encourage the behaviors the Company believes are most likely to maximize long-term shareholder value.
More specifically, the Company is reducing annual Board compensation by 25% with the mix shifted more toward equity. The Company is also reducing CEO total direct compensation by 25%, including a 35% reduction to long-term incentive (LTI) awards. These changes are intended to better align CEO compensation quantum and mix with the broader industry and current business environment. Other senior officers will also participate in total compensation reductions and the Company's revised compensation program.
Marathon Oil's short-term incentive (STI) annual cash bonus scorecard has been restructured to better reflect the Company's financial and ESG framework. The scorecard has been simplified to prioritize performance in 5 areas deemed critical for long-term shareholder value creation: 1) safety (total recordable incident rate); 2) environmental (GHG emissions intensity); 3) capital efficiency (corporate free cash flow breakeven); 4) capital discipline/free cash flow (reinvestment rate), and 5) financial/balance sheet strength (cash flow per debt adjusted share). All production and growth metrics have been eliminated from the Company's annual bonus scorecard.
Additionally, the Company has revised its LTI compensation framework, now focused on three vehicles, all of which are denominated in shares: restricted stock units (RSUs), relative total shareholder returns performance stock units (TSR PSUs), and free cash flow performance stock units (FCF PSUs). The revised framework is intended to mitigate an overreliance on relative TSR against direct E&P peers by introducing the S&P 500 and S&P Energy indices as peer comparators within the relative TSR calculation to promote improved performance vs. the broader market. Additionally, the introduction of FCF PSUs further diversifies the LTI performance metrics and underscores the Company's priority to generate sustainable free cash flow.
As announced previously, in January, the Company appointed Brent Smolik, formerly of Noble Energy Corporation, to its Board of Directors. Over half of the Company's directors have now been appointed to their positions since 2018, with average director tenure less than five years, well below the S&P 500 average for 2020. Eight of nine directors are independent and all committees are made up of entirely NYSE independent directors. In addition to strong refreshment and independence, the Board of Directors includes a diversity of perspectives. Two of nine directors, including the chairs of the Audit and Finance and Health, Environmental, Safety, and Corporate Responsibility (HESCR) Committees, are female. Two of nine directors self-identify as an ethnicity other than Caucasian/White.
Environmental
Reducing greenhouse gas (GHG) emissions intensity is central to Marathon Oil's strategic goals of minimizing its environmental impact, addressing the risks of climate change, and delivering strong long-term financial performance.
During 2020, the Company made significant progress in improving its environmental performance, achieving an estimated 20% reduction to its GHG emissions intensity relative to 2019 and improving total Company gas capture to approximately 98.5% for fourth quarter 2020.
For 2021, the Company has established a quantitative GHG intensity target, representing a reduction of more than 30% relative to 2019, which has been added to the Company's executive compensation STI scorecard. Further, Marathon Oil has disclosed a new medium-term goal highlighting the Company's commitment to significant ongoing improvement to its environmental performance. By 2025, the Company's goal is to reduce its GHG intensity by more than 50% relative to 2019. The Company has already identified concrete steps to assist in achieving this improvement, including but not limited to continued replacement of pneumatic controllers with lower emitting technology, connecting additional sites to utility power, and investing in soil carbon sequestration to offset emissions.
Safety
Marathon Oil views safety as a core value and a key component of its ESG performance, as keeping its workforce safe, both employees and contractors, is and always will be a top priority. Importantly, 2020 represented the Company's second consecutive year of record safety performance, as measured by TRIR. As noted above, peer leading safety performance will remain a component of the Company's executive compensation scorecard.
Methodology and definitions for GHG emissions and safety performance are based on information from the Company's 2019 MRO Sustainability Report that can be found on the Company's website. The Company reports direct (Scope 1) and indirect (Scope 2) GHG emissions, with emissions intensity measured by metric tonnes carbon dioxide equivalent (CO2e) emissions per thousand barrels of oil equivalent of hydrocarbons produced from Marathon Oil-operated facilities.
Footnotes:
1: Exclusive of temporary reductions announced in 2020
2: Preliminary estimate subject to final calculation
Forward-looking Statements
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, including without limitation statements regarding the Company's future capital budgets and allocations, GHG emissions reduction initiatives, targets or goals, future performance, business strategy and other plans and objectives for future operations, are forward-looking statements. Words such as "anticipate," "believe," "could," "estimate," "expect," "forecast," "future," "goal," "guidance," "intend," "may," "outlook," "plan," "positioned," "project," "seek," "should," "target," "will," "would," or similar words may be used to identify forward-looking statements; however, the absence of these words does not mean that the statements are not forward-looking. While the Company believes its assumptions concerning future events are reasonable, a number of factors could cause actual results to differ materially from those projected, including, but not limited to: conditions in the oil and gas industry, including supply/demand levels for crude oil and condensate, NGLs and natural gas and the resulting impact on price; changes in expected reserve or production levels; changes in political or economic conditions in the U.S. and Equatorial Guinea, including changes in foreign currency exchange rates, interest rates, inflation rates; actions taken by the members of the Organization of the Petroleum Exporting Countries (OPEC) and Russia affecting the production and pricing of crude oil; and other global and domestic political, economic or diplomatic developments; capital available for exploration and development; risks related to the Company's hedging activities; voluntary or involuntary curtailments, delays or cancellations of certain drilling activities; well production timing; liability resulting from litigation; drilling and operating risks; lack of, or disruption in, access to storage capacity, pipelines or other transportation methods; availability of drilling rigs, materials and labor, including the costs associated therewith; difficulty in obtaining necessary approvals and permits; non-performance by third parties of contractual obligations; unforeseen hazards such as weather conditions, a health pandemic (including COVID-19), acts of war or terrorist acts and the government or military response thereto; cyber-attacks; changes in safety, health, environmental, tax and other regulations, requirements or initiatives, including initiatives addressing the impact of global climate change, air emissions, or water management; other geological, operating and economic considerations; and the risk factors, forward-looking statements and challenges and uncertainties described in the Company's 2019 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other public filings and press releases, available at https://ir.marathonoil.com/. Except as required by law, the Company undertakes no obligation to revise or update any forward-looking statements as a result of new information, future events or otherwise.
Media Relations Contact:
Stephanie Gentry: 832-206-3746
Investor Relations Contacts:
Guy Baber: 713-296-1892
John Reid: 713-296-4380
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SOURCE Marathon Oil Corporation
HOUSTON, Jan. 27, 2021 /PRNewswire/ -- Marathon Oil Corporation (NYSE: MRO) announced today that the Company's board of directors has declared a dividend of 3 cents per share on Marathon Oil Corporation common stock. The dividend is payable on March 10, 2021, to stockholders of record on February 17, 2021.
For more information on Marathon Oil Corporation, visit the Company's website at https://www.marathonoil.com.
Media Relations Contact:
Stephanie Gentry: 832-206-3746
Investor Relations Contacts:
Guy Baber: 713-296-1892
John Reid: 713-296-4380
View original content to download multimedia:http://www.prnewswire.com/news-releases/marathon-oil-corporation-declares-fourth-quarter-2020-dividend-301216510.html
SOURCE Marathon Oil Corporation
HOUSTON, Jan. 20, 2021 /PRNewswire/ -- Marathon Oil Corporation (NYSE: MRO) announced today it plans to issue its fourth quarter and full-year 2020 earnings news release and details of the company's 2021 capital program on Wednesday, Feb. 17, after the close of U.S. financial markets.
The company will conduct a conference call, which will be webcast live, on Thursday, Feb. 18, at 9 a.m. ET. The call will include forward-looking information.
All of the above information, including earnings releases and other investor-related material, can be accessed by visiting Marathon Oil's website at https://www.MarathonOil.com.
Media Relations Contact:
Stephanie Gentry: 832-206-3746
Investor Relations Contacts:
Guy Baber: 713-296-1892
John Reid: 713-296-4380
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SOURCE Marathon Oil Corporation
HOUSTON, Jan. 11, 2021 /PRNewswire/ -- Marathon Oil Corporation (NYSE:MRO) announced today that Brent Smolik has been elected to the Company's board of directors, effective January 11, 2021.
"We are pleased to welcome Brent to Marathon's board of directors," said Chairman, President and CEO Lee Tillman. "The addition of Brent complements our board of directors' skills and experiences, and we believe he will provide a valuable perspective as we continue to execute our strategy of delivering competitive and improving corporate level returns, prioritizing sustainable cash flow generation, and returning capital to shareholders."
Mr. Smolik, 59, has over 35 years of experience in the oil and natural gas industry, including senior executive leadership roles at Noble Energy Corporation, Noble Midstream Partners LP, EP Energy Corporation, El Paso Corporation, ConocoPhillips and Burlington Resources, Inc. He retired from his role as president and chief operating officer at Noble Energy, following its merger with Chevron in 2020. Mr. Smolik previously served on the boards of Noble Midstream Partners LP, Cameron International and EP Energy Corporation.
Media Relations Contact
Stephanie Gentry: 713-296-3307
Investor Relations Contacts
Guy Baber: 713-296-1892
John Reid: 713-296-4380
View original content to download multimedia:http://www.prnewswire.com/news-releases/brent-smolik-elected-to-marathon-oil-corporation-board-of-directors-301205646.html
SOURCE Marathon Oil Corporation
HOUSTON, Nov. 4, 2020 /PRNewswire/ -- Marathon Oil Corporation (NYSE:MRO) today reported a third quarter 2020 net loss of $317 million, or $0.40 per diluted share, which includes the impact of certain items not typically represented in analysts' earnings estimates and that would otherwise affect comparability of results. The adjusted net loss was $219 million, or $0.28 per diluted share. Net operating cash flow was $345 million, or $352 million before changes in working capital.
Highlights
"While we continue to manage through commodity price volatility and the ongoing COVID-19 pandemic, third quarter represented an inflection point in what has been a transitional year, highlighted by $180 million of free cash flow generation on strong execution across all elements of our business," said Chairman, President, and CEO Lee Tillman. "We believe our unwavering focus on how we allocate capital, how we manage our cost structure, and how we execute is clearly paying off. Third quarter free cash flow more than funded the reinstatement of our base dividend and a gross debt reduction of $100 million, consistent with our objective to return capital to shareholders and enhance our balance sheet. We are well positioned to continue doing both in the current environment."
"We have also committed to a transparent capital allocation framework that provides visibility to compelling free cash flow generation and the dedication of meaningful cash flow to investor-friendly purposes," continued Tillman. "Beyond just a commitment, we have a unique track record of delivery on this framework since 2018. We believe we have successfully positioned our company for industry leading capital efficiency and sustainable free cash flow generation at lower and more volatile mid-cycle pricing."
United States (U.S.)
U.S. production averaged 297,000 net barrels of oil equivalent per day (boed) for third quarter 2020. Oil production averaged 159,000 net barrels of oil per day (bopd). U.S. unit production costs were $4.32 per boe, a reduction of approximately 13% in comparison to the 2019 average.
Third quarter marked a successful and efficient resumption in drilling and completion activity for Marathon Oil following the full pause in activity during second quarter. During third quarter, the Company brought a total of 18 gross Company-operated wells to sales and delivered an average completed well cost per lateral foot reduction of more than 25% in comparison to the 2019 average. Consistent with prior guidance, second half 2020 gross Company-operated wells to sales will be weighted to fourth quarter.
In the Eagle Ford, Marathon Oil's third quarter 2020 production averaged 91,000 net boed. Oil production averaged 53,000 net bopd on 9 gross Company-operated wells to sales. In the Bakken, production averaged 98,000 net boed, including oil production of 69,000 net bopd. The Company brought 8 gross Company-operated wells to sales during third quarter in the Bakken. Oklahoma production averaged 73,000 net boed in the third quarter 2020, including oil production of 18,000 net bopd. Northern Delaware production averaged 26,000 net boed in the third quarter 2020. Oil production averaged 14,000 net bopd on 1 gross Company-operated well to sales.
International
Equatorial Guinea production averaged 73,000 net boed for third quarter 2020, including 13,000 net bopd of oil. Unit production costs averaged $1.76 per boe.
Guidance
Marathon Oil reduced its full year unit production operating expense guidance for both U.S. and International segments by over 5% and 8% respectively. The Company also raised its full year U.S. oil-equivalent production guidance by 5,000 net boed at the midpoint.
Marathon Oil's full year 2020 capital spending guidance and midpoint of oil production guidance remain unchanged.
Disciplined Capital Allocation Framework
Marathon Oil recently provided an update on a transparent capital allocation framework that prioritizes sustainable free cash flow generation across a broad range of commodity prices.
In a $40 to $45/bbl WTI oil price environment, the Company plans to target a total capital spending reinvestment rate of approximately 70% to 80% of cash flow from operations, with 20% to 30% of cash flow available for investor-friendly purposes - prioritizing balance sheet enhancement and return of capital to shareholders.
In an oil price environment above $45/bbl WTI, Marathon Oil plans to target a total capital reinvestment rate of approximately 70% or less of cash flow from operations, with 30% or more of cash flow available for investor-friendly purposes.
Marathon Oil's resilience to lower commodity prices is underpinned by a free cash flow breakeven below $35/bbl WTI in its 2021 benchmark maintenance scenario. This maintenance scenario would deliver total Company 2021 oil production in line with the fourth quarter 2020 for approximately $1 billion in total capital spending.
In all commodity price environments, the Company will continue to prioritize free cash flow generation and corporate returns improvement. While production growth will remain an output of the Company's capital allocation process, growth will be capped at 5% in higher price environments, underscoring a commitment to capital discipline and free cash flow generation.
Corporate
Net cash provided by operations was $345 million during third quarter 2020, or $352 million before changes in working capital. Third quarter capital expenditures totaled $176 million.
Total liquidity as of September 30 was approximately $4.1 billion, which consisted of an undrawn revolving credit facility of $3.0 billion and $1.1 billion in cash and cash equivalents. The third quarter ending cash balance included the remarketing of $400 million tax exempt bonds at a weighted interest rate of 2.25%.
Subsequent to the end of third quarter and consistent with prior announcements, Marathon Oil reinstated a quarterly dividend at 3 cents per share and completed a cash tender for an aggregate principal amount of $500 million of its outstanding $1 billion 2.8% Senior Notes due November 2022.
The tender proactively reduced the Company's next significant debt maturity and resulted in a gross debt reduction of $100 million. Both the fourth quarter dividend payment and gross debt reduction were more than fully funded by third quarter free cash flow generation of $180 million.
The adjustments to net loss for third quarter 2020 totaled $98 million, primarily due to unrealized losses on derivative instruments, the income impact associated with an equity method investment impairment, pension settlement, and other non-recurring costs.
A slide deck and Quarterly Investor Packet will be posted to the Company's website following this release today, November 4. On Thursday, November 5, at 9:00 a.m. ET, the Company will conduct a question and answer webcast/call, which will include forward-looking information. The live webcast, replay and all related materials will be available at https://ir.marathonoil.com/.
Non-GAAP Measures
In analyzing and planning for its business, Marathon Oil supplements its use of GAAP financial measures with non-GAAP financial measures, including adjusted net income (loss), adjusted net income (loss) per share, free cash flow, net cash provided by operations before changes in working capital and capital reinvestment rate.
Adjusted net income (loss) is defined as net income (loss) adjusted for gain/loss on dispositions, impairments of proved property, goodwill, and equity method investments, unrealized derivative gain/loss on commodity instruments, effects of pension settlement losses and curtailments and other items that could be considered "non-operating" or "non-core" in nature. Management believes adjusted net income (loss) and adjusted net income (loss) per share are useful to investors as additional tools to meaningfully represent the Company's operating performance and to compare Marathon to certain competitors.
Free cash flow, which is free cash flow before dividend, is defined as net cash provided by operating activities adjusted for working capital, exploration costs other than well costs, capital expenditures, and EG LNG return of capital and other. Management believes this is useful to investors as a measure of the Company's ability to fund its capital expenditure programs, service debt, and other distributions to stockholders.
Management believes net cash provided by operations before changes in working capital is useful to investors to demonstrate the Company's ability to generate cash quarterly or year-to-date by eliminating differences caused by the timing of certain working capital items.
Capital spending reinvestment rate is defined as total capital expenditures divided by operating cash flow before working capital. Management believes the capital spending reinvestment rate is useful to investors to demonstrate the Company's commitment to generating cash for use towards investor friendly purposes (which includes balance sheet enhancement, base dividend and other return of capital).
These non-GAAP financial measures reflect an additional way of viewing aspects of the business that, when viewed with GAAP results may provide a more complete understanding of factors and trends affecting the business and are a useful tool to help management and investors make informed decisions about Marathon Oil's financial and operating performance. These measures should not be considered in isolation or as an alternative to their most directly comparable GAAP financial measures. A reconciliation to their most directly comparable GAAP financial measures can be found in our investor package on our website at https://ir.marathonoil.com/ and in the tables below. Marathon Oil strongly encourages investors to review the Company's consolidated financial statements and publicly filed reports in their entirety and not rely on any single financial measure.
Forward-looking Statements
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, including without limitation statements regarding the Company's future capital budgets and allocations (including development capital budget and resource play leasing and exploration spend), future performance, corporate-level cash returns on invested capital, business strategy, asset quality, drilling plans, production guidance, cash margins, asset sales and acquisitions, leasing and exploration activities, production, oil growth and other plans and objectives for future operations, are forward-looking statements. Words such as "anticipate," "believe," "could," "estimate," "expect," "forecast," "future," "guidance," "intend," "may," "outlook," "plan," "positioned," "project," "seek," "should," "target," "will," "would," or similar words may be used to identify forward-looking statements; however, the absence of these words does not mean that the statements are not forward-looking. While the Company believes its assumptions concerning future events are reasonable, a number of factors could cause actual results to differ materially from those projected, including, but not limited to: conditions in the oil and gas industry, including supply/demand levels for crude oil and condensate, NGLs and natural gas and the resulting impact on price; changes in expected reserve or production levels; changes in political or economic conditions in the U.S. and Equatorial Guinea, including changes in foreign currency exchange rates, interest rates, inflation rates; actions taken by the members of the Organization of the Petroleum Exporting Countries (OPEC) and Russia affecting the production and pricing of crude oil; and other global and domestic political, economic or diplomatic developments; capital available for exploration and development; risks related to the Company's hedging activities; voluntary or involuntary curtailments, delays or cancellations of certain drilling activities; well production timing; liability resulting from litigation; drilling and operating risks; lack of, or disruption in, access to storage capacity, pipelines or other transportation methods; availability of drilling rigs, materials and labor, including the costs associated therewith; difficulty in obtaining necessary approvals and permits; non-performance by third parties of contractual obligations; unforeseen hazards such as weather conditions, a health pandemic (including COVID-19), acts of war or terrorist acts and the government or military response thereto; cyber-attacks; changes in safety, health, environmental, tax and other regulations, requirements or initiatives, including initiatives addressing the impact of global climate change, air emissions, or water management; other geological, operating and economic considerations; and the risk factors, forward-looking statements and challenges and uncertainties described in the Company's 2019 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other public filings and press releases, available at https://ir.marathonoil.com/. Except as required by law, the Company undertakes no obligation to revise or update any forward-looking statements as a result of new information, future events or otherwise.
Media Relations Contact:
Stephanie Gentry: 713-296-3307
Investor Relations Contacts:
Guy Baber: 713-296-1892
John Reid: 713-296-4380
Consolidated Statements of Income (Unaudited) | Three Months Ended | ||||||||
Sept. 30 | June 30 | Sept. 30 | |||||||
(In millions, except per share data) | 2020 | 2020 | 2019 | ||||||
Revenues and other income: | |||||||||
Revenues from contracts with customers | $ | 761 | $ | 490 | $ | 1,249 | |||
Net gain (loss) on commodity derivatives | (1) | (70) | 47 | ||||||
Income (loss) from equity method investments | (10) | (152) | 21 | ||||||
Net gain (loss) on disposal of assets | 1 | (2) | 22 | ||||||
Other income | 3 | 6 | 6 | ||||||
Total revenues and other income | 754 | 272 | 1,345 | ||||||
Costs and expenses: | |||||||||
Production | 129 | 129 | 163 | ||||||
Shipping, handling and other operating | 183 | 105 | 138 | ||||||
Exploration | 27 | 26 | 22 | ||||||
Depreciation, depletion and amortization | 554 | 597 | 622 | ||||||
Impairments | 1 | — | — | ||||||
Taxes other than income | 49 | 30 | 81 | ||||||
General and administrative | 53 | 88 | 82 | ||||||
Total costs and expenses | 996 | 975 | 1,108 | ||||||
Income (loss) from operations | (242) | (703) | 237 | ||||||
Net interest and other | (62) | (69) | (64) | ||||||
Other net periodic benefit (costs) credits | (6) | 7 | 2 | ||||||
Income (loss) before income taxes | (310) | (765) | 175 | ||||||
Provision (benefit) for income taxes | 7 | (15) | 10 | ||||||
Net income (loss) | $ | (317) | $ | (750) | $ | 165 | |||
Adjusted Net Income (Loss) | |||||||||
Net income (loss) | $ | (317) | $ | (750) | $ | 165 | |||
Adjustments for special items (pre-tax): | |||||||||
Net (gain) loss on disposal of assets | (1) | 2 | (22) | ||||||
Proved property impairments | 1 | — | — | ||||||
Pension settlement | 9 | 14 | — | ||||||
Pension curtailment | — | (17) | — | ||||||
Unrealized (gain) loss on derivative instruments | 36 | 96 | (33) | ||||||
Reduction in workforce | 2 | 13 | — | ||||||
Impairment of equity method investment | 18 | 152 | — | ||||||
Other | 34 | 13 | 1 | ||||||
Benefit for income taxes related to special items | (1) | — | — | ||||||
Adjustments for special items | 98 | 273 | (54) | ||||||
Adjusted net income (loss) (a) | $ | (219) | $ | (477) | $ | 111 | |||
Per diluted share: | |||||||||
Net income (loss) | $ | (0.40) | $ | (0.95) | $ | 0.21 | |||
Adjusted net income (loss) (a) | $ | (0.28) | $ | (0.60) | $ | 0.14 | |||
Weighted average diluted shares | 790 | 790 | 803 |
(a) Non-GAAP financial measure. See "Non-GAAP Measures" above for further discussion. |
Supplemental Statistics (Unaudited) | Three Months Ended | ||||||||
Sept. 30 | June 30 | Sept. 30 | |||||||
(In millions) | 2020 | 2020 | 2019 | ||||||
Segment income (loss) | |||||||||
United States | $ | (135) | $ | (365) | $ | 180 | |||
International | 8 | (6) | 43 | ||||||
Not allocated to segments | (190) | (379) | (58) | ||||||
Net income (loss) | $ | (317) | $ | (750) | $ | 165 | |||
Cash flows | |||||||||
Net cash provided by operating activities | $ | 345 | $ | 9 | $ | 737 | |||
Changes in working capital | 7 | 77 | 20 | ||||||
Net cash provided by operating activities before changes in working capital (a) | $ | 352 | $ | 86 | $ | 757 | |||
Free Cash Flow | |||||||||
Net cash provided by operating activities before changes in working capital (a) | $ | 352 | $ | 86 | $ | 757 | |||
Adjustments for free cash flow: | |||||||||
Exploration costs other than well costs | 4 | 8 | 6 | ||||||
Capital expenditures | (176) | (137) | (646) | ||||||
EG LNG return of capital and other | — | — | 4 | ||||||
Free Cash Flow (a) | $ | 180 | $ | (43) | $ | 121 | |||
Cash additions to property, plant and equipment | $ | (144) | $ | (326) | $ | (672) |
(a) Non-GAAP financial measure. See "Non-GAAP Measures" above for further discussion. |
Supplemental Statistics (Unaudited) | Three Months Ended | Year Ended | ||||||
Sept. 30 | June 30 | Sept. 30 | Dec. 31 | |||||
Net Production | 2020 | 2020 | 2019 | 2019 | ||||
Equivalent Production (mboed) | ||||||||
United States | 297 | 307 | 339 | 324 | ||||
International | 73 | 83 | 87 | 92 | ||||
Total net production | 370 | 390 | 426 | 416 | ||||
Less: Divestitures (a) | — | — | 1 | 8 | ||||
Total divestiture-adjusted net production | 370 | 390 | 425 | 408 | ||||
Oil Production (mbbld) | ||||||||
United States | 159 | 182 | 201 | 191 | ||||
International | 13 | 15 | 15 | 21 | ||||
Total net production | 172 | 197 | 216 | 212 | ||||
Less: Divestitures (b) | — | — | — | 6 | ||||
Total divestiture-adjusted net production | 172 | 197 | 216 | 206 |
(a) | Divestitures include volumes associated with the following: (i) 1 mboed for both the third quarter 2019 and the year 2019 related to the sale of certain United States non-core conventional assets which closed in first quarter 2019 (ii) 6 mboed for the year 2019 related to the sale of our U.K. business which closed in third quarter 2019 and (iii) 1 mboed for the year 2019 related to the sale of our non-operated interest in the Atrush block in Kurdistan which closed in second quarter 2019. |
(b) | Divestitures for the year ended 2019 include 5 mbbld related to the sale of our U.K. business which closed in third quarter 2019 and 1 mbbld related to the sale of our non-operated interest in the Atrush block in Kurdistan which closed in second quarter 2019. |
Supplemental Statistics (Unaudited) | Three Months Ended | |||||
Sept. 30 | June 30 | Sept. 30 | ||||
2020 | 2020 | 2019 | ||||
United States - net sales volumes | ||||||
Crude oil and condensate (mbbld) | 159 | 183 | 201 | |||
Eagle Ford | 53 | 66 | 63 | |||
Bakken | 69 | 81 | 92 | |||
Oklahoma | 18 | 16 | 23 | |||
Northern Delaware | 15 | 16 | 18 | |||
Other United States (a) | 4 | 4 | 5 | |||
Natural gas liquids (mbbld) | 68 | 56 | 61 | |||
Eagle Ford | 20 | 20 | 22 | |||
Bakken | 16 | 12 | 9 | |||
Oklahoma | 25 | 16 | 23 | |||
Northern Delaware | 5 | 7 | 6 | |||
Other United States (a) | 2 | 1 | 1 | |||
Natural gas (mmcfd) | 421 | 413 | 462 | |||
Eagle Ford | 111 | 133 | 134 | |||
Bakken | 76 | 60 | 46 | |||
Oklahoma | 179 | 167 | 229 | |||
Northern Delaware | 40 | 44 | 36 | |||
Other United States (a) | 15 | 9 | 17 | |||
Total United States (mboed) | 297 | 308 | 339 | |||
International - net sales volumes | ||||||
Crude oil and condensate (mbbld) | 11 | 16 | 16 | |||
Equatorial Guinea | 11 | 16 | 16 | |||
Natural gas liquids (mbbld) | 8 | 9 | 10 | |||
Equatorial Guinea | 8 | 9 | 10 | |||
Natural gas (mmcfd) | 310 | 354 | 373 | |||
Equatorial Guinea | 310 | 354 | 373 | |||
Total International (mboed) | 71 | 84 | 88 | |||
Total Company - net sales volumes (mboed) | 368 | 392 | 427 | |||
Net sales volumes of equity method investees | ||||||
LNG (mtd) | 3,960 | 4,635 | 4,590 | |||
Methanol (mtd) | 1,065 | 738 | 1,036 | |||
Condensate and LPG (boed) | 9,340 | 10,896 | 11,586 |
(a) Includes sales volumes from the sale of certain non-core proved properties in our United States segment. |
Supplemental Statistics (Unaudited) | Three Months Ended | ||||||||
Sept. 30 | June 30 | Sept. 30 | |||||||
2020 | 2020 | 2019 | |||||||
United States - average price realizations (a) | |||||||||
Crude oil and condensate ($ per bbl) (b) | $ | 37.78 | $ | 21.65 | $ | 55.09 | |||
Eagle Ford | 38.79 | 23.53 | 57.99 | ||||||
Bakken | 36.28 | 20.03 | 53.48 | ||||||
Oklahoma | 38.49 | 22.09 | 55.09 | ||||||
Northern Delaware | 40.18 | 22.36 | 54.16 | ||||||
Other United States (c) | 38.51 | 18.31 | 51.74 | ||||||
Natural gas liquids ($ per bbl) | $ | 11.80 | $ | 7.09 | $ | 11.37 | |||
Eagle Ford | 12.07 | 8.70 | 11.40 | ||||||
Bakken | 10.26 | 2.56 | 7.16 | ||||||
Oklahoma | 12.15 | 8.67 | 13.20 | ||||||
Northern Delaware | 13.65 | 6.24 | 10.02 | ||||||
Other United States (c) | 12.17 | 9.68 | 15.21 | ||||||
Natural gas ($ per mcf) | $ | 1.78 | $ | 1.44 | $ | 1.92 | |||
Eagle Ford | 1.79 | 1.69 | 2.29 | ||||||
Bakken | 1.26 | 0.93 | 1.83 | ||||||
Oklahoma | 2.03 | 1.59 | 1.75 | ||||||
Northern Delaware | 1.53 | 0.88 | 0.84 | ||||||
Other United States (c) | 1.90 | 1.25 | 3.69 | ||||||
International - average price realizations | |||||||||
Crude oil and condensate ($ per bbl) | $ | 30.28 | $ | 13.79 | $ | 46.04 | |||
Equatorial Guinea | 30.28 | 13.79 | 46.04 | ||||||
Natural gas liquids ($ per bbl) | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||
Equatorial Guinea (d) | 1.00 | 1.00 | 1.00 | ||||||
Natural gas ($ per mcf) | $ | 0.24 | $ | 0.24 | $ | 0.24 | |||
Equatorial Guinea (d) | 0.24 | 0.24 | 0.24 | ||||||
Benchmark | |||||||||
WTI crude oil (per bbl) | $ | 40.92 | $ | 28.00 | $ | 56.44 | |||
Brent (Europe) crude oil (per bbl) (e) | $ | 42.96 | $ | 29.34 | $ | 61.93 | |||
Mont Belvieu NGLs (per bbl) (f) | $ | 15.87 | $ | 12.25 | $ | 15.16 | |||
Henry Hub natural gas (per mmbtu) (g) | $ | 1.98 | $ | 1.72 | $ | 2.23 |
(a) | Excludes gains or losses on commodity derivative instruments. |
(b) | Inclusion of realized gains (losses) on crude oil derivative instruments would have increased average price realizations by $2.24, $1.59, and $0.72, for the third quarter 2020, the second quarter 2020, and the third quarter 2019. |
(c) | Includes sales volumes from the sale of certain non-core proved properties in our United States segment. |
(d) | Represents fixed prices under long-term contracts with Alba Plant LLC, Atlantic Methanol Production Company LLC and/or Equatorial Guinea LNG Holdings Limited, which are equity method investees. The Alba Plant LLC processes the NGLs and then sells secondary condensate, propane, and butane at market prices. Marathon Oil includes its share of income from each of these equity method investees in the International segment. |
(e) | Average of monthly prices obtained from Energy Information Administration website. |
(f) | Bloomberg Finance LLP: Y-grade Mix NGL of 55% ethane, 25% propane, 5% butane, 8% isobutane and 7% natural gasoline. |
(g) | Settlement date average per mmbtu. |
Full Year 2020 | Oil Production (mbbld) | Equivalent Production (mboed) | |||||||||
Full Year | Q3 | Q2 | Full | Full Year | Q3 | Q2 | Full | ||||
Low | High | Divestiture-Adjusted | Low | High | Divestiture-Adjusted | ||||||
Net production | |||||||||||
United States | 175 | 177 | 159 | 182 | 191 | 300 | 310 | 297 | 307 | 323 | |
International | 13 | 15 | 13 | 15 | 15 | 75 | 80 | 73 | 83 | 85 | |
Total net production | 188 | 192 | 172 | 197 | 206 | 375 | 390 | 370 | 390 | 408 |
The following table sets forth outstanding derivative contracts as of November 3, 2020, and the weighted average prices for those contracts:
2020 | 2021 | 2021 | |||||||||||
Crude Oil | Fourth Quarter | First Half | Second Half | ||||||||||
NYMEX WTI Three-Way Collars | |||||||||||||
Volume (Bbls/day) | 80,000 | — | — | ||||||||||
Weighted average price per Bbl: | |||||||||||||
Ceiling | $ | 64.40 | $ | — | $ | — | |||||||
Floor | $ | 55.00 | $ | — | $ | — | |||||||
Sold put | $ | 48.00 | $ | — | $ | — | |||||||
NYMEX WTI Two-Way Collars | |||||||||||||
Volume (Bbls/day) | 20,000 | 10,000 | 10,000 | ||||||||||
Weighted average price per Bbl: | |||||||||||||
Ceiling | $ | 46.83 | $ | 52.37 | $ | 52.37 | |||||||
Floor | $ | 37.00 | $ | 35.00 | $ | 35.00 | |||||||
Basis Swaps - NYMEX WTI / Argus WTI Midland (a) | |||||||||||||
Volume (Bbls/day) | 15,000 | — | — | ||||||||||
Weighted average price per Bbl | $ | (0.94) | $ | — | $ | — | |||||||
Basis Swaps - NYMEX WTI / ICE Brent (b) | |||||||||||||
Volume (Bbls/day) | 5,000 | 1,630 | — | ||||||||||
Weighted average price per Bbl | $ | (7.24) | $ | (7.24) | $ | — | |||||||
Basis Swaps - NYMEX WTI / UHC (c) | |||||||||||||
Volume (Bbls/day) | — | 14,000 | — | ||||||||||
Weighted average price per Bbl | $ | — | $ | (1.80) | $ | — | |||||||
NYMEX Roll Basis Swaps | |||||||||||||
Volume (Bbls/day) | 30,000 | — | — | ||||||||||
Weighted average price per Bbl | $ | (0.81) | $ | — | $ | — | |||||||
Natural Gas | |||||||||||||
Henry Hub ("HH") Two-Way Collars | |||||||||||||
Volume (MMBtu/day) | 250,000 | 225,000 | 200,000 | ||||||||||
Weighted average price per MMBtu: | |||||||||||||
Ceiling | $ | 2.82 | $ | 3.10 | $ | 3.05 | |||||||
Floor | $ | 2.25 | $ | 2.51 | $ | 2.50 | |||||||
HH Fixed Price Swaps | |||||||||||||
Volume (MMBtu/day) | — | 50,000 | 50,000 | ||||||||||
Weighted average price per Bbl | $ | — | $ | 2.88 | $ | 2.88 | |||||||
Basis Swaps - WAHA / HH (d) | |||||||||||||
Volume (MMBtu/day) | 10,000 | — | — | ||||||||||
Weighted average price per MMBtu | $ | (0.37) | $ | — | $ | — | |||||||
NGL | |||||||||||||
Fixed Price Ethane Swaps (e) | |||||||||||||
Volume (Bbls/day) | 10,000 | — | — | ||||||||||
Weighted average price per Bbl | $ | 8.78 | $ | — | $ | — |
(a) | The basis differential price is indexed against Argus WTI Midland and NYMEX WTI. |
(b) | The basis differential price is indexed against Intercontinental Exchange ("ICE") Brent and NYMEX WTI. |
(c) | The basis differential price is indexed against U.S. Sweet Clearbrook ("UHC") and NYMEX WTI. |
(d) | The basis differential price is indexed against Waha and NYMEX Henry Hub. |
(e) | The fixed price ethane swap is priced at OPIS Mont Belvieu Purity Ethane. |
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SOURCE Marathon Oil Corporation
HOUSTON, Oct. 1, 2020 /PRNewswire/ -- Marathon Oil Corporation (NYSE: MRO) today reported an update highlighting the reinstatement of a base dividend, recent debt reduction initiatives, and a transparent framework for future capital allocation and uses of free cash flow intended to maximize long-term shareholder value.
Highlights
Dividend Reinstatement and Debt Reduction
Marathon Oil announced today that its board of directors has declared a dividend of 3 cents per share on Marathon Oil Corporation common stock. The dividend is payable on Dec. 10, 2020 to stockholders of record on Nov. 18, 2020.
Consistent with prior announcements, Marathon Oil also announced it has completed a cash tender for an aggregate principal amount of $500 million of its outstanding $1 billion 2.8% Senior Notes due November 2022. The tender proactively addresses the Company's next significant debt maturity and was funded from cash on hand. The preliminary cash balance at Sept. 30, prior to funding the tender, was approximately $1.1 billion, which includes the recently completed remarketing of $400 million tax exempt bonds at a weighted interest rate of 2.25%, as well as free cash flow generated during third quarter 2020. The $500 million tender will result in a gross debt reduction of $100 million relative to the Company's second quarter ending debt balance.
Both the $100 million gross debt reduction and fourth quarter dividend are more than fully funded by third quarter free cash flow generation.
Marathon Oil continues to maintain a solid balance sheet, is investment grade rated at all three primary rating agencies, and recently had its outlook upgraded to stable by S&P.
"While 2020 has included its fair share of challenges, we believe we have successfully repositioned our Company for success in a lower, more volatile commodity price environment," said Chairman, President, and CEO Lee Tillman. "Through disciplined capital allocation, material cost reductions and a relentless focus on capital efficiency, we have materially enhanced our free cash flow generation potential and are positioned to deliver differentiated capital efficiency and peer leading free cash flow breakevens. Today's announcement is evidence of our progress and our forward confidence, as we are reinstating a base dividend and reducing our gross debt. Maintaining a strong balance sheet and returning capital to shareholders are core elements of our value proposition, and we believe we are well positioned to do both in the current environment."
Disciplined Capital Allocation Framework
Marathon Oil also provided an update on a transparent capital allocation framework that prioritizes sustainable free cash flow generation across a broad range of commodity prices.
"Marathon Oil has a track record of capital discipline, free cash flow generation, and return of capital to shareholders that is unique in our peer space," continued Tillman. "Over 2018 and 2019, our average reinvestment ratio for development capital was below 80%, and we returned 23% of our total cash flow from operations back to our shareholders. Looking ahead, we aim to deliver similar shareholder-friendly outcomes, yet in a lower and more volatile commodity price environment - and with an even greater focus on free cash flow generation."
In a $40/bbl to $45/bbl WTI oil price environment, the Company plans to target a total capital spending reinvestment ratio of approximately 70% to 80% of cash flow from operations, ensuring 20% to 30% of cash flow from operations will be made available for investor-friendly purposes – prioritizing balance sheet enhancement and return of capital to shareholders.
In an oil price environment above $45/bbl WTI, Marathon Oil plans to target a total capital reinvestment ratio of approximately 70% or less of cash flow from operations, ensuring 30% or more of cash flow will be made available for investor-friendly purposes.
Marathon Oil's resilience to lower commodity prices is underpinned by a free cash flow breakeven below $35/bbl WTI in its 2021 benchmark maintenance scenario. This maintenance scenario would deliver total Company 2021 oil production in-line with the fourth quarter of 2020 for approximately $1 billion in total capital spending. At the current commodity price forward curve, this benchmark scenario positions the Company for free cash flow of approximately $500 million in 2021.
"The intent of our framework is to provide clear visibility to compelling free cash flow generation," said Tillman. "We plan to dedicate a material portion of our cash flow to investor-friendly purposes, prioritizing further balance sheet improvement, while continuing to build on our unique track record of returning capital back to our shareholders. In the event of lower than expected prices, our resilience is underpinned by our differentiated capital efficiency and our sub $35/bbl maintenance scenario breakeven. If commodity prices outperform, we will continue to prioritize free cash flow. Production growth will remain an output, but would be capped at 5% in higher price environments, underscoring our commitment to capital discipline and free cash flow generation."
Forward-Looking Statements
This release contains forward-looking statements. All statements, other than statements of historical fact, including, without limitation, statements regarding the Company's future performance and business strategy, future free cash flow, future return of capital to shareholders, future capital spend, future free cash flow breakeven and future oil production are forward-looking statements. Words such as "anticipate," "believe," "could," "estimate," "expect," "forecast," "future," "guidance," "intend," "may," "outlook," "plan," "positioned," "project," "seek," "should," "target," "will," "would," or similar words may be used to identify forward-looking statements; however, the absence of these words does not mean that the statements are not forward-looking. While the Company believes its assumptions concerning future events are reasonable, a number of factors could cause actual results to differ materially from those projected, including, but not limited to: conditions in the oil and gas industry, including supply/demand levels for crude oil and condensate, NGLs and natural gas and the resulting impact on price; changes in expected reserve or production levels; changes in political or economic conditions in the U.S. and Equatorial Guinea, including changes in foreign currency exchange rates, interest rates, and inflation rates; actions taken by the members of the Organization of the Petroleum Exporting Countries and Russia affecting the production and pricing of crude oil; other global and domestic political, economic or diplomatic developments; capital available for exploration and development; risks related to the Company's hedging activities; voluntary or involuntary curtailments, delays or cancellations of certain drilling activities; well production timing; liability resulting from litigation; drilling and operating risks; lack of, or disruption in, access to storage capacity, pipelines or other transportation methods; availability of drilling rigs, materials and labor, including the costs associated therewith; difficulty in obtaining necessary approvals and permits; non-performance by third parties of contractual obligations; unforeseen hazards such as weather conditions, a health pandemic (including COVID-19), acts of war or terrorist acts and the government or military response thereto; cyber-attacks; changes in safety, health, environmental, tax and other regulations, requirements or initiatives, including initiatives addressing the impact of global climate change, air emissions, or water management; other geological, operating and economic considerations; and the risk factors, forward-looking statements and challenges and uncertainties described in the Company's 2019 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q for the quarters ended March 31, 2020 and June 30, 2020 and other public filings and press releases, available at https://ir.marathonoil.com/. Except as required by law, the Company undertakes no obligation to revise or update any forward-looking statements as a result of new information, future events or otherwise.
Non-GAAP Measures
In analyzing and planning for its business, Marathon Oil supplements its use of GAAP financial measures with non-GAAP financial measures, including free cash flow. Free cash flow is defined as net cash provided by operating activities adjusted for working capital, capital expenditures, and EG LNG return of capital. Management believes this is useful to investors as a measure of the Company's ability to fund its capital expenditure programs and dividend payments, service debt, and other distributions to stockholders.
Media Relations Contact
Stephanie Gentry: 713-296-3307
Investor Relations Contacts:
Guy Baber: 713-296-1892
John Reid: 713-296-4380
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SOURCE Marathon Oil Corporation
HOUSTON, Sept. 30, 2020 /PRNewswire/ -- Marathon Oil Corporation (NYSE: MRO) announced today the consideration payable in connection with its previously announced cash tender offer (the "Offer") for up to an aggregate principal amount of $500,000,000 (the "Aggregate Maximum Tender Amount") of its outstanding $1,000,000,000 aggregate principal amount of 2.800% Senior Notes due 2022 (the "Notes"). The terms and conditions of the Offer are set forth in the Offer to Purchase, dated September 16, 2020 (as the same may be amended or supplemented, the "Offer to Purchase"), and remain unchanged. The Offer will expire at 11:59 p.m., New York City time, on October 14, 2020, unless extended or earlier terminated by the Company (the "Expiration Time").
The Total Consideration (as defined in the Offer to Purchase) for each $1,000 principal amount of Notes validly tendered and accepted for purchase pursuant to the Offer was determined in the manner described in the Offer to Purchase by reference to the fixed spread for the Notes specified in the table below plus the yield based on the bid-side price of the U.S. Treasury Reference Security specified in the table below at 10:00 a.m., New York City time, today, and is inclusive of the Early Tender Premium set forth in the table below.
Title of Security | CUSIP Number | Principal Amount Outstanding | U.S. Treasury Reference Security | Bloomberg Reference Page | Reference Yield | Fixed Spread | Early Tender Premium (per $1,000) | Total Consideration (per $1,000) |
2.800% Senior Notes due 2022 | 565849AK2 | $1,000,000,000 | 0.125% UST due August 31, 2022 | FIT1 | 0.131% | 20 bps | $50 | $1,051.22 |
Only holders of Notes who validly tendered and did not validly withdraw their Notes at or prior to 5:00 p.m., New York City Time, on September 29, 2020 (such time and date, the "Early Tender Time") are eligible to receive the Total Consideration for the Notes accepted for purchase. In addition, holders whose Notes are purchased in the Offer will receive accrued and unpaid interest from the last interest payment date to, but not including, the settlement date. It is anticipated that the settlement date for the Notes validly tendered and accepted for purchase will be October 1, 2020.
Withdrawal rights for the Notes expired at 5:00 p.m., New York City Time, on September 29, 2020.
Since the Offer was fully subscribed as of the Early Tender Time, the Company does not anticipate accepting for purchase any Notes validly tendered after the Early Tender Time.
The Company's obligation to accept for purchase and to pay for the Notes validly tendered and not validly withdrawn pursuant to the Offer is subject to the satisfaction or waiver, in the Company's discretion, of certain conditions, which are more fully described in the Offer to Purchase. The complete terms and conditions of the Offer are set forth in the Offer to Purchase. Holders of the Notes are urged to read the Offer to Purchase carefully.
Marathon Oil has retained D.F. King & Co., Inc. as the tender agent and information agent for the Offer, and J.P. Morgan Securities LLC and TD Securities (USA) LLC are serving as lead dealer managers for the Offer.
Citigroup Global Markets Inc. and Goldman Sachs & Co. LLC are serving as co-dealer managers for the Offer.
Holders who would like additional copies of the Offer to Purchase may call or email the information agent, D.F. King & Co., Inc., at (212) 269-5550 (banks and brokers), (866) 416-0576 (all others), or mro@dfking.com. Copies of the Offer to Purchase are also available at the following website: www.dfking.com/mro. Questions regarding the terms of the Offer should be directed to J.P. Morgan at (866) 834-4666 (toll-free) or (212) 834-3424 (collect) or TD Securities at (855) 495-9846 (toll-free) or (212) 827-7381 (collect).
This press release is for informational purposes only and shall not constitute an offer to buy or a solicitation of an offer to sell any securities. The Offer is being made solely pursuant to the Offer to Purchase. The Offer is not being made to holders of the Notes in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. In any jurisdiction in which the securities laws or blue sky laws require the Offer to be made by a licensed broker or dealer, the Offer will be deemed to be made on behalf of Marathon Oil by the dealer managers or one or more registered brokers or dealers that are licensed under the laws of such jurisdiction. Neither the Company, the dealer managers, the tender agent and information agent, nor their respective affiliates is making any recommendation as to whether or not holders should tender all or any portion of their Notes in the Offer.
Forward-Looking Statements
This release contains forward-looking statements. All statements, other than statements of historical fact, including, without limitation, statements regarding the Offer and the Company's future performance and business strategy, are forward-looking statements. Words such as "anticipate," "believe," "could," "estimate," "expect," "forecast," "future," "guidance," "intend," "may," "outlook," "plan," "positioned," "project," "seek," "should," "target," "will," "would," or similar words may be used to identify forward-looking statements; however, the absence of these words does not mean that the statements are not forward-looking. While the Company believes its assumptions concerning future events are reasonable, a number of factors could cause actual results to differ materially from those projected, including, but not limited to: conditions in the oil and gas industry, including supply/demand levels for crude oil and condensate, NGLs and natural gas and the resulting impact on price; changes in expected reserve or production levels; changes in political or economic conditions in the U.S. and Equatorial Guinea, including changes in foreign currency exchange rates, interest rates, and inflation rates; actions taken by the members of the Organization of the Petroleum Exporting Countries and Russia affecting the production and pricing of crude oil; other global and domestic political, economic or diplomatic developments; capital available for exploration and development; risks related to the Company's hedging activities; voluntary or involuntary curtailments, delays or cancellations of certain drilling activities; well production timing; liability resulting from litigation; drilling and operating risks; lack of, or disruption in, access to storage capacity, pipelines or other transportation methods; availability of drilling rigs, materials and labor, including the costs associated therewith; difficulty in obtaining necessary approvals and permits; non-performance by third parties of contractual obligations; unforeseen hazards such as weather conditions, a health pandemic (including COVID-19), acts of war or terrorist acts and the government or military response thereto; cyber-attacks; changes in safety, health, environmental, tax and other regulations, requirements or initiatives, including initiatives addressing the impact of global climate change, air emissions, or water management; other geological, operating and economic considerations; and the risk factors, forward-looking statements and challenges and uncertainties described in the Company's 2019 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q for the quarters ended March 31, 2020 and June 30, 2020 and other public filings and press releases, available at https://ir.marathonoil.com/. Except as required by law, the Company undertakes no obligation to revise or update any forward-looking statements as a result of new information, future events or otherwise.
Media Relations Contact:
Stephanie Gentry: 713-296-3307
Investor Relations Contacts:
Guy Baber: 713-296-1892
John Reid: 713-296-4380
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SOURCE Marathon Oil Corporation
HOUSTON, Sept. 30, 2020 /PRNewswire/ -- Marathon Oil Corporation (NYSE:MRO) announced today the early tender results for its previously announced cash tender offer (the "Offer") for up to an aggregate principal amount of $500,000,000 (the "Aggregate Maximum Tender Amount") of its outstanding $1,000,000,000 aggregate principal amount of 2.800% Senior Notes due 2022 (the "Notes"). The terms and conditions of the Offer are set forth in the Offer to Purchase, dated September 16, 2020 (as the same may be amended or supplemented, the "Offer to Purchase"). The Offer will expire at 11:59 p.m., New York City time, on October 14, 2020, unless extended or earlier terminated by the Company.
As of 5:00 p.m., New York City time, on September 29, 2020 (such time and date, the "Early Tender Time"), according to information provided by D.F. King & Co., Inc., the tender and information agent for the Offer, the aggregate principal amount of the Notes set forth in the table below under "Principal Amount Tendered at Early Tender Time" had been validly tendered and not validly withdrawn in the Offer. Withdrawal rights for the Notes expired at 5:00 p.m., New York City Time, on September 29, 2020.
Title of | CUSIP | Principal | Aggregate | U.S. | Bloomberg | Fixed | Early | Principal |
2.800% Senior | 565849AK2 | $1,000,000,000 | $500,000,000 | 0.125% UST | FIT1 | 20 bps | $50 | $757,215,000 |
The Aggregate Maximum Tender Amount has been fully subscribed as of the Early Tender Time. In accordance with the Aggregate Maximum Tender Amount set forth above, all of the Notes validly tendered and not validly withdrawn prior to or at the Early Tender Time will be subject to proration as further described in the Offer to Purchase. The Company expects to accept for purchase an aggregate principal amount of $500,000,000 of Notes in the Offer using a proration rate of 66.08%. The Company does not anticipate accepting for purchase any Notes validly tendered after the Early Tender Time.
The Total Consideration (as defined in the Offer to Purchase) for each $1,000 principal amount of the Notes validly tendered and accepted for purchase will be determined in the manner described in the Offer to Purchase by reference to a fixed spread for the Notes specified in the table above plus the yield based on the bid-side price of the U.S. Treasury Reference Security specified in the table above at 10:00 a.m., New York City time, on September 30, 2020, unless extended or the Offer is earlier terminated. The Company expects to announce the Total Consideration later today.
Only holders of Notes who validly tendered and did not validly withdraw their Notes at or prior to the Early Tender Time are eligible to receive the Total Consideration for the Notes accepted for purchase. In addition, holders whose Notes are purchased in the Offer will receive accrued and unpaid interest from the last interest payment date to, but not including, the settlement date.
It is anticipated that the settlement date for the Notes validly tendered and accepted for purchase will be October 1, 2020.
The Company's obligation to accept for purchase and to pay for the Notes validly tendered and not validly withdrawn pursuant to the Offer is subject to the satisfaction or waiver, in the Company's discretion, of certain conditions, which are more fully described in the Offer to Purchase. The complete terms and conditions of the Offer are set forth in the Offer to Purchase. Holders of the Notes are urged to read the Offer to Purchase carefully.
Marathon Oil has retained D.F. King & Co., Inc. as the tender agent and information agent for the Offer, and J.P. Morgan Securities LLC and TD Securities (USA) LLC are serving as lead dealer managers for the Offer.
Citigroup Global Markets Inc. and Goldman Sachs & Co. LLC are serving as co-dealer managers for the Offer.
Holders who would like additional copies of the Offer to Purchase may call or email the information agent, D.F. King & Co., Inc., at (212) 269-5550 (banks and brokers), (866) 416-0576 (all others), or mro@dfking.com. Copies of the Offer to Purchase are also available at the following website: www.dfking.com/mro. Questions regarding the terms of the Offer should be directed to J.P. Morgan at (866) 834-4666 (toll-free) or (212) 834-3424 (collect) or TD Securities at (855) 495-9846 (toll-free) or (212) 827-7381 (collect).
This press release is for informational purposes only and shall not constitute an offer to buy or a solicitation of an offer to sell any securities. The Offer is being made solely pursuant to the Offer to Purchase. The Offer is not being made to holders of the Notes in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. In any jurisdiction in which the securities laws or blue sky laws require the Offer to be made by a licensed broker or dealer, the Offer will be deemed to be made on behalf of Marathon Oil by the dealer managers or one or more registered brokers or dealers that are licensed under the laws of such jurisdiction. Neither the Company, the dealer managers, the tender agent and information agent, nor their respective affiliates is making any recommendation as to whether or not holders should tender all or any portion of their Notes in the Offer.
Forward-Looking Statements
This release contains forward-looking statements. All statements, other than statements of historical fact, including, without limitation, statements regarding the Offer and the Company's future performance and business strategy, are forward-looking statements. Words such as "anticipate," "believe," "could," "estimate," "expect," "forecast," "future," "guidance," "intend," "may," "outlook," "plan," "positioned," "project," "seek," "should," "target," "will," "would," or similar words may be used to identify forward-looking statements; however, the absence of these words does not mean that the statements are not forward-looking. While the Company believes its assumptions concerning future events are reasonable, a number of factors could cause actual results to differ materially from those projected, including, but not limited to: conditions in the oil and gas industry, including supply/demand levels for crude oil and condensate, NGLs and natural gas and the resulting impact on price; changes in expected reserve or production levels; changes in political or economic conditions in the U.S. and Equatorial Guinea, including changes in foreign currency exchange rates, interest rates, and inflation rates; actions taken by the members of the Organization of the Petroleum Exporting Countries and Russia affecting the production and pricing of crude oil; other global and domestic political, economic or diplomatic developments; capital available for exploration and development; risks related to the Company's hedging activities; voluntary or involuntary curtailments, delays or cancellations of certain drilling activities; well production timing; liability resulting from litigation; drilling and operating risks; lack of, or disruption in, access to storage capacity, pipelines or other transportation methods; availability of drilling rigs, materials and labor, including the costs associated therewith; difficulty in obtaining necessary approvals and permits; non-performance by third parties of contractual obligations; unforeseen hazards such as weather conditions, a health pandemic (including COVID-19), acts of war or terrorist acts and the government or military response thereto; cyber-attacks; changes in safety, health, environmental, tax and other regulations, requirements or initiatives, including initiatives addressing the impact of global climate change, air emissions, or water management; other geological, operating and economic considerations; and the risk factors, forward-looking statements and challenges and uncertainties described in the Company's 2019 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q for the quarters ended March 31, 2020 and June 30, 2020 and other public filings and press releases, available at https://ir.marathonoil.com/. Except as required by law, the Company undertakes no obligation to revise or update any forward-looking statements as a result of new information, future events or otherwise.
Media Relations Contact:
Stephanie Gentry: 713-296-3307
Investor Relations Contacts:
Guy Baber: 713-296-1892
John Reid: 713-296-4380
View original content to download multimedia:http://www.prnewswire.com/news-releases/marathon-oil-announces-early-tender-results-of-tender-offer-for-up-to-500-000-000-of-its-2-800-senior-notes-due-2022--301141924.html
SOURCE Marathon Oil Corporation
HOUSTON, Sept. 29, 2020 /PRNewswire/ -- Marathon Oil Corporation (NYSE: MRO) announced today it plans to issue its third quarter 2020 earnings news release on Wednesday, November 4, after the close of U.S. financial markets.
The company will conduct a conference call, which will be webcast live, on Thursday, November 5, at 9 a.m. ET. The call will include forward-looking information.
All of the above information, including earnings releases and other investor-related material, can be accessed by visiting Marathon Oil's website at https://www.MarathonOil.com.
Media Relations Contacts:
Stephanie Gentry: 713-296-3307
Investor Relations Contacts:
Guy Baber: 713-296-1892
John Reid: 713-296-4380
View original content to download multimedia:http://www.prnewswire.com/news-releases/marathon-oil-schedules-third-quarter-2020-earnings-release-and-conference-call-301139897.html
SOURCE Marathon Oil Corporation
HOUSTON, Sept. 16, 2020 /PRNewswire/ -- Marathon Oil Corporation (NYSE:MRO) announced today that it has commenced a cash tender offer for up to an aggregate principal amount of $500,000,000 (the "Aggregate Maximum Tender Amount") of its outstanding $1,000,000,000 aggregate principal amount of 2.800% Senior Notes due 2022 (the "Notes"), on the terms and subject to the conditions set forth in the Offer to Purchase, dated the date hereof (as the same may be amended or supplemented, the "Offer to Purchase"). The tender offer is referred to herein as the "Offer."
Title of Security | CUSIP | Principal | Aggregate | U.S. | Bloomberg | Fixed | Early |
2.800% Senior | 565849AK2 | $1,000,000,000 | $500,000,000 | 0.125% UST | FIT1 | 20 bps | $50 |
Subject to the Aggregate Maximum Tender Amount, proration (if applicable) and the satisfaction or waiver of the conditions to the Offer, the Company will accept for purchase on the Early Settlement Date or the Final Settlement Date (each as defined in the Offer to Purchase), as applicable, Notes validly tendered and not validly withdrawn in the Offer.
Notes validly tendered and not validly withdrawn at or prior to the Early Tender Time (as defined below) will be accepted for purchase in priority to other Notes validly tendered after the Early Tender Time. Accordingly, if the Aggregate Maximum Tender Amount is reached in respect of tenders of Notes made at or prior to the Early Tender Time, no Notes that are tendered after the Early Tender Time will be accepted for purchase unless the Aggregate Maximum Tender Amount is increased by the Company, in its sole discretion. If the aggregate principal amount of Notes validly tendered exceeds the Aggregate Maximum Tender Amount on the applicable settlement date, the amount of Notes purchased in the Offer will be prorated as set forth in the Offer to Purchase.
The Offer will expire at 11:59 p.m., New York City time, on October 14, 2020, or any other date and time to which the Company extends the Offer (such time and date, as the same may be extended, the "Expiration Time"), unless the Offer is earlier terminated. Holders of the Notes must validly tender and not validly withdraw the Notes prior to or at 5:00 p.m., New York City time, on September 29, 2020 (such time and date, as the same may be extended, the "Early Tender Time"), to be eligible to receive the Total Consideration (as defined in the Offer to Purchase), which is inclusive of an amount in cash equal to the amount set forth in the table above under the heading "Early Tender Premium" (the "Early Tender Premium"), plus Accrued Interest (as defined below). Holders of Notes who validly tender their Notes after the Early Tender Time but prior to or at the Expiration Time will be eligible to receive an amount equal to the Total Consideration minus the Early Tender Premium (the "Late Tender Offer Consideration"), plus Accrued Interest.
Tendered Notes may be validly withdrawn at any time prior to or at, but not after, 5:00 p.m., New York City time, on September 29, 2020, (such time and date, as the same may be extended, the "Withdrawal Deadline").
The Total Consideration for each $1,000 principal amount of the Notes validly tendered and accepted for purchase pursuant to the Offer will be determined in the manner described in the Offer to Purchase by reference to a fixed spread specified for the Notes and specified in the table above plus the yield based on the bid-side price of the U.S. Treasury Reference Security specified in the table above at 10:00 a.m., New York City time, on September 30, 2020, unless extended or the Offer is earlier terminated. Holders must validly tender (and not validly withdraw) at or before the Expiration Time to be eligible to receive the Total Consideration or the Late Tender Offer Consideration, as applicable. In addition, holders whose Notes are purchased in the Offer will receive accrued and unpaid interest from the last interest payment date to, but not including, the applicable settlement date ("Accrued Interest").
Payment for Notes that are validly tendered prior to or at the Early Tender Time and that are accepted for purchase will be made on the Early Settlement Date, which will be a date promptly following the Early Tender Time. It is currently anticipated that the Early Settlement Date will be October 1, 2020, subject to all conditions to the Offer having been satisfied or waived by the Company. Payment for Notes that are validly tendered after the Early Tender Time and prior to or at the Expiration Time and that are accepted for purchase will be made on the Final Settlement Date, which will be a date promptly following the Expiration Time. It is currently anticipated that the Final Settlement Date, if applicable, will be October 16, 2020, subject to all conditions to the Offer having been satisfied or waived by the Company.
The Company's obligation to accept for purchase and to pay for the Notes validly tendered and not validly withdrawn pursuant to the Offer is subject to the satisfaction or waiver, in the Company's discretion, of certain conditions, which are more fully described in the Offer to Purchase. The complete terms and conditions of the Offer are set forth in the Offer to Purchase. Holders of the Notes are urged to read the Offer to Purchase carefully.
Marathon Oil has retained D.F. King & Co., Inc. as the tender agent and information agent for the Offer and J.P. Morgan Securities LLC and TD Securities (USA) LLC as lead dealer managers for the Offer.
Citigroup Global Markets Inc. and Goldman Sachs & Co. LLC will serve as co-dealer managers for the Offer.
Holders who would like additional copies of the Offer to Purchase may call or email the information agent, D.F. King & Co., Inc. at (212) 269-5550 (banks and brokers), (866) 416-0576 (all others), or mro@dfking.com. Copies of the Offer to Purchase are also available at the following website: www.dfking.com/mro. Questions regarding the terms of the Offer should be directed to J.P. Morgan at (866) 834-4666 (toll-free) or (212) 834-3424 (collect) or TD Securities at (855) 495-9846 (toll-free) or (212) 827-7381 (collect).
This press release is for informational purposes only and shall not constitute an offer to buy or a solicitation of an offer to sell any securities. The Offer is being made solely pursuant to the Offer to Purchase. The Offer is not being made to holders of the Notes in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. In any jurisdiction in which the securities laws or blue sky laws require the Offer to be made by a licensed broker or dealer, the Offer will be deemed to be made on behalf of Marathon Oil by the dealer managers or one or more registered brokers or dealers that are licensed under the laws of such jurisdiction. Neither the Company, the dealer managers, the tender agent and information agent, nor their respective affiliates is making any recommendation as to whether or not holders should tender all or any portion of their Notes in the Offer.
Forward-Looking Statements
This release contains forward-looking statements. All statements, other than statements of historical fact, including, without limitation, statements regarding the Offer and the Company's future performance and business strategy, are forward-looking statements. Words such as "anticipate," "believe," "could," "estimate," "expect," "forecast," "future," "guidance," "intend," "may," "outlook," "plan," "positioned," "project," "seek," "should," "target," "will," "would," or similar words may be used to identify forward-looking statements; however, the absence of these words does not mean that the statements are not forward-looking. While the Company believes its assumptions concerning future events are reasonable, a number of factors could cause actual results to differ materially from those projected, including, but not limited to: conditions in the oil and gas industry, including supply/demand levels for crude oil and condensate, NGLs and natural gas and the resulting impact on price; changes in expected reserve or production levels; changes in political or economic conditions in the U.S. and Equatorial Guinea, including changes in foreign currency exchange rates, interest rates, and inflation rates; actions taken by the members of the Organization of the Petroleum Exporting Countries and Russia affecting the production and pricing of crude oil; other global and domestic political, economic or diplomatic developments; capital available for exploration and development; risks related to the Company's hedging activities; voluntary or involuntary curtailments, delays or cancellations of certain drilling activities; well production timing; liability resulting from litigation; drilling and operating risks; lack of, or disruption in, access to storage capacity, pipelines or other transportation methods; availability of drilling rigs, materials and labor, including the costs associated therewith; difficulty in obtaining necessary approvals and permits; non-performance by third parties of contractual obligations; unforeseen hazards such as weather conditions, a health pandemic (including COVID-19), acts of war or terrorist acts and the government or military response thereto; cyber-attacks; changes in safety, health, environmental, tax and other regulations, requirements or initiatives, including initiatives addressing the impact of global climate change, air emissions, or water management; other geological, operating and economic considerations; and the risk factors, forward-looking statements and challenges and uncertainties described in the Company's 2019 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q for the quarters ended March 31, 2020 and June 30, 2020 and other public filings and press releases, available at https://ir.marathonoil.com/. Except as required by law, the Company undertakes no obligation to revise or update any forward-looking statements as a result of new information, future events or otherwise.
Media Relations Contact:
Stephanie Gentry: 713-296-3307
Investor Relations Contacts:
Guy Baber: 713-296-1892
John Reid: 713-296-4380
View original content to download multimedia:http://www.prnewswire.com/news-releases/marathon-oil-commences-tender-offer-for-up-to-500-000-000-of-its-2-800-senior-notes-due-2022--301132254.html
SOURCE Marathon Oil Corporation
HOUSTON, Aug. 5, 2020 /PRNewswire/ -- Marathon Oil Corporation (NYSE:MRO) today reported a second quarter 2020 net loss of $750 million, or $0.95 per diluted share, which includes the impact of certain items not typically represented in analysts' earnings estimates and that would otherwise affect comparability of results. The adjusted net loss was $477 million, or $0.60 per diluted share. Net operating cash flow was $9 million, or $86 million before changes in working capital.
Highlights
"Amid tremendous commodity volatility, our ongoing response to the COVID-19 global pandemic, and a challenging year for our industry, we have remained focused on the factors we can control: how we allocate capital, how we manage our cost structure, and how we execute," said Chairman, President, and CEO Lee Tillman. "Second quarter results are a testament to that focus, highlighted by safety and operational excellence, lower than expected capital spending and cash costs, and capital efficiency outperformance. On the back of this strong execution, we are both lowering capital spending guidance and raising oil production guidance for the full year."
"We believe the Company is successfully positioned to generate free cash flow at commodity prices well below the current forward curve, while protecting operational momentum into 2021," Tillman continued. "Though premature to provide a specific business plan, our differentiated capital efficiency is illustrated by a 2021 benchmark maintenance scenario that we believe could deliver total Company oil production in-line with 4Q20 at a free cash flow breakeven of approximately $35/bbl."
United States (U.S.)
U.S. production averaged 307,000 net barrels of oil equivalent per day (boed) for second quarter 2020. Oil production averaged 182,000 net barrels of oil per day (bopd) inclusive of approximately 11,000 net bopd of curtailments. U.S. unit production costs were $4.09 per boe, a decline of approximately 20% in comparison to the 2019 average and the lowest quarterly average since Marathon Oil became an independent exploration and production company.
In the Eagle Ford, Marathon Oil's second quarter 2020 production averaged 108,000 net boed. Oil production averaged 66,000 net bopd on 20 gross Company-operated wells to sales. In the Bakken, production averaged 103,000 net boed in the second quarter 2020, including oil production of 80,000 net bopd. Marathon Oil brought 8 gross Company-operated wells to sales during second quarter in the Bakken. Marathon Oil's Oklahoma production averaged 60,000 net boed in the second quarter 2020, including oil production of 15,000 net bopd. The Company did not bring any gross Company-operated wells to sales during second quarter in Oklahoma. Marathon Oil's Northern Delaware production averaged 30,000 net boed in the second quarter 2020. Oil production averaged 16,000 net bopd on 6 gross Company-operated wells to sales.
In total, Marathon Oil brought 34 gross Company-operated wells to sales during second quarter, with 32 of those wells coming online in April. Following the pause in drilling and completion activity during second quarter, the Company has resumed activity in both the Eagle Ford and Bakken, currently running 3 rigs and 2 frac crews across the two plays. Consistent with previous disclosure, gross Company-operated wells to sales over the second half of 2020 will be weighted to the fourth quarter.
Marathon Oil has completed its 2020 Resource Play Exploration (REx) drilling program, which was primarily focused on continued delineation of the Company's contiguous 60,000 net acreage position in the Texas Delaware Oil Play. In the Texas Delaware, the Company has now successfully brought online four Woodford wells and two Meramec wells since entering the play. These wells have confirmed reservoir productivity and gas/oil ratio expectations while exhibiting high oil cut, shallow decline profiles, and low water/oil ratios.
International
Equatorial Guinea production averaged 83,000 net boed for second quarter 2020, including 15,000 net bopd of oil. Unit production costs averaged $1.88 per boe.
Guidance
Due to strong execution and capital efficiency improvement, Marathon Oil has reduced its full year 2020 capital spending guidance to $1.2 billion and raised its full year 2020 oil production guidance. The midpoint of revised, full year 2020 total Company oil production guidance is now 190,000 net bopd, inclusive of year-to-date curtailments. As a reminder, previously provided production guidance was on an underlying basis and excluded the impact from production curtailments. Revised full year guidance accounts for a sequential reduction in expected third quarter Equatorial Guinea production due to the impact of higher forward prices on net interest under the production sharing contract (PSC) and natural decline.
Corporate
Net cash provided by operations was $9 million during second quarter 2020, or $86 million before changes in working capital. Second quarter capital expenditures totaled $137 million.
Total liquidity as of June 30 was approximately $3.5 billion, which consisted of an undrawn revolving credit facility of $3.0 billion and $522 million in cash and cash equivalents. June 30 cash balance was reduced by a $261 million change in working capital associated with operating and investing activities. Second quarter working capital effects were primarily driven by the substantial drop in activity levels and should normalize over the second half of the year. Shortly after quarter end, Marathon Oil received an Alternative Minimum Tax (AMT) refund, adjusting for which resulted in a July 3rd pro-forma cash balance of $611 million.
The adjustments to net loss for second quarter 2020 totaled $273 million before tax, primarily due to the income impact associated with an equity method investment impairment, unrealized losses on derivative instruments, and non-recurring costs associated with organizational restructuring.
A slide deck and Quarterly Investor Packet will be posted to the Company's website following this release today, August 5. On Thursday, August 6, at 9:00 a.m. ET, the Company will conduct a question and answer webcast/call, which will include forward-looking information. The live webcast, replay and all related materials will be available at https://ir.marathonoil.com/.
Non-GAAP Measures
In analyzing and planning for its business, Marathon Oil supplements its use of GAAP financial measures with non-GAAP financial measures, including adjusted net income (loss), adjusted net income (loss) per share, net cash provided by operations before changes in working capital and pro-forma cash balance.
Adjusted net income (loss) is defined as net income (loss) adjusted for gain/loss on dispositions, impairments of proved property, goodwill, and equity method investments, unrealized derivative gain/loss on commodity instruments, effects of pension settlement losses and curtailments and other items that could be considered "non-operating" or "non-core" in nature. Management believes adjusted net income (loss) and adjusted net income (loss) per share are useful to investors as additional tools to meaningfully represent the Company's operating performance and to compare Marathon to certain competitors.
Management believes net cash provided by operations before changes in working capital is useful to investors to demonstrate the Company's ability to generate cash quarterly or year-to-date by eliminating differences caused by the timing of certain working capital items.
Pro-forma cash balance is defined as cash and cash equivalents plus adjustments for the Alternative Minimum Tax refund we recently received. Management believes adjusting for this item provides a clearer picture of our liquidity.
These non-GAAP financial measures reflect an additional way of viewing aspects of the business that, when viewed with GAAP results may provide a more complete understanding of factors and trends affecting the business and are a useful tool to help management and investors make informed decisions about Marathon Oil's financial and operating performance. These measures should not be considered in isolation or as an alternative to their most directly comparable GAAP financial measures. A reconciliation to their most directly comparable GAAP financial measures can be found in our investor package on our website at https://ir.marathonoil.com/ and in the tables below. Marathon Oil strongly encourages investors to review the Company's consolidated financial statements and publicly filed reports in their entirety and not rely on any single financial measure.
Forward-looking Statements
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, including without limitation statements regarding the Company's future capital budgets and allocations (including development capital budget and resource play leasing and exploration spend), future performance, corporate-level cash returns on invested capital, business strategy, asset quality, drilling plans, production guidance, cash margins, asset sales and acquisitions, leasing and exploration activities, production, oil growth and other plans and objectives for future operations, are forward-looking statements. Words such as "anticipate," "believe," "could," "estimate," "expect," "forecast," "future," "guidance," "intend," "may," "outlook," "plan," "positioned," "project," "seek," "should," "target," "will," "would," or similar words may be used to identify forward-looking statements; however, the absence of these words does not mean that the statements are not forward-looking. While the Company believes its assumptions concerning future events are reasonable, a number of factors could cause actual results to differ materially from those projected, including, but not limited to: conditions in the oil and gas industry, including supply/demand levels for crude oil and condensate, NGLs and natural gas and the resulting impact on price; changes in expected reserve or production levels; changes in political or economic conditions in the U.S. and Equatorial Guinea, including changes in foreign currency exchange rates, interest rates, inflation rates; actions taken by the members of the Organization of the Petroleum Exporting Countries (OPEC) and Russia affecting the production and pricing of crude oil; and other global and domestic political, economic or diplomatic developments; capital available for exploration and development; risks related to the Company's hedging activities; voluntary or involuntary curtailments, delays or cancellations of certain drilling activities; well production timing; liability resulting from litigation; drilling and operating risks; lack of, or disruption in, access to storage capacity, pipelines or other transportation methods; availability of drilling rigs, materials and labor, including the costs associated therewith; difficulty in obtaining necessary approvals and permits; non-performance by third parties of contractual obligations; unforeseen hazards such as weather conditions, a health pandemic (including COVID-19), acts of war or terrorist acts and the government or military response thereto; cyber-attacks; changes in safety, health, environmental, tax and other regulations, requirements or initiatives, including initiatives addressing the impact of global climate change, air emissions, or water management; other geological, operating and economic considerations; and the risk factors, forward-looking statements and challenges and uncertainties described in the Company's 2019 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other public filings and press releases, available at https://ir.marathonoil.com/. Except as required by law, the Company undertakes no obligation to revise or update any forward-looking statements as a result of new information, future events or otherwise.
Media Relations Contact:
Stephanie Gentry: 713-296-3307
Investor Relations Contacts:
Guy Baber: 713-296-1892
John Reid: 713-296-4380
Consolidated Statements of Income (Unaudited) | Three Months Ended | ||||||||
June 30 | Mar. 31 | June 30 | |||||||
(In millions, except per share data) | 2020 | 2020 | 2019 | ||||||
Revenues and other income: | |||||||||
Revenues from contracts with customers | $ | 490 | $ | 1,024 | $ | 1,381 | |||
Net gain (loss) on commodity derivatives | (70) | 202 | 16 | ||||||
Income (loss) from equity method investments | (152) | (12) | 31 | ||||||
Net gain (loss) on disposal of assets | (2) | 9 | (8) | ||||||
Other income | 6 | 7 | 13 | ||||||
Total revenues and other income | 272 | 1,230 | 1,433 | ||||||
Costs and expenses: | |||||||||
Production | 129 | 160 | 193 | ||||||
Shipping, handling and other operating | 105 | 144 | 170 | ||||||
Exploration | 26 | 28 | 26 | ||||||
Depreciation, depletion and amortization | 597 | 644 | 605 | ||||||
Impairments | — | 97 | 18 | ||||||
Taxes other than income | 30 | 66 | 79 | ||||||
General and administrative | 88 | 76 | 87 | ||||||
Total costs and expenses | 975 | 1,215 | 1,178 | ||||||
Income (loss) from operations | (703) | 15 | 255 | ||||||
Net interest and other | (69) | (64) | (64) | ||||||
Other net periodic benefit credit | 7 | — | 2 | ||||||
Income (loss) before income taxes | (765) | (49) | 193 | ||||||
Provision (benefit) for income taxes | (15) | (3) | 32 | ||||||
Net income (loss) | $ | (750) | $ | (46) | $ | 161 | |||
Adjusted Net Income (Loss) | |||||||||
Net income (loss) | $ | (750) | $ | (46) | $ | 161 | |||
Adjustments for special items (pre-tax): | |||||||||
Net (gain) loss on disposal of assets | 2 | (9) | 8 | ||||||
Proved property impairments | — | 2 | 18 | ||||||
Goodwill impairment | — | 95 | — | ||||||
Pension settlement | 14 | 2 | 2 | ||||||
Pension curtailment | (17) | — | — | ||||||
Unrealized (gain) loss on derivative instruments | 96 | (171) | (11) | ||||||
Reduction in workforce | 13 | — | — | ||||||
Impairment of equity method investment | 152 | — | — | ||||||
Other | 13 | 2 | 11 | ||||||
Adjustments for special items | 273 | (79) | 28 | ||||||
Adjusted net income (loss) (a) | $ | (477) | $ | (125) | $ | 189 | |||
Per diluted share: | |||||||||
Net income (loss) | $ | (0.95) | $ | (0.06) | $ | 0.20 | |||
Adjusted net income (loss) (a) | $ | (0.60) | $ | (0.16) | $ | 0.23 | |||
Weighted average diluted shares | 790 | 794 | 814 |
(a) | Non-GAAP financial measure. See "Non-GAAP Measures" above for further discussion. |
Supplemental Statistics (Unaudited) | Three Months Ended | ||||||||
June 30 | Mar. 31 | June 30 | |||||||
(In millions) | 2020 | 2020 | 2019 | ||||||
Segment income (loss) | |||||||||
United States | $ | (365) | $ | (20) | $ | 215 | |||
International | (6) | (1) | 96 | ||||||
Not allocated to segments | (379) | (25) | (150) | ||||||
Net income (loss) | $ | (750) | $ | (46) | $ | 161 | |||
Cash flows | |||||||||
Net cash provided by operating activities | $ | 9 | $ | 701 | $ | 797 | |||
Minus: changes in working capital | (77) | 151 | 26 | ||||||
Net cash provided by operations before changes in working capital (a) | $ | 86 | $ | 550 | $ | 771 | |||
Cash additions to property, plant and equipment | $ | (326) | $ | (620) | $ | (647) |
(a) | Non-GAAP financial measure. See "Non-GAAP Measures" above for further discussion. | |||||||
Supplemental Statistics (Unaudited) | Three Months Ended | Year Ended | ||||||
June 30 | Mar. 31 | June 30 | Dec. 31 | |||||
Net Production | 2020 | 2020 | 2019 | 2019 | ||||
Equivalent Production (mboed) | ||||||||
United States | 307 | 340 | 332 | 324 | ||||
International | 83 | 82 | 103 | 92 | ||||
Total net production | 390 | 422 | 435 | 416 | ||||
Less: Divestitures (a) | — | — | 14 | 8 | ||||
Total divestiture-adjusted net production | 390 | 422 | 421 | 408 | ||||
Oil Production (mbbld) | ||||||||
United States | 182 | 207 | 192 | 191 | ||||
International | 15 | 14 | 26 | 21 | ||||
Total net production | 197 | 221 | 218 | 212 | ||||
Less: Divestitures (b) | — | — | 10 | 6 | ||||
Total divestiture-adjusted net production | 197 | 221 | 208 | 206 |
(a) | Divestitures include volumes associated with the following: (i) 2 mboed and 1 mboed for the second quarter 2019 and the year 2019 related to the sale of certain United States non-core conventional assets which closed in first quarter 2019 (ii) 10 mboed and 6 mboed for the second quarter 2019 and the year 2019 related to the sale of our U.K. business which closed in third quarter 2019 and (iii) 2 mboed and 1 mboed for the second quarter 2019 and the year 2019 related to the sale of our non-operated interest in the Atrush block in Kurdistan which closed in second quarter 2019. |
(b) | Divestitures include volumes associated with the following: (i) 8 mbbld and 5 mbbld for the second quarter 2019 and the year 2019 related to the sale of our U.K. business which closed in third quarter 2019 and (iii) 2 mbbld and 1 mbbld for the second quarter 2019 and the year 2019 related to the sale of our non-operated interest in the Atrush block in Kurdistan which closed in second quarter 2019. |
Supplemental Statistics (Unaudited) | Three Months Ended | |||||
June 30 | Mar. 31 | June 30 | ||||
2020 | 2020 | 2019 | ||||
United States - net sales volumes | ||||||
Crude oil and condensate (mbbld) | 183 | 205 | 190 | |||
Eagle Ford | 66 | 72 | 61 | |||
Bakken | 81 | 88 | 88 | |||
Oklahoma | 16 | 20 | 21 | |||
Northern Delaware | 16 | 17 | 15 | |||
Other United States (a) | 4 | 8 | 5 | |||
Natural gas liquids (mbbld) | 56 | 57 | 64 | |||
Eagle Ford | 20 | 19 | 25 | |||
Bakken | 12 | 12 | 8 | |||
Oklahoma | 16 | 20 | 24 | |||
Northern Delaware | 7 | 5 | 6 | |||
Other United States (a) | 1 | 1 | 1 | |||
Natural gas (mmcfd) | 413 | 454 | 459 | |||
Eagle Ford | 133 | 138 | 139 | |||
Bakken | 60 | 58 | 42 | |||
Oklahoma | 167 | 197 | 223 | |||
Northern Delaware | 44 | 44 | 36 | |||
Other United States (a) | 9 | 17 | 19 | |||
Total United States (mboed) | 308 | 338 | 330 | |||
International - net sales volumes | ||||||
Crude oil and condensate (mbbld) | 16 | 13 | 30 | |||
Equatorial Guinea | 16 | 13 | 20 | |||
United Kingdom (b) | — | — | 8 | |||
Other International (c) | — | — | 2 | |||
Natural gas liquids (mbbld) | 9 | 9 | 10 | |||
Equatorial Guinea | 9 | 9 | 10 | |||
Natural gas (mmcfd) | 354 | 352 | 403 | |||
Equatorial Guinea | 354 | 352 | 392 | |||
United Kingdom (b)(d) | — | — | 11 | |||
Total International (mboed) | 84 | 81 | 107 | |||
Total Company - net sales volumes (mboed) | 392 | 419 | 437 | |||
Net sales volumes of equity method investees | ||||||
LNG (mtd) | 4,635 | 5,064 | 5,321 | |||
Methanol (mtd) | 738 | 1,185 | 1,134 | |||
Condensate and LPG (boed) | 10,896 | 10,638 | 11,080 |
(a) | Includes sales volumes from the sale of certain non-core proved properties in our United States segment. |
(b) | The Company closed on the sale of its U.K. business on July 1, 2019. |
(c) | Other International includes volumes for the Atrush block in Kurdistan, which was sold in the second quarter of 2019. |
(d) | Includes natural gas acquired for injection and subsequent resale. |
Supplemental Statistics (Unaudited) | Three Months Ended | ||||||||
June 30 | Mar. 31 | June 30 | |||||||
2020 | 2020 | 2019 | |||||||
United States - average price realizations (a) | |||||||||
Crude oil and condensate ($ per bbl) (b) | $ | 21.65 | $ | 44.23 | $ | 59.18 | |||
Eagle Ford | 23.53 | 46.82 | 63.10 | ||||||
Bakken | 20.03 | 41.14 | 56.84 | ||||||
Oklahoma | 22.09 | 44.87 | 58.66 | ||||||
Northern Delaware | 22.36 | 46.78 | 55.33 | ||||||
Other United States (c) | 18.31 | 47.82 | 66.21 | ||||||
Natural gas liquids ($ per bbl) | $ | 7.09 | $ | 9.97 | $ | 14.60 | |||
Eagle Ford | 8.70 | 9.50 | 13.19 | ||||||
Bakken | 2.56 | 8.43 | 18.68 | ||||||
Oklahoma | 8.67 | 11.69 | 14.39 | ||||||
Northern Delaware | 6.24 | 8.14 | 15.02 | ||||||
Other United States (c) | 9.68 | 11.74 | 17.25 | ||||||
Natural gas ($ per mcf) | $ | 1.44 | $ | 1.60 | $ | 1.89 | |||
Eagle Ford | 1.69 | 1.84 | 2.51 | ||||||
Bakken | 0.93 | 1.54 | 1.70 | ||||||
Oklahoma | 1.59 | 1.60 | 1.78 | ||||||
Northern Delaware | 0.88 | 0.80 | 0.18 | ||||||
Other United States (c) | 1.25 | 1.94 | 2.26 | ||||||
International - average price realizations | |||||||||
Crude oil and condensate ($ per bbl) | $ | 13.79 | $ | 36.88 | $ | 58.21 | |||
Equatorial Guinea | 13.79 | 36.88 | 54.38 | ||||||
United Kingdom (d) | — | — | 68.40 | ||||||
Other International (e) | — | — | 55.83 | ||||||
Natural gas liquids ($ per bbl) | $ | 1.00 | $ | 1.00 | $ | 1.67 | |||
Equatorial Guinea (f) | 1.00 | 1.00 | 1.00 | ||||||
United Kingdom (d) | — | — | 37.63 | ||||||
Natural gas ($ per mcf) | $ | 0.24 | $ | 0.24 | $ | 0.35 | |||
Equatorial Guinea (f) | 0.24 | 0.24 | 0.24 | ||||||
United Kingdom (d) | — | — | 4.25 | ||||||
Benchmark | |||||||||
WTI crude oil (per bbl) | $ | 28.00 | $ | 45.78 | $ | 59.91 | |||
Brent (Europe) crude oil (per bbl) (g) | $ | 29.34 | $ | 50.44 | $ | 68.92 | |||
Mont Belvieu NGLs (per bbl) (h) | $ | 12.25 | $ | 13.27 | $ | 19.20 | |||
Henry Hub natural gas (per mmbtu) (i) | $ | 1.72 | $ | 1.95 | $ | 2.64 |
(a) | Excludes gains or losses on commodity derivative instruments. |
(b) | Inclusion of realized gains (losses) on crude oil derivative instruments would have increased average price realizations by $1.59, $1.47, and $0.32, for the second quarter 2020, the first quarter 2020, and the second quarter 2019. |
(c) | Includes sales volumes from the sale of certain non-core proved properties in our United States segment. |
(d) | The Company closed on the sale of its U.K. business on July 1, 2019. |
(e) | Other International includes volumes for the Atrush block in Kurdistan, which was sold in the second quarter of 2019. |
(f) | Represents fixed prices under long-term contracts with Alba Plant LLC, Atlantic Methanol Production Company LLC and/or Equatorial Guinea LNG Holdings Limited, which are equity method investees. The Alba Plant LLC processes the NGLs and then sells secondary condensate, propane, and butane at market prices. Marathon Oil includes its share of income from each of these equity method investees in the International segment. |
(g) | Average of monthly prices obtained from Energy Information Administration website. |
(h) | Bloomberg Finance LLP: Y-grade Mix NGL of 55% ethane, 25% propane, 5% butane, 8% isobutane and 7% natural gasoline. |
(i) | Settlement date average per mmbtu. |
Full Year 2020 | Oil Production (mbbld) | Equivalent Production (mboed) | |||||||||
Full Year | Q2 | Q1 | Full | Full Year | Q2 | Q1 | Full | ||||
Low | High | Divestiture-Adjusted | Low | High | Divestiture-Adjusted | ||||||
Net production | |||||||||||
United States | 173 | 179 | 182 | 207 | 191 | 295 | 305 | 307 | 340 | 323 | |
International | 13 | 15 | 15 | 14 | 15 | 75 | 79 | 83 | 82 | 85 | |
Total net production | 186 | 194 | 197 | 221 | 206 | 370 | 384 | 390 | 422 | 408 |
The following table sets forth outstanding derivative contracts as of August 5, 2020, and the weighted average prices for those contracts:
2020 | 2021 | |||||||||||||
Crude Oil | Third Quarter | Fourth Quarter | Full Year | |||||||||||
NYMEX WTI Three-Way Collars | ||||||||||||||
Volume (Bbls/day) | 80,000 | 80,000 | — | |||||||||||
Weighted average price per Bbl: | ||||||||||||||
Ceiling | $ | 64.40 | $ | 64.40 | $ | — | ||||||||
Floor | $ | 55.00 | $ | 55.00 | $ | — | ||||||||
Sold put | $ | 48.00 | $ | 48.00 | $ | — | ||||||||
NYMEX WTI Two-Way Collars | ||||||||||||||
Volume (Bbls/day) | 36,739 | 10,000 | 10,000 | |||||||||||
Weighted average price per Bbl: | ||||||||||||||
Ceiling | $ | 41.14 | $ | 48.65 | $ | 52.37 | ||||||||
Floor | $ | 31.47 | $ | 37.00 | $ | 35.00 | ||||||||
Fixed Price WTI Swaps | ||||||||||||||
Volume (Bbls/day) | 10,000 | — | — | |||||||||||
Weighted average price per Bbl | $ | 32.77 | $ | — | $ | — | ||||||||
Basis Swaps - Argus WTI Midland (a) | ||||||||||||||
Volume (Bbls/day) | 15,000 | 15,000 | — | |||||||||||
Weighted average price per Bbl | $ | (0.94) | $ | (0.94) | $ | — | ||||||||
Basis Swaps - NYMEX WTI / ICE Brent (b) | ||||||||||||||
Volume (Bbls/day) | 5,000 | 5,000 | 808 | |||||||||||
Weighted average price per Bbl | $ | (7.24) | $ | (7.24) | $ | (7.24) | ||||||||
NYMEX Roll Basis Swaps | ||||||||||||||
Volume (Bbls/day) | 60,000 | 30,000 | — | |||||||||||
Weighted average price per Bbl | $ | (1.58) | $ | (0.81) | $ | — | ||||||||
Natural Gas | ||||||||||||||
Two-Way Collars | ||||||||||||||
Volume (MMBtu/day) | 66,304 | 150,000 | 112,329 | |||||||||||
Weighted average price per MMBtu: | ||||||||||||||
Ceiling | $ | 2.49 | $ | 2.62 | $ | 3.00 | ||||||||
Floor | $ | 2.00 | $ | 2.13 | $ | 2.42 | ||||||||
Basis Swaps - WAHA / HH (c) | ||||||||||||||
Volume (MMBtu/day) | 10,000 | 10,000 | — | |||||||||||
Weighted average price per MMBtu | $ | (0.37) | $ | (0.37) | $ | — | ||||||||
NGL | ||||||||||||||
Fixed Price Ethane Swaps | ||||||||||||||
Volume (Bbls/day) | 7,304 | 10,000 | — | |||||||||||
Weighted average price per Bbl | $ | 8.78 | $ | 8.78 | $ | — |
(a) | The basis differential price is indexed against Argus WTI Midland. |
(b) | The basis differential price is indexed against Intercontinental Exchange ("ICE") Brent and NYMEX WTI. |
(c) | The basis differential price is indexed against Waha and NYMEX Henry Hub. |
View original content to download multimedia:http://www.prnewswire.com/news-releases/marathon-oil-reports-second-quarter-2020-results-301107001.html
SOURCE Marathon Oil Corporation
HOUSTON, July 6, 2020 /PRNewswire/ -- Marathon Oil Corporation (NYSE: MRO) announced today it plans to issue its second quarter 2020 earnings news release on Wednesday, August 5, after the close of U.S. financial markets.
The company will conduct a conference call, which will be webcast live, on Thursday, August 6, at 9 a.m. ET. The call will include forward-looking information.
All of the above information, including earnings releases and other investor-related material, can be accessed by visiting Marathon Oil's website at https://www.MarathonOil.com.
Media Relations Contacts:
Stephanie Gentry: 713-296-3307
Investor Relations Contacts:
Guy Baber: 713-296-1892
John Reid: 713-296-4380
View original content to download multimedia:http://www.prnewswire.com/news-releases/marathon-oil-schedules-second-quarter-2020-earnings-release-and-conference-call-301088635.html
SOURCE Marathon Oil Corporation
HOUSTON, May 6, 2020 /PRNewswire/ -- Marathon Oil Corporation (NYSE: MRO) today reported a first quarter 2020 net loss of $(46) million, or $(0.06) per diluted share, which includes the impact of certain items not typically represented in analysts' earnings estimates and that would otherwise affect comparability of results. The adjusted net loss was $(125) million, or $(0.16) per diluted share. Net operating cash flow was $701 million, or $550 million before changes in working capital.
"I want to first extend my thanks to our resilient and dedicated employees and contractors, all of whom remain hard at work day in and day out, helping to supply our communities and our nation with the clean and affordable energy we need to power our way of life, as well as our eventual economic recovery," said Chairman, President, and CEO Lee Tillman. "While the safety and health of our people remains my top priority, we continue to focus on the financial strength of our Company. In addition to the previously announced $1.1 billion reduction to our 2020 capital budget, we also expect to reduce our annualized cash costs by $350 million. We entered this unprecedented downturn on firm financial footing, and we believe we are taking the necessary steps to protect our hard-earned financial strength and flexibility."
Highlights
"In response to the challenges facing our industry," Tillman continued, "we are exercising the capital allocation flexibility inherent in our multi-basin portfolio. We're dramatically reducing our capital expenditures, including a pause in virtually all completion activity during second quarter, and we will continue to optimize our capital program in response to market conditions. We are also aggressively managing our cost structure. While returning capital to our shareholders remains a core Marathon Oil objective, we are temporarily suspending our dividend and share repurchase program, prioritizing our liquidity and balance sheet during this period of heightened uncertainty. We plan to resume building on our well-established track record of returning capital to our shareholders upon improved visibility into normalizing macro conditions and sustainable free cash flow generation. Collectively, we believe these proactive steps, along with the strength of our asset base, the resolve of our people, our execution excellence, and our investment grade balance sheet, position us well to navigate this challenging time for our industry."
United States (U.S.)
U.S. production averaged 340,000 net barrels of oil equivalent per day (boed) for first quarter 2020. Oil production averaged 207,000 net barrels of oil per day (bopd), in comparison to first quarter production guidance of 192,000 to 202,000 net bopd. U.S. unit production costs were $4.63 per boe, the lowest quarterly average since Marathon Oil became an independent exploration and production company. First quarter average completed well cost per lateral foot was down approximately 10% in comparison to the prior year average.
EAGLE FORD: Marathon Oil's Eagle Ford production averaged 114,000 net boed for first quarter 2020. Oil production averaged 72,000 net bopd. Marathon Oil operated four rigs and two frac crews on average during first quarter and brought 38 gross Company-operated wells to sales. The Company has suspended second quarter completion activity and plans to transition to a lower and more stable level of drilling and completion activity over the second half of the year.
BAKKEN: Marathon Oil's Bakken production averaged 110,000 net boed in the first quarter 2020. Oil production averaged 88,000 net bopd. Marathon Oil operated four rigs and 1 frac crew on average during first quarter and brought 25 gross Company-operated wells to sales. As in the Eagle Ford, the Company has suspended second quarter completion activity and plans to transition to a lower and more stable level of drilling and completion activity over the second half of the year.
OKLAHOMA: Marathon Oil's Oklahoma production averaged 74,000 net boed in the first quarter 2020. Oil production averaged 21,000 net bopd. The Company brought 13 gross Company-operated wells to sales during first quarter. Marathon Oil began the year operating three rigs and one frac crew in Oklahoma but suspended all drilling and completion operations before the end of first quarter. The Company currently does not expect to bring any additional wells to sales in Oklahoma this year.
NORTHERN DELAWARE: Marathon Oil's Northern Delaware production averaged 30,000 net boed in the first quarter 2020. Oil production averaged 17,000 net bopd. The Company brought 6 gross Company-operated wells to sales. Marathon Oil has suspended further drilling activity in the Northern Delaware, with only a limited number of wells to sales expected through the balance of the year.
RESOURCE PLAY EXPLORATION: In response to the dramatic fall in commodity prices, the Company has exercised the flexibility inherent in this program and has suspended further activity, beyond wells already in progress in the Texas Delaware oil play. The Company therefore expects to drive an approximate $100 million reduction to REx capital expenditures this year in comparison to initial guidance of $200 million. REx spending is fully contemplated within the Company's total capital spending budget of $1.3 billion or less.
International
Equatorial Guinea production averaged 82,000 net boed for first quarter 2020, including 14,000 net bopd of oil. Unit production costs averaged $2.35 per boe. The previously disclosed major turnaround at the AMPCO methanol facility was completed during first quarter.
Guidance
In light of the substantial change to global commodity prices and the macro environment, the Company has withdrawn previously provided guidance. At the revised capital spending budget of $1.3 billion or less, for full-year 2020, the Company now expects its underlying U.S. crude oil production to decline by approximately 8% on a divestiture-adjusted basis, with a similar percentage decline expected for boe production. Underlying International oil production is expected to decline by approximately 7% on a divestiture-adjusted basis, with a similar percentage decline expected for boe production. Underlying production guidance excludes the potential impact from production curtailments.
On this same underlying basis, full year 2020 U.S. unit production expense is expected to average $4.25/boe to $5.25/boe and full year International unit production expense is expected to average $2.25 to $2.75/boe. These unit production expense guidance ranges are consistent with previously provided guidance.
Marathon Oil currently expects that second quarter U.S. crude oil and boe production will be down sequentially due to curtailments along with natural decline from reduced activity. The Company will continue to assess the need for curtailments on an ongoing basis in response to market conditions.
Corporate
Consistent with a focus to continually reduce its cost structure, Marathon Oil expects to capture annualized cash cost reductions of approximately $350 million relative to its initial 2020 budget. Savings will be realized across numerous expense categories, including production expense, general and administrative expense, shipping and handling expense, and production taxes. Savings are expected to be fully realized on a run-rate basis by the end of this year, with approximately 40% of these savings attributable to the Company's fixed cost structure. For 2020, the Company expects to realize total cash cost savings of approximately $260 million, inclusive of severance and partial year timing impacts.
Cost saving measures include base salary reductions for certain corporate officers, a reduction of Board of Director compensation, and employee and contractor workforce reductions. More specifically, corporate officers, including the Company's President and Chief Executive Officer, the Company's Chief Financial Officer, and other corporate officers will experience temporary base salary reductions of 10% from May 4, 2020 through December 31, 2020. The Company's Board of Directors has also agreed to a temporary reduction of annual cash retainer fees for non-employee directors of 20% for the third and fourth quarter of 2020.
Additionally, broad workforce actions have taken place that reduce the Company's U.S. employee base by 16% and total contractor base by 70%. Such reductions reflect a realignment of Company resources with lower investment levels, while retaining a foundation of essential talent to support an efficient recovery in investment. The Company believes these actions, in addition to other measures, will drive a 17% annualized reduction to corporate general and administrative expense by the end of this year, in comparison to 2019.
Marathon Oil generated first quarter net operating cash flow of $701 million, or $550 million before changes in working capital. The Company made $40 million of dividend payments and executed $85 million of share repurchases during first quarter. In response to dramatic commodity price weakness and the significant uncertainty surrounding the near-term macroeconomic and global oil supply and demand outlook, the Company is temporarily suspending its quarterly dividend payment and its share repurchase program. While returning capital to shareholders remains a key objective for Marathon Oil, the Company is prioritizing financial strength and liquidity preservation in the current uncertain environment. The Company will revisit its return of capital policy in coming quarters, expecting to resume quarterly dividend payments pending improved visibility to normalizing macroeconomic conditions and global oil supply and demand balances.
Total liquidity as of March 31 was approximately $3.8 billion, which consisted of $0.8 billion in cash and cash equivalents and an undrawn revolving credit facility of $3.0 billion. Marathon Oil is investment grade rated at all three primary rating agencies, including recent reviews from Fitch and S&P, and has no significant debt maturities until November of 2022.
The adjustments to net income for first quarter 2020 totaled $(79) million before tax, primarily due to the income impact associated with unrealized gains on derivative instruments, partly offset by the full impairment of remaining goodwill.
Marathon Oil has added to its hedge positions with a primary focus on protecting near-term cash flow. As of May 4, 2020, the Company's second quarter open crude hedge positions include 117,000 bopd of fixed price swaps and two-way collars at a weighted average floor price of $30.33/bbl. Additional protection to second quarter cash flow has been added through fixed price sales agreements. The Company has also added hedges to protect near-term regional basis differentials and NYMEX trade roll exposure.
A slide deck and Quarterly Investor Packet will be posted to the Company's website following this release today, May 6. On Thursday, May 7, at 9:00 a.m. ET, the Company will conduct a question and answer webcast/call, which will include forward-looking information. The live webcast, replay and all related materials will be available at https://www.marathonoil.com/Investors.
Non-GAAP Measures
In analyzing and planning for its business, Marathon Oil supplements its use of GAAP financial measures with non-GAAP financial measures, including adjusted net income, adjusted net income per share and net cash provided by operations before changes in working capital.
Adjusted net income is defined as net income adjusted for gain/loss on dispositions, certain property impairments, unrealized derivative gain/loss on commodity instruments, pension settlement losses and other items that could be considered "non-operating" or "non-core" in nature. Management believes adjusted net income and adjusted net income per share are useful to investors as additional tools to meaningfully represent the Company's operating performance and to compare Marathon to certain competitors.
Management believes net cash provided by operations before changes in working capital is useful to investors to demonstrate the Company's ability to generate cash quarterly or year-to-date by eliminating differences caused by the timing of certain working capital items.
These non-GAAP financial measures reflect an additional way of viewing aspects of the business that, when viewed with GAAP results may provide a more complete understanding of factors and trends affecting the business and are a useful tool to help management and investors make informed decisions about Marathon Oil's financial and operating performance. These measures should not be considered in isolation or as alternatives to their most directly comparable GAAP financial measures. A reconciliation to their most directly comparable GAAP financial measures can be found in our investor package on our website at www.marathonoil.com and in the tables below. Marathon Oil strongly encourages investors to review the Company's consolidated financial statements and publicly filed reports in their entirety and not rely on any single financial measure.
Forward-looking Statements
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, including without limitation statements regarding the Company's future capital budgets and allocations (including development capital budget and resource play leasing and exploration spend), future performance, corporate-level cash returns on invested capital, business strategy, asset quality, drilling plans, production guidance, cash margins, asset sales and acquisitions, leasing and exploration activities, production, oil growth and other plans and objectives for future operations, are forward-looking statements. Words such as "anticipate," "believe," "could," "estimate," "expect," "forecast," "guidance," "intend," "may," "outlook," "plan," "project," "seek," "should," "target," "will," "would," or similar words may be used to identify forward-looking statements; however, the absence of these words does not mean that the statements are not forward-looking. While the Company believes its assumptions concerning future events are reasonable, a number of factors could cause actual results to differ materially from those projected, including, but not limited to: conditions in the oil and gas industry, including supply/demand levels for crude oil and condensate, NGLs and natural gas and the resulting impact on price; changes in expected reserve or production levels; changes in political or economic conditions in the U.S. and Equatorial Guinea, including changes in foreign currency exchange rates, interest rates, inflation rates; actions taken by the members of the Organization of the Petroleum Exporting Countries (OPEC) and Russia affecting the production and pricing of crude oil; and other global and domestic political, economic or diplomatic developments; capital available for exploration and development; our ability to complete our announced acquisitions on the timeline currently anticipated, if at all; risks related to the Company's hedging activities; voluntary or involuntary curtailments, delays or cancellations of certain drilling activities; well production timing; liability resulting from litigation; drilling and operating risks; lack of, or disruption in, access to storage capacity, pipelines or other transportation methods; availability of drilling rigs, materials and labor, including the costs associated therewith; difficulty in obtaining necessary approvals and permits; non-performance by third parties of contractual obligations; unforeseen hazards such as weather conditions, a health pandemic (including COVID-19), acts of war or terrorist acts and the government or military response thereto; cyber-attacks; changes in safety, health, environmental, tax and other regulations, requirements or initiatives, including initiatives addressing the impact of global climate change, air emissions, or water management; other geological, operating and economic considerations; and the risk factors, forward-looking statements and challenges and uncertainties described in the Company's 2019 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other public filings and press releases, available at www.marathonoil.com. Except as required by law, the Company undertakes no obligation to revise or update any forward-looking statements as a result of new information, future events or otherwise.
Media Relations Contact:
Stephanie Gentry: 713-296-3307
Investor Relations Contacts:
Guy Baber: 713-296-1892
John Reid: 713-296-4380
Consolidated Statements of Income (Unaudited) | Three Months Ended | ||||||||
Mar. 31 | Dec. 31 | Mar. 31 | |||||||
(In millions, except per share data) | 2020 | 2019 | 2019 | ||||||
Revenues and other income: | |||||||||
Revenues from contracts with customers | $ | 1,024 | $ | 1,233 | $ | 1,200 | |||
Net gain (loss) on commodity derivatives | 202 | (44) | (91) | ||||||
Income (loss) from equity method investments | (12) | 24 | 11 | ||||||
Net gain (loss) on disposal of assets | 9 | (6) | 42 | ||||||
Other income | 7 | 8 | 35 | ||||||
Total revenues and other income | 1,230 | 1,215 | 1,197 | ||||||
Costs and expenses: | |||||||||
Production | 160 | 169 | 187 | ||||||
Shipping, handling and other operating | 144 | 143 | 154 | ||||||
Exploration | 28 | 42 | 59 | ||||||
Depreciation, depletion and amortization | 644 | 616 | 554 | ||||||
Impairments | 97 | — | 6 | ||||||
Taxes other than income | 66 | 79 | 72 | ||||||
General and administrative | 76 | 93 | 94 | ||||||
Total costs and expenses | 1,215 | 1,142 | 1,126 | ||||||
Income from operations | 15 | 73 | 71 | ||||||
Net interest and other | (64) | (67) | (49) | ||||||
Other net periodic benefit costs | — | (6) | 5 | ||||||
Loss on early extinguishment of debt | — | (3) | — | ||||||
Income (loss) before income taxes | (49) | (3) | 27 | ||||||
Provision (benefit) for income taxes | (3) | 17 | (147) | ||||||
Net income (loss) | $ | (46) | $ | (20) | $ | 174 | |||
Adjusted Net Income (Loss) | |||||||||
Net income (loss) | $ | (46) | $ | (20) | $ | 174 | |||
Adjustments for special items (pre-tax): | |||||||||
Net (gain) loss on disposal of assets | (9) | 6 | (42) | ||||||
Proved property impairments | 2 | — | 6 | ||||||
Goodwill impairment | 95 | — | — | ||||||
Pension settlement | 2 | 10 | — | ||||||
Unrealized (gain) loss on derivative instruments | (171) | 55 | 113 | ||||||
Other | 2 | 4 | 12 | ||||||
Benefit for income taxes related to special items | — | — | (7) | ||||||
Adjustments for special items | (79) | 75 | 82 | ||||||
Adjusted net income (loss) (a) | $ | (125) | $ | 55 | $ | 256 | |||
Per diluted share: | |||||||||
Net income (loss) | $ | (0.06) | $ | (0.03) | $ | 0.21 | |||
Adjusted net income (loss) (a) | $ | (0.16) | $ | 0.07 | $ | 0.31 | |||
Weighted average diluted shares | 794 | 800 | 820 |
(a) | Non-GAAP financial measure. See "Non-GAAP Measures" above for further discussion. |
Supplemental Statistics (Unaudited) | Three Months Ended | ||||||||
Mar. 31 | Dec. 31 | Mar. 31 | |||||||
(In millions) | 2020 | 2019 | 2019 | ||||||
Segment income (loss) | |||||||||
United States | $ | (20) | $ | 148 | $ | 132 | |||
International | (1) | 33 | 61 | ||||||
Not allocated to segments | (25) | (201) | (19) | ||||||
Net income (loss) | $ | (46) | $ | (20) | $ | 174 | |||
Cash flows | |||||||||
Net cash provided by operating activities | $ | 701 | $ | 700 | $ | 515 | |||
Minus: changes in working capital | 151 | 15 | (157) | ||||||
Net cash provided by operations before changes in working capital (a) | $ | 550 | $ | 685 | $ | 672 | |||
Cash additions to property, plant and equipment | $ | (620) | $ | (616) | $ | (615) |
(a) | Non-GAAP financial measure. See "Non-GAAP Measures" above for further discussion. |
Supplemental Statistics (Unaudited) | Three Months Ended | Year Ended | ||||||
Mar. 31 | Dec. 31 | Mar. 31 | Dec. 31 | |||||
Net Production | 2020 | 2019 | 2019 | 2019 | ||||
Equivalent Production (mboed) | ||||||||
United States | 340 | 328 | 296 | 324 | ||||
International | 82 | 85 | 92 | 92 | ||||
Total net production | 422 | 413 | 388 | 416 | ||||
Less: Divestitures (a) | — | — | 16 | 8 | ||||
Total divestiture-adjusted net production | 422 | 413 | 372 | 408 | ||||
Oil Production (mbbld) | ||||||||
United States | 207 | 196 | 177 | 191 | ||||
International | 14 | 15 | 26 | 21 | ||||
Total net production | 221 | 211 | 203 | 212 | ||||
Less: Divestitures (b) | — | — | 12 | 6 | ||||
Total divestiture-adjusted net production | 221 | 211 | 191 | 206 |
(a) | Divestitures include volumes associated with the following: (i) 2 mboed and 1 mboed for the first quarter 2019 and the year 2019 related to the sale of certain United States non-core conventional assets which closed in first quarter 2019 (ii) 12 mboed and 6 mboed for the first quarter 2019 and the year 2019 related to the sale of our U.K. business which closed in third quarter 2019 and (iii) 2 mboed and 1 mboed for the first quarter 2019 and the year 2019 related to the sale of our non-operated interest in the Atrush block in Kurdistan which closed in second quarter 2019. |
(b) | Divestitures include volumes associated with the following: (i) 1 mbbld for the first quarter 2019 related to the sale of certain United States non-core conventional assets which closed in first quarter 2019 (ii) 9 mbbld and 5 mbbld for the first quarter 2019 and the year 2019 related to the sale of our U.K. business which closed in third quarter 2019 and (iii) 2 mbbld and 1 mbbld for the first quarter 2019 and the year 2019 related to the sale of our non-operated interest in the Atrush block in Kurdistan which closed in second quarter 2019. |
Supplemental Statistics (Unaudited) | Three Months Ended | |||||
Mar. 31 | Dec. 31 | Mar. 31 | ||||
2020 | 2019 | 2019 | ||||
United States - net sales volumes | ||||||
Crude oil and condensate (mbbld) | 205 | 196 | 177 | |||
Eagle Ford | 72 | 67 | 61 | |||
Bakken | 88 | 86 | 79 | |||
Oklahoma | 20 | 24 | 16 | |||
Northern Delaware | 17 | 16 | 15 | |||
Other United States (a) | 8 | 3 | 6 | |||
Natural gas liquids (mbbld) | 57 | 58 | 55 | |||
Eagle Ford | 19 | 18 | 23 | |||
Bakken | 12 | 12 | 7 | |||
Oklahoma | 20 | 22 | 18 | |||
Northern Delaware | 5 | 5 | 6 | |||
Other United States (a) | 1 | 1 | 1 | |||
Natural gas (mmcfd) | 454 | 444 | 392 | |||
Eagle Ford | 138 | 121 | 127 | |||
Bakken | 58 | 59 | 36 | |||
Oklahoma | 197 | 216 | 173 | |||
Northern Delaware | 44 | 41 | 33 | |||
Other United States (a) | 17 | 7 | 23 | |||
Total United States (mboed) | 338 | 328 | 297 | |||
International - net sales volumes | ||||||
Crude oil and condensate (mbbld) | 13 | 13 | 23 | |||
Equatorial Guinea | 13 | 13 | 12 | |||
United Kingdom (b) | — | — | 9 | |||
Other International (c) | — | — | 2 | |||
Natural gas liquids (mbbld) | 9 | 9 | 8 | |||
Equatorial Guinea | 9 | 9 | 8 | |||
Natural gas (mmcfd) | 352 | 363 | 342 | |||
Equatorial Guinea | 352 | 363 | 330 | |||
United Kingdom (b)(d) | — | — | 12 | |||
Total International (mboed) | 81 | 83 | 88 | |||
Total Company - net sales volumes (mboed) | 419 | 411 | 385 | |||
Net sales volumes of equity method investees | ||||||
LNG (mtd) | 5,064 | 5,180 | 4,636 | |||
Methanol (mtd) | 1,185 | 1,153 | 1,003 | |||
Condensate and LPG (boed) | 10,638 | 11,832 | 9,890 |
(a) | Includes sales volumes from the sale of certain non-core proved properties in our United States segment. |
(b) | The Company closed on the sale of its U.K. business on July 1, 2019. |
(c) | Other International includes volumes for the Atrush block in Kurdistan, which was sold in the second quarter of 2019. |
(d) | Includes natural gas acquired for injection and subsequent resale. |
Supplemental Statistics (Unaudited) | Three Months Ended | ||||||||
Mar. 31 | Dec. 31 | Mar. 31 | |||||||
2020 | 2019 | 2019 | |||||||
United States - average price realizations (a) | |||||||||
Crude oil and condensate ($ per bbl) (b) | $ | 44.23 | $ | 54.83 | $ | 54.05 | |||
Eagle Ford | 46.82 | 57.63 | 57.69 | ||||||
Bakken | 41.14 | 51.98 | 52.15 | ||||||
Oklahoma | 44.87 | 55.49 | 53.39 | ||||||
Northern Delaware | 46.78 | 57.08 | 48.97 | ||||||
Other United States (c) | 47.82 | 56.26 | 56.19 | ||||||
Natural gas liquids ($ per bbl) | $ | 9.97 | $ | 15.47 | $ | 15.66 | |||
Eagle Ford | 9.50 | 15.72 | 17.05 | ||||||
Bakken | 8.43 | 13.12 | 16.17 | ||||||
Oklahoma | 11.69 | 17.30 | 13.66 | ||||||
Northern Delaware | 8.14 | 12.35 | 15.27 | ||||||
Other United States (c) | 11.74 | 13.98 | 18.92 | ||||||
Natural gas ($ per mcf) | $ | 1.60 | $ | 2.10 | $ | 2.93 | |||
Eagle Ford | 1.84 | 2.40 | 2.99 | ||||||
Bakken | 1.54 | 2.31 | 3.77 | ||||||
Oklahoma | 1.60 | 1.95 | 2.90 | ||||||
Northern Delaware | 0.80 | 1.72 | 1.93 | ||||||
Other United States (c) | 1.94 | 1.89 | 2.89 | ||||||
International - average price realizations | |||||||||
Crude oil and condensate ($ per bbl) | $ | 36.88 | $ | 48.26 | $ | 53.93 | |||
Equatorial Guinea | 36.88 | 48.26 | 44.36 | ||||||
United Kingdom (d) | — | — | 67.62 | ||||||
Other International (e) | — | — | 47.76 | ||||||
Natural gas liquids ($ per bbl) | $ | 1.00 | $ | 1.00 | $ | 1.96 | |||
Equatorial Guinea (f) | 1.00 | 1.00 | 1.00 | ||||||
United Kingdom (d) | — | — | 38.10 | ||||||
Natural gas ($ per mcf) | $ | 0.24 | $ | 0.24 | $ | 0.48 | |||
Equatorial Guinea (f) | 0.24 | 0.24 | 0.24 | ||||||
United Kingdom (d) | — | — | 7.02 | ||||||
Benchmark | |||||||||
WTI crude oil (per bbl) | $ | 45.78 | $ | 56.87 | $ | 54.90 | |||
Brent (Europe) crude oil (per bbl) (g) | $ | 50.44 | $ | 63.41 | $ | 63.17 | |||
Mont Belvieu NGLs (per bbl) (h) | $ | 13.27 | $ | 17.15 | $ | 21.77 | |||
Henry Hub natural gas (per mmbtu) (i) | $ | 1.95 | $ | 2.50 | $ | 3.15 |
(a) | Excludes gains or losses on commodity derivative instruments. |
(b) | Inclusion of realized gains (losses) on crude oil derivative instruments would have affected average price realizations by $1.47, $0.58, and $1.10, for the first quarter 2020, the fourth quarter 2019, and the first quarter 2019. |
(c) | Includes sales volumes from the sale of certain non-core proved properties in our United States segment. |
(d) | The Company closed on the sale of its U.K. business on July 1, 2019. |
(e) | Other International includes volumes for the Atrush block in Kurdistan, which was sold in the second quarter of 2019. |
(f) | Represents fixed prices under long-term contracts with Alba Plant LLC, Atlantic Methanol Production Company LLC and/or Equatorial Guinea LNG Holdings Limited, which are equity method investees. The Alba Plant LLC processes the NGLs and then sells secondary condensate, propane, and butane at market prices. Marathon Oil includes its share of income from each of these equity method investees in the International segment. |
(g) | Average of monthly prices obtained from Energy Information Administration website. |
(h) | Bloomberg Finance LLP: Y-grade Mix NGL of 55% ethane, 25% propane, 5% butane, 8% isobutane and 7% natural gasoline. |
(i) | Settlement date average per mmbtu. |
The following table sets forth outstanding derivative contracts as of May 4, 2020, and the weighted average prices for those contracts:
2020 | 2021 | |||||||||||||||||
Crude Oil | Second Quarter | Third Quarter | Fourth Quarter | Full Year | ||||||||||||||
NYMEX WTI Three-Way Collars | ||||||||||||||||||
Volume (Bbls/day) | — | 80,000 | 80,000 | — | ||||||||||||||
Weighted average price per Bbl: | ||||||||||||||||||
Ceiling | $ | — | $ | 64.40 | $ | 64.40 | $ | — | ||||||||||
Floor | $ | — | $ | 55.00 | $ | 55.00 | $ | — | ||||||||||
Sold put | $ | — | $ | 48.00 | $ | 48.00 | $ | — | ||||||||||
NYMEX WTI Two-Way Collars | ||||||||||||||||||
Volume (Bbls/day) | 40,000 | — | — | — | ||||||||||||||
Weighted average price per Bbl: | ||||||||||||||||||
Ceiling | $ | 40.31 | $ | — | $ | — | $ | — | ||||||||||
Floor | $ | 32.89 | $ | — | $ | — | $ | — | ||||||||||
Fixed Price WTI Swaps | ||||||||||||||||||
Volume (Bbls/day) | 76,703 | 10,000 | — | — | ||||||||||||||
Weighted average price per Bbl: | $ | 28.99 | $ | 32.77 | $ | — | $ | — | ||||||||||
Basis Swaps - Argus WTI Midland (a) | ||||||||||||||||||
Volume (Bbls/day) | 15,000 | 15,000 | 15,000 | — | ||||||||||||||
Weighted average price per Bbl | $ | (0.94) | $ | (0.94) | $ | (0.94) | $ | — | ||||||||||
Basis Swaps - NYMEX WTI / ICE Brent (b) | ||||||||||||||||||
Volume (Bbls/day) | 5,000 | 5,000 | 5,000 | 808 | ||||||||||||||
Weighted average price per Bbl | $ | (7.24) | $ | (7.24) | $ | (7.24) | $ | (7.24) | ||||||||||
Basis Swaps - NYMEX WTI / MEH (c) | ||||||||||||||||||
Volume (Bbls/day) | 26,813 | — | — | — | ||||||||||||||
Weighted average price per Bbl | $ | (0.75) | $ | — | $ | — | $ | — | ||||||||||
NYMEX Roll Basis Swaps | ||||||||||||||||||
Volume (Bbls/day) | 43,571 | 60,000 | 10,000 | — | ||||||||||||||
Weighted average price per Bbl | $ | (1.62) | $ | (1.58) | $ | (1.94) | $ | — |
(a) | The basis differential price is indexed against Argus WTI Midland. |
(b) | The basis differential price is indexed against Intercontinental Exchange ("ICE") Brent and NYMEX WTI. |
(c) | The basis differential price is indexed against Argus WTI Houston. |
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SOURCE Marathon Oil Corporation
HOUSTON, May 1, 2020 /PRNewswire/ -- Marathon Oil Corporation (NYSE: MRO) announced today that effective May 4, 2020, Mike Henderson will be promoted to senior vice president, operations, and will oversee the U.S. Resource Play businesses.
In October 2017, Mr. Henderson was appointed vice president, Resource Plays North, with responsibility for Oklahoma and North Dakota, after having served in successive regional vice president roles since 2013 and managing operations in Oklahoma, North Dakota and Wyoming. Prior to his work in the Resource Plays, Mr. Henderson was development manager for International Production Operations in Equatorial Guinea and has been involved in a number of Marathon Oil's major projects in Equatorial Guinea, Norway and the Gulf of Mexico over the course of his career.
In conjunction with this change, Mr. Little announced his retirement and will cease serving as the Company's executive vice president, operations and transition to the role of executive vice president, advisor to the chief executive officer with oversight for Equatorial Guinea operations. Mr. Little will remain with the Company through year-end 2020.
"Mitch has been a key member of the Marathon team for over 32 years and I want to thank him for his significant leadership and contributions to the Company," said Lee Tillman, Marathon Oil Chairman, President and CEO. "Mike brings significant leadership and technical capabilities to his new, expanded role, responsible for Marathon's US Resources Plays, and I believe he will provide strong continuity within the executive leadership team."
Media Relations Contacts:
Stephanie Gentry: 713-296-3307
Investor Relations Contacts:
Guy Baber: 713-296-1892
John Reid: 713-296-4380
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SOURCE Marathon Oil Corporation
HOUSTON, April 29, 2020 /PRNewswire/ -- Marathon Oil Corporation (NYSE:MRO) announced today that its Board of Directors approved changing its 2020 Annual Meeting of Stockholders to a virtual-only, audio-only meeting. The previously announced physical in-person gathering has been cancelled. The new format is intended only for this year and is being done to support the well-being of the Company's employees, stockholders and other associates, as well as the related protocols that have been or may be imposed by federal, state and local governments in response to continued public health concerns related to the COVID-19 (Coronavirus) pandemic.
The Annual Meeting will be held on the same date and time as previously announced, Wednesday, May 27, 2020 at 10:00 a.m. Central Time. Stockholders of record as of the close of business on March 31, 2020, the record date, are entitled to participate in the Annual Meeting, submit questions, vote their shares and view the list of stockholders entitled to vote at www.virtualshareholdermeeting.com/MRO2020, after entering the 16-digit control number found on the proxy card, voting instruction form or notice previously received. This website will contain instructions for participation in the virtual Annual Meeting, and technical assistance will be available during registration and during the Annual Meeting. Individuals who do not have a control number may attend the Annual Meeting as a guest.
Marathon Oil encourages stockholders to read the proxy materials previously distributed and urges them to vote in advance of the Annual Meeting at www.proxyvote.com, or by one of the other methods described in the proxy materials. The proxy card and voting instruction form included with the proxy materials will not be updated to reflect the change from an in-person meeting to a virtual-only meeting and may continue to be used to vote shares in connection with the Annual Meeting. If a stockholder has already voted, no additional action is required.
For additional information regarding accessing and participating in the Annual Meeting, please refer to the Company's supplemental proxy materials filed with the Securities and Exchange Commission on April 29, 2020.
Forward-looking Statements
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact. Words such as "anticipate," "believe," "could," "estimate," "expect," "forecast," "guidance," "intend," "may," "outlook," "plan," "project," "seek," "should," "target," "will," "would," or similar words may be used to identify forward-looking statements; however, the absence of these words does not mean that the statements are not forward-looking. While the Company believes its assumptions concerning future events are reasonable, a number of factors could cause actual results to differ materially from those projected, including, but not limited to: conditions in the oil and gas industry, including supply/demand levels for crude oil and condensate, NGLs and natural gas and the resulting impact on price; changes in political or economic conditions in the U.S. and Equatorial Guinea; liability resulting from litigation; non-performance by third parties of contractual obligations; unforeseen hazards such as weather conditions, a health pandemic (including COVID-19), acts of war or terrorist acts and the government or military response thereto; cyber-attacks; changes in safety, health, environmental, tax and other regulations, requirements or initiatives, including initiatives addressing the impact of global climate change, air emissions, or water management; other geological, operating and economic considerations; and the risk factors, forward-looking statements and challenges and uncertainties described in the Company's 2019 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other public filings and press releases, available at www.marathonoil.com. Except as required by law, the Company undertakes no obligation to revise or update any forward-looking statements as a result of new information, future events or otherwise.
Media Relations Contacts:
Lee Warren: 713-296-4103
Stephanie Gentry: 713-296-3307
Investor Relations Contacts:
Guy Baber: 713-296-1892
John Reid: 713-296-4380
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SOURCE Marathon Oil Corporation
HOUSTON, April 16, 2020 /PRNewswire/ -- Marathon Oil Corporation (NYSE: MRO) announced today it plans to issue its first quarter 2020 earnings news release on Wednesday, May 6, after the close of U.S. financial markets.
The company will conduct a conference call, which will be webcast live, on Thursday, May 7, at 9 a.m. ET. The call will include forward-looking information.
All of the above information, including earnings releases and other investor-related material, can be accessed by visiting Marathon Oil's website at https://www.MarathonOil.com.
Media Relations Contacts:
Lee Warren: 713-296-4103
Stephanie Gentry: 713-296-3307
Investor Relations Contacts:
Guy Baber: 713-296-1892
John Reid: 713-296-4380
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SOURCE Marathon Oil Corporation
HOUSTON, April 8, 2020 /PRNewswire/ -- In response to current market conditions, Marathon Oil (NYSE: MRO) has announced an updated 2020 capital spending budget and has also provided a hedging update. The revised capital budget of $1.3 billion or less represents a cumulative budget reduction of $1.1 billion from initial 2020 capital spending guidance. 2020 capital spending is now expected to be approximately 50% below actual capital spending in 2019.
In addition to previously announced actions to fully suspend Resource Play Exploration (REx) and Oklahoma activity, the Company now plans to suspend further drilling activity in the Northern Delaware, with only a limited number of wells to sales expected through the balance of the year. The Company will continue to optimize development plans in the Bakken and Eagle Ford. The revised 2020 capital budget of $1.3 billion or less includes the implementation of second quarter frac holidays in the Bakken and Eagle Ford, before transitioning to a lower and more continuous drilling and completion program over the second half of 2020 in both Basins. Marathon Oil retains flexibility to adjust capital spending plans as necessary in response to a dynamic macro environment.
"In light of extreme commodity price weakness and anticipated ongoing demand impacts, we have dramatically reduced activity in REx, Oklahoma and the Northern Delaware, and plan to take frac holidays in both the Bakken and Eagle Ford during second quarter. We're maintaining our returns-first mindset with a focus on preserving value through the cycle," said Marathon Oil Chairman, President, and CEO Lee Tillman. "We believe our high quality, multi-basin portfolio affords us ample flexibility to swiftly and appropriately respond to changing market conditions, and we currently expect to transition to a more continuous but lower level of activity in both the Bakken and Eagle Ford during the second half of the year. Against a highly volatile and uncertain environment, these decisive actions are designed first and foremost to protect our balance sheet and our hard earned financial strength. We remain investment grade at all primary rating agencies, with recent reviews by both Fitch and S&P, and maintain a strong liquidity position with no near-term debt maturities. Our financial strength, high quality portfolio, and ongoing focus on reducing our cost structure position us well to navigate this extraordinary time for our industry."
Marathon Oil has also provided a hedging update, with new and restructured hedges designed to protect near-term crude oil downside and basis differentials.
Marathon Oil plans to provide a more comprehensive update to its revised 2020 business plan as part of its first quarter earnings release in May.
The following table sets forth outstanding derivative contracts as of April 7, 2020, and the weighted average prices for those contracts:
2020 | 2021 | |||||||||||||||||||||
Crude Oil | First | Second | Third | Fourth | Full Year | |||||||||||||||||
NYMEX WTI Three-Way Collars | ||||||||||||||||||||||
Volume (Bbls/day) | 80,000 | — | 80,000 | 80,000 | — | |||||||||||||||||
Weighted average price per Bbl: | ||||||||||||||||||||||
Ceiling | $ | 66.12 | — | $ | 64.40 | $ | 64.40 | — | ||||||||||||||
Floor | $ | 55.00 | — | $ | 55.00 | $ | 55.00 | — | ||||||||||||||
Sold put | $ | 47.75 | — | $ | 48.00 | $ | 48.00 | — | ||||||||||||||
NYMEX WTI Two-Way Collars | ||||||||||||||||||||||
Volume (Bbls/day) | — | 40,000 | — | — | — | |||||||||||||||||
Weighted average price per Bbl:: | ||||||||||||||||||||||
Ceiling | — | $ | 40.31 | — | — | — | ||||||||||||||||
Floor | — | $ | 32.89 | — | — | — | ||||||||||||||||
Fixed Price WTI Swaps | ||||||||||||||||||||||
Volume (Bbls/day) | — | 60,000 | — | — | — | |||||||||||||||||
Weighted average price per Bbl: | — | $ | 30.73 | — | — | — | ||||||||||||||||
Basis Swaps - Argus WTI Midland (a) | ||||||||||||||||||||||
Volume (Bbls/day) | 15,000 | 15,000 | 15,000 | 15,000 | — | |||||||||||||||||
Weighted average price per Bbl: | $ | (0.94) | $ | (0.94) | $ | (0.94) | $ | (0.94) | — | |||||||||||||
Basis Swaps - NYMEX WTI / ICE Brent (b) | ||||||||||||||||||||||
Volume (Bbls/day) | 5,000 | 5,000 | 5,000 | 5,000 | 808 | |||||||||||||||||
Weighted average price per Bbl: | $ | (7.24) | $ | (7.24) | $ | (7.24) | $ | (7.24) | $ | (7.24) | ||||||||||||
Basis Swaps - NYMEX WTI / MEH (c) | ||||||||||||||||||||||
Volume (Bbls/day) | — | 26,813 | — | — | — | |||||||||||||||||
Weighted average price per Bbl: | — | $ | (0.75) | — | — | — | ||||||||||||||||
NYMEX Roll Basis Swaps | ||||||||||||||||||||||
Volume (Bbls/day) | — | 43,571 | — | — | — | |||||||||||||||||
Weighted average price per Bbl: | — | $ | (1.62) | — | — | — | ||||||||||||||||
Natural Gas | ||||||||||||||||||||||
Three-Way Collars | ||||||||||||||||||||||
Volume (MMBtu/day) | 100,000 | — | — | — | — | |||||||||||||||||
Weighted average price per MMBtu: | ||||||||||||||||||||||
Ceiling | $ | 3.32 | — | — | — | — | ||||||||||||||||
Floor | $ | 2.75 | — | — | — | — | ||||||||||||||||
Sold put | $ | 2.25 | — | — | — | — |
(a) | The basis differential price is indexed against Argus WTI Midland. |
(b) | The basis differential price is indexed against Intercontinental Exchange ("ICE") Brent and NYMEX WTI. |
(c) | The basis differential price is indexed against Argus WTI Houston. |
Forward-looking Statements
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, including without limitation statements regarding the Company's future capital spending budgets and allocations (including development capital budget and resource play leasing and exploration spend), future performance, corporate-level cash returns on invested capital, business strategy, asset quality, drilling plans, production guidance, cash margins, leasing and exploration activities, production, oil growth and other plans and objectives for future operations, are forward-looking statements. Words such as "anticipate," "believe," "could," "estimate," "expect," "forecast," "guidance," "intend," "may," "outlook," "plan," "project," "seek," "should," "target," "will," "would," or similar words may be used to identify forward-looking statements; however, the absence of these words does not mean that the statements are not forward-looking. While the Company believes its assumptions concerning future events are reasonable, a number of factors could cause actual results to differ materially from those projected, including, but not limited to: conditions in the oil and gas industry, including supply/demand levels and the resulting impact on price; changes in expected reserve or production levels; changes in political or economic conditions in the U.S. and Equatorial Guinea; changes in foreign currency exchange rates, interest rates, inflation rates, and global and domestic market conditions; capital available for exploration and development; risks related to the Company's hedging activities; well production timing; drilling and operating risks; availability of drilling rigs, materials and labor, including the costs associated therewith; difficulty in obtaining necessary approvals and permits; non-performance by third parties of contractual obligations; hazards such as weather conditions, a prolonged health pandemic, acts of war or terrorist acts and the government or military response thereto; cyber-attacks; changes in safety, health, environmental, tax and other regulations, requirements or initiatives, including initiatives addressing the impact of global climate change, flaring, or water disposal; other geological, operating and economic considerations; and the risk factors, forward-looking statements and challenges and uncertainties described in the Company's 2019 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other public filings and press releases, available at www.marathonoil.com. Except as required by law, the Company undertakes no obligation to revise or update any forward-looking statements as a result of new information, future events or otherwise.
Media Relations Contacts:
Lee Warren: 713-296-4103
Investor Relations Contacts:
Guy Baber: 713-296-1892
John Reid: 713-296-4380
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SOURCE Marathon Oil Corporation
HOUSTON, March 10, 2020 /PRNewswire/ -- In light of the dramatic fall in commodity prices, Marathon Oil (NYSE: MRO) has announced an immediate capital spending reduction of at least $500 million relative to its previously communicated 2020 capital spending budget of $2.4 billion. The revised capital spending budget of $1.9 billion or less represents an approximate 30% reduction in comparison to actual 2019 capital spending.
Specifically, the Company will take the following steps to reduce its 2020 budget:
"In response to the recent commodity price volatility from simultaneous supply and demand shocks, we're taking swift and decisive action to defend our cash flow generation, protect our balance sheet, and fund our dividend," said Marathon Oil Chairman, President, and CEO Lee Tillman. "We believe our foundational work is already in place with a high quality multi-basin portfolio that affords us the flexibility that we're exercising today. Our balance sheet reflects a conservative leverage profile and significant liquidity. And, at every level of the Company we continue to strive to relentlessly drive down our cash flow breakeven, while operating safely and responsibly. This framework has served us well, and it positions us to navigate a challenging oil price environment ahead."
Marathon Oil maintains a strong financial foundation, ending 2019 with approximately $3.9 billion of liquidity and no near term debt maturities. Liquidity at year end 2019 consisted of $858 million of cash and cash equivalents and an untapped $3 billion credit facility. The unsecured credit facility is backed by 18 leading global financial institutions, and the maturity date was recently extended to May 2023. Marathon Oil is rated as investment grade at all three major rating agencies and has no significant debt maturities until November of 2022.
The Company will continue to monitor commodity price developments and retains flexibility to adjust capital spending plans further in response to a dynamic environment, with minimal long-term commitments for services and materials. The Company plans to provide a more comprehensive update to its revised 2020 business plan as part of its first quarter earnings release in May.
Forward-looking Statements
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, including without limitation statements regarding the Company's future capital budgets and allocations (including development capital budget and resource play leasing and exploration spend), future performance, organic free cash flow, free cash flow, corporate-level cash returns on invested capital, business strategy, asset quality, drilling plans, production guidance, cash margins, leasing and exploration activities, production, oil growth and other plans and objectives for future operations, are forward-looking statements. Words such as "anticipate," "believe," "could," "estimate," "expect," "forecast," "guidance," "intend," "may," "outlook," "plan," "project," "seek," "should," "target," "will," "would," or similar words may be used to identify forward-looking statements; however, the absence of these words does not mean that the statements are not forward-looking. While the Company believes its assumptions concerning future events are reasonable, a number of factors could cause actual results to differ materially from those projected, including, but not limited to: conditions in the oil and gas industry, including supply/demand levels and the resulting impact on price; changes in expected reserve or production levels; changes in political or economic conditions in the U.S. and Equatorial Guinea; changes in foreign currency exchange rates, interest rates, inflation rates, and global and domestic market conditions; capital available for exploration and development; risks related to the Company's hedging activities; well production timing; drilling and operating risks; availability of drilling rigs, materials and labor, including the costs associated therewith; difficulty in obtaining necessary approvals and permits; non-performance by third parties of contractual obligations; unforeseen hazards such as weather conditions, health pandemics, acts of war or terrorist acts and the government or military response thereto; cyber-attacks; changes in safety, health, environmental, tax and other regulations, requirements or initiatives, including initiatives addressing the impact of global climate change, flaring, or water disposal; other geological, operating and economic considerations; and the risk factors, forward-looking statements and challenges and uncertainties described in the Company's 2019 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other public filings and press releases, available at www.marathonoil.com. Except as required by law, the Company undertakes no obligation to revise or update any forward-looking statements as a result of new information, future events or otherwise.
Media Relations Contacts:
Lee Warren: 713-296-4103
Investor Relations Contacts:
Guy Baber: 713-296-1892
John Reid: 713-296-4380
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SOURCE Marathon Oil Corporation
HOUSTON, Jan. 29, 2020 /PRNewswire/ -- Marathon Oil Corporation (NYSE: MRO) announced today that the Company's board of directors has declared a dividend of 5 cents per share on Marathon Oil Corporation common stock. The dividend is payable on March 10, 2020, to stockholders of record on Feb. 19, 2020.
For more information on Marathon Oil Corporation, visit the Company's website at https://www.marathonoil.com.
Media Relations Contact:
Lee Warren: 713-296-4103
Investor Relations Contacts:
Guy Baber: 713-296-1892
John Reid: 713-296-4380
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SOURCE Marathon Oil Corporation
HOUSTON, Jan. 21, 2020 /PRNewswire/ -- Marathon Oil Corporation (NYSE: MRO) announced today it plans to issue its fourth quarter and full-year 2019 earnings news release and details of the company's 2020 capital program on Wednesday, Feb. 12, after the close of U.S. financial markets.
The company will conduct a conference call, which will be webcast live, on Thursday, Feb. 13, at 9 a.m. ET. The call will include forward-looking information.
All of the above information, including earnings releases and other investor-related material, can be accessed by visiting Marathon Oil's website at https://www.MarathonOil.com.
Media Relations Contact:
Lee Warren: 713-296-4103
Investor Relations Contacts:
Guy Baber: 713-296-1892
John Reid: 713-296-4380
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SOURCE Marathon Oil Corporation
HOUSTON, Nov. 6, 2019 /PRNewswire/ -- Marathon Oil Corporation (NYSE: MRO) today reported third quarter 2019 net income of $165 million, or $0.21 per diluted share, which includes the impact of certain items not typically represented in analysts' earnings estimates and that would otherwise affect comparability of results. Adjusted net income was $111 million, or $0.14 per diluted share. Net operating cash flow was $737 million, or $757 million before changes in working capital.
Highlights
"Third quarter again featured exceptional operational performance across our advantaged multi-basin portfolio that is translating to differentiated financial outcomes in our peer space," said Chairman, President and CEO Lee Tillman. "We're driving our corporate returns higher, have just reported our seventh consecutive quarter of organic free cash flow generation, and have returned over 20% of our year-to-date cash flow from operations back to our shareholders. Since the beginning of 2018, we've repurchased $1 billion of our own shares, representing approximately 7% of outstanding share count, funded entirely by post-dividend organic free cash flow. Additionally, we are generating success across all elements of our comprehensive resource capture framework. We've added about three years of new inventory company-wide, while upgrading the returns on hundreds of drilling locations in the Bakken and Eagle Ford. Our REx team is advancing exploration and appraisal activity in two oil plays of scale, with encouraging early well results in a new Texas Delaware oil play. We also signed an agreement for a synergistic bolt-on acquisition in the Eagle Ford.
"Looking ahead to 2020, our framework for success will not change: corporate returns first, free cash flow at conservative pricing and return of capital back to shareholders. We expect our 2020 planning basis to be set on $50/bbl WTI with an enterprise free cash flow break-even below that level. With our focus on delivering financial outcomes competitive with the broader market, we're planning for capital spend to decrease year-over-year and accordingly for our U.S. oil growth to moderate. Organic enhancement success and industry leading returns support a higher relative capital allocation to the Eagle Ford and Bakken, driving growth for both assets, as we take full advantage of our multi-basin model. We'll continue to be guided by our unwavering commitment to capital discipline and low enterprise breakeven oil price to position Marathon Oil for success across a wide range of commodity price environments in 2020 and beyond."
United States (U.S.)
U.S. production averaged 339,000 net barrels of oil equivalent per day (boed) for third quarter 2019, including 201,000 net barrels of oil per day (bopd). Oil production was above the top end of the third quarter guidance range and up 17% from the year-ago quarter on a divestiture-adjusted basis. U.S. unit production costs were $4.75 per barrel of oil equivalent (boe), down 23% from the year-ago quarter, the lowest quarterly average unit production costs since becoming an independent exploration and production company in 2011.
EAGLE FORD: Marathon Oil's Eagle Ford production averaged 107,000 net boed in the third quarter 2019. The Company brought 35 gross Company-operated wells to sales in the quarter. Third quarter activity again featured impressive results in both core Karnes County and the expanded core of Atascosa County, highlighted by a new quarterly record for average 30-day initial oil productivity for the asset. Karnes activity included five Austin Chalk wells that achieved an average 30-day initial production (IP) rate of 2,550 boed (78% oil). In Atascosa, nine wells achieved an average 30-day IP rate of 1,780 boed (87% oil). The Middle McCowen four-well pad in Atascosa featured average lateral lengths of 10,900 feet, a new lateral length record for the asset, highlighting optionality for capital efficient, long lateral development across parts of Atascosa County. Completed well cost per lateral foot remains on a declining trend, with the third quarter average approximately 10% below 2018.
BAKKEN: Marathon Oil's Bakken production averaged 109,000 net boed in the third quarter 2019. The Company brought 30 gross Company-operated wells to sales. The Company continues to deliver impressive capital efficiency, highlighted by strong productivity and declining completed well costs, which averaged $4.9 million, or about 20% below the 2018 average. The successful delineation of Marathon Oil's broader Hector acreage continued during third quarter, with the four-well Herbert pad in South Hector achieving an average 30-day IP rate of 1,720 boed (86% oil) with an average completed well cost of approximately $4.5 million.
OKLAHOMA: Marathon Oil's Oklahoma production averaged 84,000 net boed in the third quarter 2019. The Company brought 19 gross Company-operated wells to sales. Marathon Oil continues to deliver strong results from the overpressured STACK, where the Marjorie and Lloyd four-well per section infills achieved an average 30-day IP rate of 1,740 boed (66% oil). The average completed well cost for the Marjorie and Lloyd pads was $6.3 million normalized to a 10,000 foot lateral. In the SCOOP, Marathon Oil brought online three Springer wells with strong early performance, achieving an average 30-day IP rate of 1,460 boed (72% oil), or 325 boed per 1,000-foot lateral.
NORTHERN DELAWARE: Marathon Oil's Northern Delaware production averaged 30,000 net boed in the third quarter 2019. The Company brought 10 gross Company-operated wells to sales, including a mix of development and delineation wells. Marathon Oil continues to make significant progress in advancing learnings, reducing its cost structure and improving margins. Third quarter again featured strong Upper Wolfcamp productivity in the Malaga area, where five development wells achieved an average 30-day IP rate of 1,850 boed (62% oil), or 365 boed per 1,000-foot lateral, with completed well costs per lateral foot 20% below the 2018 average.
Resource Capture
Marathon Oil is successfully executing across all three elements of its comprehensive framework for resource capture and inventory enhancement. The combination of organic enhancement in the Eagle Ford and Bakken, REx success in a new Texas Delaware oil play, and an accretive bolt-on in the Eagle Ford has added over 1,000 operated locations and meaningfully upgraded the returns for hundreds of locations in the Eagle Ford and Bakken.
Through its REx program, Marathon Oil is now advancing exploration and appraisal activity in two oil plays of scale: a new Texas Delaware oil play and the Louisiana Austin Chalk.
In the Texas Delaware, Marathon Oil has established over 60,000 net acres of contiguous leasehold prospective for stacked Woodford and Meramec oil targets. Two wells have been drilled and completed with initial results demonstrating strong productivity, low water cuts, and shallow decline profiles. The Company's position in this new play was captured at an entry cost of less than $2,400 per acre through a combination of organic leasing and targeted acquisitions, with some acreage pending close in the fourth quarter.
Third quarter REx capital expenditures were $35 million, with year-to-date expenditures of $109 million through end of third quarter. Including the leasing and acquisitions to core up its new Texas Delaware play which are anticipated to close in fourth quarter, full year 2019 REx capital spending is now expected to be approximately $280 million, an increase of $80 million from prior guidance of $200 million.
In the Louisiana Austin Chalk, Marathon Oil is progressing exploration drilling and acquiring 3D seismic data. Consistent with its focus on capital discipline, the Company has secured Equinor as a non-operating, 25% working interest partner in the Louisiana Austin Chalk play. On a cash basis, this transaction helps fund incremental REx capital spending relative to prior guidance.
Outside of the REx program, in the fourth quarter Marathon Oil signed an agreement to acquire approximately 18,000 contiguous and largely undeveloped net acres adjacent to the Company's existing northeast Eagle Ford leasehold. The $185 million bolt-on includes approximately 7,000 net boed of current production, associated midstream infrastructure, and cores up a 70-well, long lateral development with potential upside. The transaction has an effective date of Nov. 1, 2019 and is expected to close by Jan. 31, 2020.
International
International production averaged 87,000 net boed for third quarter 2019. Unit production costs averaged $1.98 per boe. Marathon Oil closed on the sale of its U.K. business July 1, removing $966 million of asset retirement obligations. Coupled with the second quarter close on the sale of the Company's last block in Kurdistan, Marathon Oil's international portfolio has been simplified to only include the free cash flow generative integrated business in Equatorial Guinea.
Cash Flow and Development Capital
Net cash provided by operations was $737 million during third quarter 2019, or $757 million before changes in working capital.
Third quarter development capital expenditures were $646 million, with year-to-date development capital of $1.9 billion. The Company's 2019 development capital budget remains unchanged at $2.4 billion.
Organic free cash flow during third quarter totaled $81 million post-dividend, bringing year-to-date organic free cash flow generation to $298 million.
Production Guidance
For fourth quarter 2019, the Company forecasts total U.S. oil production of 190,000 to 200,000 net bopd. Fourth quarter 2019 international oil production guidance is 12,000 to 16,000 net bopd. Full year 2019 divestiture-adjusted oil production growth guidance is now expected to be 11% for total Company and 13% for U.S., above initial guidance of 10% and 12% respectively.
Corporate
The Company has executed $300 million of year-to-date share repurchases, returning additional capital to shareholders beyond the $122 million of year-to-date dividend payments. Since the beginning of 2018, Marathon Oil has repurchased $1 billion of its own shares, representing approximately 7% of its outstanding share count, funded entirely by post-dividend organic free cash flow generation of over $1 billion over the same period.
The Company recently completed three separate transactions that together will further strengthen the balance sheet and generate annualized cash cost savings of approximately $6 million. On Sept. 24, 2019, the Company entered into a Fourth Amendment to its Amended and Restated Credit Agreement to extend the maturity date to 2023 and reduce the size from $3.4 billion to $3.0 billion. On Oct. 1, 2019, the Company closed a remarketing to investors of $600 million of sub-series A bonds with tenors ranging from 3.5 to 7 years achieving a weighted average coupon rate of 2.1%. On Oct. 3, 2019, the Company closed the early redemption of its $600 million 2.7% Senior Unsecured Notes due 2020. The Company's next debt maturity will be in 2022. Together, the three transactions are leverage neutral, extend maturities, and reflect Marathon Oil's ongoing commitment to maintaining a strong balance sheet. Marathon Oil is rated investment grade at all three primary credit ratings agencies.
Total liquidity as of Sept. 30 was approximately $4.2 billion, which consisted of $1.2 billion in cash and cash equivalents and an undrawn revolving credit facility of $3.0 billion.
The adjustments to net income for third quarter 2019 totaled $54 million before tax, primarily due to the income impact associated with unrealized gains on derivative instruments, coupled with gains on disposal of assets.
As of Nov. 5, 2019, the Company's open crude hedge positions for 2019 include an average of 80,000 bopd at a weighted average floor price of $56.75 per barrel and a weighted average ceiling price of $74.19 per bbl, hedged through three-way collars. The Company has also hedged 42,945 bopd of 2020 oil production at a weighted average floor price of $55.00 per barrel and a weighted average ceiling price of $65.58 per barrel.
A slide deck and Quarterly Investor Packet will be posted to the Company's website following this release today, Nov. 6. On Thursday, Nov. 7, at 9:00 a.m. ET, the Company will conduct a question and answer webcast/call, which will include forward-looking information. The live webcast, replay and all related materials will be available at https://www.marathonoil.com/Investors.
Non-GAAP Measures
In analyzing and planning for its business, Marathon Oil supplements its use of GAAP financial measures with non-GAAP financial measures, including adjusted net income, adjusted net income per share, organic free cash flow and net cash provided by operations before changes in working capital.
Adjusted net income is defined as net income adjusted for gain/loss on dispositions, certain property impairments, unrealized derivative gain/loss on commodity instruments, pension settlement losses and other items that could be considered "non-operating" or "non-core" in nature. Management believes adjusted net income and adjusted net income per share are useful to investors as additional tools to meaningfully represent the Company's operating performance and to compare Marathon to certain competitors.
Organic free cash flow is defined as net cash provided by operating activities adjusted for working capital, exploration costs (other than well costs), development capital expenditures, dividends, and EG LNG return of capital. Management believes this is useful to investors as a measure of the Company's ability to fund its capital expenditure programs and dividend payments, service debt, and other distributions to stockholders. Management also uses net cash provided by operations before changes in working capital to demonstrate the Company's ability to generate cash quarterly or year-to-date by eliminating differences caused by the timing of certain working capital items.
These non-GAAP financial measures reflect an additional way of viewing aspects of the business that, when viewed with GAAP results may provide a more complete understanding of factors and trends affecting the business and are a useful tool to help management and investors make informed decisions about Marathon Oil's financial and operating performance. These measures should not be considered in isolation or as alternatives to their most directly comparable GAAP financial measures. A reconciliation to their most directly comparable GAAP financial measures can be found in our investor package on our website at www.marathonoil.com and in the tables below. Marathon Oil strongly encourages investors to review the Company's consolidated financial statements and publicly filed reports in their entirety and not rely on any single financial measure.
Forward-looking Statements
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, including without limitation statements regarding the Company's 2019 capital budget and allocations (including development capital budget and resource play leasing and exploration spend), future performance, organic free cash flow, free cash flow, corporate-level cash returns on invested capital, business strategy, asset quality, drilling plans, production guidance, cash margins, asset sales and acquisitions, leasing and exploration activities, production, oil growth and other plans and objectives for future operations, are forward-looking statements. Words such as "anticipate," "believe," "could," "estimate," "expect," "forecast," "guidance," "intend," "may," "outlook," "plan," "project," "seek," "should," "target," "will," "would," or similar words may be used to identify forward-looking statements; however, the absence of these words does not mean that the statements are not forward-looking. While the Company believes its assumptions concerning future events are reasonable, a number of factors could cause actual results to differ materially from those projected, including, but not limited to: conditions in the oil and gas industry, including supply/demand levels and the resulting impact on price; changes in expected reserve or production levels; changes in political or economic conditions in the jurisdictions in which the Company operates, including changes in foreign currency exchange rates, interest rates, inflation rates, and global and domestic market conditions; capital available for exploration and development; our ability to complete our announced acquisitions on the timeline currently anticipated, if at all; risks related to the Company's hedging activities; well production timing; drilling and operating risks; availability of drilling rigs, materials and labor, including the costs associated therewith; difficulty in obtaining necessary approvals and permits; non-performance by third parties of contractual obligations; unforeseen hazards such as weather conditions, acts of war or terrorist acts and the government or military response thereto; cyber-attacks; changes in safety, health, environmental, tax and other regulations, requirements or initiatives, including initiatives addressing the impact of global climate change, flaring, or water disposal; other geological, operating and economic considerations; and the risk factors, forward-looking statements and challenges and uncertainties described in the Company's 2018 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other public filings and press releases, available at www.marathonoil.com. Except as required by law, the Company undertakes no obligation to revise or update any forward-looking statements as a result of new information, future events or otherwise.
Media Relations Contact:
Lee Warren: 713-296-4103
Investor Relations Contacts:
Guy Baber: 713-296-1892
John Reid: 713-296-4380
Consolidated Statements of Income (Unaudited) Three Months Ended Sept. 30 June 30 Sept. 30 (In millions, except per share data) 2019 2019 2018 Revenues and other income: Revenues from contracts with customers $ 1,249 $ 1,381 $ 1,538 Net gain (loss) on commodity derivatives 47 16 (70) Income from equity method investments 21 31 64 Net gain (loss) on disposal of assets 22 (8) 16 Other income 6 13 119 Total revenues and other income 1,345 1,433 1,667 Costs and expenses: Production 163 193 215 Shipping, handling and other operating 138 170 152 Exploration 22 26 56 Depreciation, depletion and amortization 622 605 626 Impairments — 18 8 Taxes other than income 81 79 86 General and administrative 82 87 101 Total costs and expenses 1,108 1,178 1,244 Income from operations 237 255 423 Net interest and other (64) (64) (58) Other net periodic benefit costs 2 2 (8) Income before income taxes 175 193 357 Provision (benefit) for income taxes 10 32 103 Net income $ 165 $ 161 $ 254 Adjusted Net Income Net income $ 165 $ 161 $ 254 Adjustments for special items (pre-tax): Net (gain) loss on disposal of assets (22) 8 (16) Proved property impairments — 18 8 Pension settlement — 2 10 Unrealized (gain) loss on derivative instruments (33) (11) (19) Reduction of U.K. ARO estimated costs — — (113) Other 1 11 — Benefit for income taxes related to special items — — 76 Adjustments for special items (54) 28 (54) Adjusted net income (a) $ 111 $ 189 $ 200 Per diluted share: Net income $ 0.21 $ 0.20 $ 0.30 Adjusted net income (a) $ 0.14 $ 0.23 $ 0.24 Weighted average diluted shares 803 814 849
(a) | Non-GAAP financial measure. See "Non-GAAP Measures" above for further discussion. |
Supplemental Statistics (Unaudited) Three Months Ended Sept. 30 June 30 Sept. 30 (In millions) 2019 2019 2018 Segment income United States $ 180 $ 215 $ 201 International 43 96 116 Segment income 223 311 317 Not allocated to segments (58) (150) (63) Net income $ 165 $ 161 $ 254 Exploration expenses United States $ 22 $ 26 $ 55 International — — 1 Total $ 22 $ 26 $ 56 Cash flows Net cash provided by operating activities $ 737 $ 797 $ 963 Minus: changes in working capital (20) 26 103 Net cash provided by operations before changes in working capital (a) $ 757 $ 771 $ 860 Cash additions to property, plant and equipment $ (672) $ (647) $ (769)
(a) | Non-GAAP financial measure. See "Non-GAAP Measures" above for further discussion. |
Supplemental Statistics (Unaudited) Three Months Ended Nine Months Ended (In millions) Sept. 30, 2019 Sept. 30, 2019 Organic Free Cash Flow Net cash provided by operating activities $ 737 $ 2,049 Adjustments: Changes in working capital 20 151 Exploration costs other than well costs 6 22 Development capital expenditures (646) (1,851) Dividends (40) (122) EG LNG return of capital and other 4 49 Organic free cash flow (a) $ 81 $ 298
(a) | Non-GAAP financial measure. See "Non-GAAP Measures" above for further discussion. |
Supplemental Statistics (Unaudited) | Three Months Ended | |||||
Sept. 30 | June 30 | Sept. 30 | ||||
(mboed) | 2019 | 2019 | 2018 | |||
Net production | ||||||
United States | 339 | 332 | 304 | |||
International | 87 | 103 | 115 | |||
Total net production | 426 | 435 | 419 |
Supplemental Statistics (Unaudited) | Three Months Ended | |||||
Sept. 30 | June 30 | Sept. 30 | ||||
(mboed) | 2019 | 2019 | 2018 | |||
Net production | ||||||
United States | 339 | 332 | 304 | |||
Less: Divestitures (a) | 1 | 2 | 4 | |||
Total divestiture-adjusted United States | 338 | 330 | 300 | |||
International | 87 | 103 | 115 | |||
Less: Divestitures (b) | — | 12 | 16 | |||
Total divestiture-adjusted International | 87 | 91 | 99 | |||
Total net production divestiture-adjusted (a)(b) | 425 | 421 | 399 |
(a) | The Company closed on the sale of certain United States non-core conventional assets in third quarter 2018, first quarter 2019, and third quarter 2019. The production volumes relating to these dispositions have been removed from all corresponding prior periods to derive the divestiture-adjusted United States net production. |
(b) | Divestitures include volumes associated with the sale of our U.K. business, which closed in third quarter 2019, and the sale of our non-operated interest in Kurdistan, which closed in second quarter 2019. These production volumes have been removed from historical periods above in arriving at total divestiture-adjusted International net production. |
Supplemental Statistics (Unaudited) Three Months Ended Sept. 30 June 30 Sept. 30 2019 2019 2018 United States - net sales volumes Crude oil and condensate (mbbld) 201 190 173 Eagle Ford 63 61 66 Bakken 92 88 72 Oklahoma 23 21 18 Northern Delaware 18 15 12 Other United States 5 5 5 Natural gas liquids (mbbld) 61 64 58 Eagle Ford 22 25 26 Bakken 9 8 6 Oklahoma 23 24 21 Northern Delaware 6 6 4 Other United States 1 1 1 Natural gas (mmcfd) 462 459 433 Eagle Ford 134 139 137 Bakken 46 42 36 Oklahoma 229 223 208 Northern Delaware 36 36 30 Other United States 17 19 22 Total United States (mboed) 339 330 303 International - net sales volumes Crude oil and condensate (mbbld) 16 30 27 Equatorial Guinea 16 20 18 United Kingdom — 8 6 Other International — 2 3 Natural gas liquids (mbbld) 10 10 11 Equatorial Guinea 10 10 11 United Kingdom — — — Natural gas (mmcfd) 373 403 441 Equatorial Guinea 373 392 426 United Kingdom (a) — 11 15 Total International (mboed) 88 107 112 Total Company - net sales volumes (mboed) 427 437 415 Net sales volumes of equity method investees LNG (mtd) 4,590 5,321 6,152 Methanol (mtd) 1,036 1,134 1,334 Condensate and LPG (boed) 11,586 11,080 11,942
(a) | Includes natural gas acquired for injection and subsequent resale. |
Supplemental Statistics (Unaudited) | Three Months Ended | ||||||||
Sept. 30 | June 30 | Sept. 30 | |||||||
2019 | 2019 | 2018 | |||||||
United States - average price realizations (a) | |||||||||
Crude oil and condensate ($ per bbl) (b) | $ | 55.09 | $ | 59.18 | $ | 68.51 | |||
Eagle Ford | 57.99 | 63.10 | 72.00 | ||||||
Bakken | 53.48 | 56.84 | 67.26 | ||||||
Oklahoma | 55.09 | 58.66 | 70.14 | ||||||
Northern Delaware | 54.16 | 55.33 | 55.01 | ||||||
Other United States (c) | 51.74 | 66.21 | 66.67 | ||||||
Natural gas liquids ($ per bbl) | $ | 11.37 | $ | 14.60 | $ | 28.07 | |||
Eagle Ford | 11.40 | 13.19 | 28.62 | ||||||
Bakken | 7.16 | 18.68 | 31.92 | ||||||
Oklahoma | 13.20 | 14.39 | 25.29 | ||||||
Northern Delaware | 10.02 | 15.02 | 31.44 | ||||||
Other United States (c) | 15.21 | 17.25 | 34.71 | ||||||
Natural gas ($ per mcf) (d) | $ | 1.92 | $ | 1.89 | $ | 2.55 | |||
Eagle Ford | 2.29 | 2.51 | 2.84 | ||||||
Bakken | 1.83 | 1.70 | 2.64 | ||||||
Oklahoma | 1.75 | 1.78 | 2.40 | ||||||
Northern Delaware | 0.84 | 0.18 | 2.24 | ||||||
Other United States (c) | 3.69 | 2.26 | 2.48 | ||||||
International - average price realizations | |||||||||
Crude oil and condensate ($ per bbl) | $ | 46.04 | $ | 58.21 | $ | 64.08 | |||
Equatorial Guinea | 46.04 | 54.38 | 61.23 | ||||||
United Kingdom | — | 68.40 | 73.28 | ||||||
Other International | — | 55.83 | 62.30 | ||||||
Natural gas liquids ($ per bbl) | $ | 1.00 | $ | 1.67 | $ | 2.04 | |||
Equatorial Guinea (d) | 1.00 | 1.00 | 1.00 | ||||||
United Kingdom | — | 37.63 | 50.37 | ||||||
Natural gas ($ per mcf) | $ | 0.24 | $ | 0.35 | $ | 0.50 | |||
Equatorial Guinea (d) | 0.24 | 0.24 | 0.24 | ||||||
United Kingdom | — | 4.25 | 8.60 | ||||||
Benchmark | |||||||||
WTI crude oil (per bbl) | $ | 56.44 | $ | 59.91 | $ | 69.43 | |||
Brent (Europe) crude oil (per bbl) (e) | $ | 61.93 | $ | 68.92 | $ | 75.22 | |||
Mont Belvieu NGLs (per bbl) (f) | $ | 15.16 | $ | 17.64 | $ | 31.25 | |||
Henry Hub natural gas (per mmbtu) (g) | $ | 2.23 | $ | 2.64 | $ | 2.90 |
(a) | Excludes gains or losses on commodity derivative instruments. |
(b) | Inclusion of realized gains (losses) on crude oil derivative instruments would have affected average price realizations by $0.72, $0.32 and $(5.70) for third quarter 2019, second quarter 2019, and third quarter 2018. |
(c) | Includes sales volumes from the sale of certain non-core proved properties in our International and United States segments. |
(d) | Represents fixed prices under long-term contracts with Alba Plant LLC, Atlantic Methanol Production Company LLC and/or Equatorial Guinea LNG Holdings Limited, which are equity method investees. The Alba Plant LLC processes the NGLs and then sells secondary condensate, propane, and butane at market prices. Marathon Oil includes its share of income from each of these equity method investees in the International segment. |
(e) | Average of monthly prices obtained from Energy Information Administration website. |
(f) | Bloomberg Finance LLP: Y-grade Mix NGL of 55% ethane, 25% propane, 5% butane, 8% isobutane and 7% natural gasoline. |
(g) | Settlement date average per mmbtu. |
Q4 2019 Production | Oil Production (mbbld) | Equivalent Production (mboed) | |||||||||||||||
Q4 2019 | Q3 2019 | Q4 2018 | Q4 2019 | Q3 2019 | Q4 2018 | ||||||||||||
Low | High | Divestiture- | Divestiture- | Low | High | Divestiture- | Divestiture- | ||||||||||
Net production | |||||||||||||||||
United States | 190 | 200 | 201 | 179 | 320 | 330 | 338 | 304 | |||||||||
International | 12 | 16 | 15 | 16 | 80 | 90 | 87 | 93 | |||||||||
Total net production | 202 | 216 | 216 | 195 | 400 | 420 | 425 | 397 |
The following table sets forth outstanding derivative contracts as of Nov. 5, 2019, and the weighted average prices for those contracts:
2019 | 2020 | 2021 | ||||||||||||
Crude Oil | Fourth Quarter | Full Year | Full Year | |||||||||||
NYMEX WTI Three-Way Collars | ||||||||||||||
Volume (Bbls/day) | 80,000 | 42,945 | — | |||||||||||
Weighted average price per Bbl: | ||||||||||||||
Ceiling | $ | 74.19 | $ | 65.58 | — | |||||||||
Floor | $ | 56.75 | $ | 55.00 | — | |||||||||
Sold put | $ | 49.50 | $ | 47.77 | — | |||||||||
Basis Swaps - Argus WTI Midland (a) | ||||||||||||||
Volume (Bbls/day) | 15,000 | 15,000 | — | |||||||||||
Weighted average price per Bbl | $ | (1.40) | $ | (0.94) | — | |||||||||
Basis Swaps - Net Energy Clearbrook (b) | ||||||||||||||
Volume (Bbls/day) | 2,000 | — | — | |||||||||||
Weighted average price per Bbl | $ | (3.33) | — | — | ||||||||||
Basis Swaps - NYMEX WTI / ICE Brent (c) | ||||||||||||||
Volume (Bbls/day) | 5,000 | 5,000 | 808 | |||||||||||
Weighted average price per Bbl | $ | (7.24) | $ | (7.24) | $ | (7.24) | ||||||||
Basis Swaps - Argus WTI Houston (d) | ||||||||||||||
Volume (Bbls/day) | 10,000 | — | — | |||||||||||
Weighted average price per Bbl | $ | 5.51 | $ | — | $ | — | ||||||||
NYMEX Roll Basis Swaps | ||||||||||||||
Volume (Bbls/day) | 60,000 | — | — | |||||||||||
Weighted average price per Bbl | $ | 0.38 | — | — | ||||||||||
Natural Gas | ||||||||||||||
Three-Way Collars (e) | ||||||||||||||
Volume (MMBtu/day) | — | 24,863 | — | |||||||||||
Weighted average price per MMBtu: | ||||||||||||||
Ceiling | — | 3.32 | — | |||||||||||
Floor | — | 2.75 | — | |||||||||||
Sold put | — | 2.25 | — |
(a) | The basis differential price is indexed against Argus WTI Midland. |
(b) | The basis differential price is indexed against Net Energy Canada Bakken SW at Clearbrook ("UHC"). |
(c) | The basis differential price is indexed against International Commodity Exchange ("ICE") Brent and NYMEX WTI. |
(d) | The basis differential price is indexed against Argus WTI Houston. |
(e) | Between Oct. 1, 2019 and Nov. 5, 2019, we entered into 100,000 MMBtu/day of three-way collars for January - March 2020 with a ceiling price of $3.32, a floor price of $2.75, and a sold put price of $2.25. |
View original content to download multimedia:http://www.prnewswire.com/news-releases/marathon-oil-reports-third-quarter-2019-results-300953255.html
SOURCE Marathon Oil Corporation
HOUSTON, Oct. 30, 2019 /PRNewswire/ -- Marathon Oil Corporation (NYSE: MRO) announced today that the Company's board of directors has declared a dividend of 5 cents per share on Marathon Oil Corporation common stock. The dividend is payable on Dec. 10, 2019, to stockholders of record on Nov. 20, 2019.
For more information on Marathon Oil Corporation, visit the Company's website at https://www.marathonoil.com.
Media Relations Contact:
Lee Warren: 713-296-4103
Investor Relations Contacts:
Guy Baber: 713-296-1892
John Reid: 713-296-4380
View original content to download multimedia:http://www.prnewswire.com/news-releases/marathon-oil-corporation-declares-third-quarter-2019-dividend-300948583.html
SOURCE Marathon Oil Corporation
HOUSTON, Oct. 7, 2019 /PRNewswire/ -- Marathon Oil Corporation (NYSE: MRO) announced today it plans to issue its third quarter 2019 earnings news release on Wednesday, Nov. 6, after the close of U.S. financial markets.
The Company will conduct a conference call, which will be webcast live, on Thursday, Nov. 7, at 9 a.m. ET. The call will include forward-looking information.
All of the above information, including earnings releases and other investor-related material, can be accessed by visiting Marathon Oil's website at https://www.MarathonOil.com.
Media Relations Contact
Katie Altshuler: 405-365-8948
Investor Relations Contacts
Guy Baber: 713-296-1892
John Reid: 713-296-4380
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SOURCE Marathon Oil Corporation
HOUSTON, Oct. 3, 2019 /PRNewswire/ -- Marathon Oil Corporation (NYSE: MRO; the "Company") announced today that it has completed three separate transactions that together will further strengthen the balance sheet and generate annualized cash cost savings of approximately $6 million.
On September 24, 2019, the Company entered into a Fourth Amendment to its Amended and Restated Credit Agreement (the "Credit Agreement") to extend the maturity date to May 28, 2023 and to reduce the size from $3.393 billion to $3.0 billion.
On October 1, 2019, the Company closed a remarketing to investors of sub-series A bonds (the "Sub-Series A Bonds"), which are part of the $1 billion St. John the Baptist, State of Louisiana Revenue Refunding Bonds (Marathon Oil Corporation Project) Series 2017 (the "2017 Bonds") issued and purchased by the Company on December 18, 2017. The Sub-Series A Bonds were priced on September 12, 2019 and will accrue interest at the interest rates set forth below.
Interest | Mandatory | Maturity | ||
Sub-Series A Bonds | Par Amount | Rate | Purchase Date | Date |
Sub-series A-1 Bonds: | $200 million | 2.00% | April 1, 2023 | June 1, 2037 |
Sub-series A-2 Bonds: | $200 million | 2.10% | July 1, 2024 | June 1, 2037 |
Sub-series A-3 Bonds: | $200 million | 2.20% | July 1, 2026 | June 1, 2037 |
The Company will continue to own the remaining $400 million of the 2017 Bonds and has the right to convert and remarket them to investors at any time up to the 2037 maturity date.
Today, the Company closed the early redemption of its $600 million 2.7% Senior Unsecured Notes due 2020. The Company's next debt maturity will be its $1 billion 2.8% Senior Unsecured Notes due in 2022.
Together, the three transactions are leverage-neutral, extend maturities and reflect Marathon Oil Corporation's ongoing commitment to maintaining a strong balance sheet, providing the foundation to execute the Company's business plan across a broad range of commodity prices.
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact are forward-looking statements. While the Company believes that its assumptions concerning future events are reasonable, a number of factors could cause results to differ materially risk factors, forward-looking statements and challenges and uncertainties described in the Company's 2018 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other public filings and press releases, available at www.marathonoil.com. Except as required by law, the Company undertakes no obligation to revise or update any forward-looking statements as a result of new information, future events or otherwise.
Media Relations Contact
Katie Altshuler: 405-365-8948
Investor Relations Contacts
Guy Baber: 713-296-1892
John Reid: 713-296-4380
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SOURCE Marathon Oil Corporation
HOUSTON, Sept. 4, 2019 /PRNewswire/ -- Marathon Oil Corporation (NYSE: MRO) announced today that it has launched a conversion and remarketing of $600 million of sub-series A bonds (the "Sub-Series 2017A Bonds") which are part of the $1 billion St. John the Baptist, State of Louisiana (the "Issuer") Revenue Refunding Bonds (Marathon Oil Corporation Project) Series 2017 (the "2017 Bonds") issued and purchased by the Company on December 18, 2017. Assuming a successful remarketing of all of the Sub-Series 2017A Bonds, the Company will continue to own the remaining $400 million of the 2017 Bonds and has the right to convert and remarket them to investors at any time up to the 2037 maturity date. The Company will continue to be obligated to service the principal and interest payments associated with the $1 billion 2017 Bonds. The proceeds from the conversion and remarketing will be used to pay the purchase price of the converted 2017 Bonds owned by the Company on the closing date. The Company does not intend for this conversion and remarketing to result in a long-term increase in the Company's indebtedness.
The Company anticipates that the closing of the remarketing of the Sub-Series 2017A Bonds will take place on or about October 1, 2019, subject to customary closing conditions. J.P. Morgan Securities LLC will act as the lead remarketing agent for the offering.
Terms of the Sub-Series 2017A Bonds and the sale thereof will be as described in the reoffering circular relating to the Sub-Series 2017A Bonds which will be available on the website of the Municipal Securities Rulemaking Board via its Electronic Municipal Market Access system at www.msrb.org no later than 7 business days after the pricing of the Sub-Series 2017A Bonds, which is currently anticipated to be on or around September 12, 2019.
This press release shall not constitute an offer to sell or a solicitation of an offer to buy any securities, nor shall there be any sale of securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
Forward-looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, including statements regarding the completion of the proposed remarketing, are forward-looking statements. While the Company believes that its assumptions concerning future events are reasonable, a number of factors could cause results to differ materially including the failure to satisfy closing conditions, our ability to remarket the bonds as well as risk factors, forward-looking statements and challenges and uncertainties described in the Company's 2018 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other public filings and press releases, available at www.marathonoil.com. Except as required by law, the Company undertakes no obligation to revise or update any forward-looking statements as a result of new information, future events or otherwise.
Media Relations Contact:
Katie Altshuler: 405-365-8948
Investor Relations Contacts:
Guy Baber: 713-296-1892
John Reid: 713-296-4380
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SOURCE Marathon Oil Corporation
HOUSTON, Sept. 3, 2019 /PRNewswire/ -- Marathon Oil Corporation (NYSE: MRO) announced today that it sent an irrevocable notice of early redemption to the holders of the Company's $600 million 2.7% Senior Notes Due 2020 (the "Notes").
Pursuant to the Indenture, dated as of February 26, 2002 (the "Indenture"), and the Notes, the early redemption date is set to October 3, 2019 (the "Redemption Date").
In accordance with the terms and conditions set forth in the Indenture and the Notes, the Notes will be redeemed at a redemption price equal to the greater of (i) 100% of the principal amount of the Notes to be redeemed or (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the Notes to be redeemed (exclusive of interest accrued to the date of redemption) discounted to the date of redemption on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the then current Treasury Rate (as defined in the Notes) plus 20 basis points, plus, in either case, accrued but unpaid interest on the principal amount being redeemed to the Redemption Date.
This press release shall not constitute an offer to sell or a solicitation of an offer to buy any securities, nor shall there be any sale of securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
Forward-looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, including statements regarding the early redemption, are forward-looking statements. While the Company believes that its assumptions concerning future events are reasonable, a number of factors could cause results to differ materially including our ability to complete the early redemption as well as risk factors, forward-looking statements and challenges and uncertainties described in the Company's 2018 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other public filings and press releases, available at www.marathonoil.com. Except as required by law, the Company undertakes no obligation to revise or update any forward-looking statements as a result of new information, future events or otherwise.
Media Relations Contact:
Katie Altshuler: 405-365-8948
Investor Relations Contacts:
Guy Baber: 713-296-1892
John Reid: 713-296-4380
View original content to download multimedia:http://www.prnewswire.com/news-releases/marathon-oil-announces-early-redemption-of-600-million-2-7-senior-notes-300910938.html
SOURCE Marathon Oil Corporation
HOUSTON, Aug. 27, 2019 /PRNewswire/ -- Marathon Oil Corporation (NYSE: MRO) announced today that Lee Tillman, Chairman, President and CEO, will present at the Barclays CEO Energy-Power Conference in New York on Wednesday, Sept. 4 at 7:45 a.m. ET.
A live webcast of the remarks as well as the accompanying slides will be accessible via Marathon Oil's website at www.MarathonOil.com/Investors. The presentation will include forward-looking information.
For more information on Marathon Oil, please visit the Company's website at https://www.MarathonOil.com.
Media Relations Contact:
Katie Altshuler: 405-365-8948
Investor Relations Contacts:
Guy Baber: 713-296-1892
John Reid: 713-296-4380
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SOURCE Marathon Oil Corporation
HOUSTON, Aug. 7, 2019 /PRNewswire/ -- Marathon Oil Corporation (NYSE: MRO) today reported second quarter 2019 net income of $161 million, or $0.20 per diluted share, which includes the impact of certain items not typically represented in analysts' earnings estimates and that would otherwise affect comparability of results. Adjusted net income was $189 million, or $0.23 per diluted share. Net operating cash flow was $797 million, or $771 million before changes in working capital.
Highlights
"Second quarter featured exceptional operational performance across our advantaged multi-basin portfolio driving compelling bottom-line financial outcomes," said Chairman, President and CEO Lee Tillman. "Through differentiated execution, we're improving our corporate returns, generating meaningful free cash flow, and returning significant capital back to our shareholders. Already in 2019, we've returned about 25% of our net operating cash flow back to our shareholders. Since the beginning of 2018, we have repurchased $950 million of our own shares, funded entirely by post-dividend organic free cash flow, equating to about a 6% reduction in our share count. The refreshed $1.5 billion share repurchase authorization positions us well to continue executing against our well-defined strategic framework. This is our sixth consecutive quarter of organic free cash flow generation, and our underlying free cash flow momentum only continues to improve. We believe our unwavering commitment to capital discipline and low enterprise breakeven oil price delivers success across a wide range of commodity price environments."
United States (U.S.)
U.S. production averaged 332,000 net barrels of oil equivalent per day (boed) for second quarter 2019, including 192,000 net barrels of oil per day (bopd), both above the top end of the second quarter guidance ranges. Oil production was up 17% from the year-ago quarter on a divestiture-adjusted basis. U.S. unit production costs were $4.89 per barrel of oil equivalent (boe), down 14% from the year-ago quarter, the lowest quarterly average unit production costs since becoming an independent exploration and production company in 2011.
EAGLE FORD: Marathon Oil's Eagle Ford production averaged 109,000 net boed in the second quarter 2019. The Company brought 41 gross Company-operated wells to sales in the quarter. Second quarter activity featured impressive results across the Company's acreage position. In Karnes County, a four-well pad achieved an average 30-day initial production (IP) rate of 3,230 boed (67% oil), establishing a new pad record for the Company in the Eagle Ford. The Company continued to deliver strong results from the expanded core of Atascosa County, where 15 wells achieved an average 30-day IP rate of 1,860 boed (81% oil). As the Company continues its efforts to uplift performance outside of the Karnes and Atascosa core, enhanced completion techniques were successfully applied in Gonzales County, where a six-well pad achieved an average 30-day IP rate of 1,600 boed (70% oil). Despite a majority of wells to sales outside of Karnes County during second quarter, the Eagle Ford asset achieved a quarterly record for average 30 day initial well productivity, while continuing to drive a trend of lower completed well costs per lateral foot.
BAKKEN: Marathon Oil's Bakken production averaged 104,000 net boed in the second quarter 2019. The Company brought 30 gross Company-operated wells to sales, balanced between Myrmidon and Hector. The Company continues to deliver impressive capital efficiency, highlighted by a six-well pad in Myrmidon that delivered an average 30-day IP rate of 3,160 boed (78% oil) at an average completed well cost of $5.3 million. The average completed well cost for all of Marathon Oil's second quarter wells was $5.2 million, down approximately 15% in comparison to the 2018 average.
OKLAHOMA: Marathon Oil's Oklahoma production averaged 82,000 net boed in the second quarter 2019. The Company brought 18 gross Company-operated wells to sales. Marathon Oil continues to deliver strong results from the overpressured STACK, where the eight-well per section Mike Stroud infill achieved an average 30-day IP rate of 2,480 boed (38% oil) with average completed well costs more than 30% below the previously drilled parent well. The Company continues to make significant progress in reducing its cost structure and improving efficiencies. Marathon Oil's two most recent overpressured STACK infills achieved an average completed well cost of $6.3 million normalized to a 10,000 foot lateral.
NORTHERN DELAWARE: Marathon Oil's Northern Delaware production averaged 28,000 net boed in the second quarter 2019. The Company brought 16 gross Company-operated wells to sales, including a mix of development and delineation wells in both the Malaga and Red Hills areas. Marathon Oil continues to make significant progress in reducing its cost structure and improving margins, with second quarter cash costs down approximately 10% sequentially on a per boe basis, 100% of water on pipe for all second quarter wells to sales, and a rising percentage of total oil production on pipe. Second quarter again featured strong Upper Wolfcamp productivity in Malaga, where 11 development wells achieved an average 30-day IP rate of 1,520 boed (63% oil), or 345 boed per one thousand foot lateral, with completed well costs per lateral foot 5% below the 2018 average.
International
International production averaged 103,000 net boed for second quarter 2019. During the quarter, E.G. production returned to normal levels after successful completion of the planned triennial turnaround during first quarter 2019. Second quarter 2019 International unit production costs averaged $4.72 per boe.
During the second quarter, the Company closed on the sale of its 15% participating interest in the Atrush Block in Kurdistan, marking a complete country exit. Subsequent to quarter end on July 1, the Company closed on the sale of its U.K business, representing the tenth country exit since 2013.
Excluding Kurdistan and U.K operations, second quarter international production averaged 91,000 net boed with unit production costs of $2.21 per boe. As of July 1, the Company's international operations are limited to the integrated business in Equatorial Guinea.
Cash Flow, Development Capital and Resource Capture
Net cash provided by operations was $797 million during second quarter 2019, or $771 million before changes in working capital.
Second quarter development capital expenditures were $636 million, with year-to-date development capital of $1.2 billion. The Company's 2019 development capital budget remains unchanged at $2.4 billion.
Outside of the development capital budget, second quarter resource play leasing and exploration (REx) capital expenditures were $37 million, with year-to-date expenditures of $74 million. The Company's 2019 REx capital budget remains unchanged at $200 million.
Organic free cash flow during second quarter totaled $137 million post-dividend, bringing year-to-date organic free cash flow generation to $217 million.
Production Guidance
For third quarter 2019, the Company forecasts total U.S. oil production of 190,000 to 200,000 net bopd. Third quarter 2019 international oil production guidance is 12,000 to 16,000 net bopd, reflecting both the U.K. and Kurdistan asset divestitures. Adjusted full year 2019 production guidance now excludes divested U.K. and Kurdistan volumes for the second half of 2019, but otherwise remains unchanged. There is no change to annual divestiture-adjusted oil production growth guidance of 10% for total Company and 12% for U.S.
Corporate
The Company has executed $250 million of year-to-date share repurchases, returning additional capital to shareholders beyond the $82 million of year-to-date dividend payments. On a year-to-date basis, the Company has returned approximately 25% of net operating cash flow back to shareholders. Since the beginning of 2018, Marathon Oil has repurchased $950 million of its own shares, representing approximately 6% of its outstanding share count, funded entirely by post-dividend organic free cash flow generation of over $1 billion over the same period. The board of directors authorized an increase in the remaining share repurchase authorization to a total of $1.5 billion, representing an increase in authorization of $950 million.
Total liquidity as of June 30 was approximately $4.4 billion, which consisted of $1.0 billion in cash and cash equivalents and an undrawn revolving credit facility of $3.4 billion. End of quarter cash and cash equivalents reflect cash balances classified as held for sale associated with U.K. properties, but do not include the $95 million of sales proceeds received upon July 1 close.
Marathon Oil's credit rating was upgraded to investment grade by Moody's Investor's Service on April 24. The Company's credit rating was also upgraded from BBB- to BBB by S&P on June 19. Marathon Oil is rated investment grade at all three primary credit ratings agencies.
The adjustments to net income for second quarter 2019 totaled $28 million before tax, primarily due to impairments and loss on sale associated with asset dispositions, partially offset by the income impact associated with unrealized gains on derivative instruments.
As of August 5, 2019, the Company's open crude hedge positions for 2019 include an average of 80,000 bopd at a weighted average floor price of $56.75 per bbl and a weighted average ceiling price of $74.19 per bbl, hedged through three-way collars. The Company has also hedged 19,945 bopd of 2020 oil production at a weighted average floor price of $55.00 per bbl.
A slide deck and Quarterly Investor Packet will be posted to the Company's website following this release today, Aug. 7. On Thursday, Aug. 8, at 9:00 a.m. ET, the Company will conduct a question and answer webcast/call, which will include forward-looking information. The live webcast, replay and all related materials will be available at https://www.marathonoil.com/Investors.
Definitions
Organic free cash flow - Operating cash flow before working capital (excluding exploration costs other than well costs), less development capital expenditures, less dividends, plus other.
Non-GAAP Measures
In analyzing and planning for its business, Marathon Oil supplements its use of GAAP financial measures with non-GAAP financial measures, including adjusted net income, adjusted net income per share, net cash provided by operations before changes in working capital, and organic free cash flow because the Company believes this information is useful to investors to help evaluate the Company's financial performance between periods and to compare the Company's performance to certain competitors. Management also uses net cash provided by operations before changes in working capital to demonstrate the Company's ability to internally fund capital expenditures, pay dividends and service debt. The Company considers adjusted net income and adjusted net income per share as another way to meaningfully represent the Company's operational performance for the period presented; consequently, it excludes the impact of mark-to-market accounting, impairment charges, dispositions, pension settlements, and other items that could be considered "non-operating" or "non-core" in nature. These non-GAAP financial measures reflect an additional way of viewing aspects of the business that, when viewed with GAAP results may provide a more complete understanding of factors and trends affecting the business and are a useful tool to help management and investors make informed decisions about Marathon Oil's financial and operating performance. These measures should not be considered substitutes for their most directly comparable GAAP financial measures. A reconciliation to their most directly comparable GAAP financial measures can be found in our investor package on our website at www.marathonoil.com and in the tables below. Marathon Oil strongly encourages investors to review the Company's consolidated financial statements and publicly filed reports in their entirety and not rely on any single financial measure.
Forward-looking Statements
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, including without limitation statements regarding the Company's 2019 capital budget and allocations (including development capital budget and resource play leasing and exploration spend), future performance, organic free cash flow, free cash flow, corporate-level cash returns on invested capital, business strategy, asset quality, drilling plans, production guidance, cash margins, asset sales and acquisitions, leasing and exploration activities, production, oil growth and other plans and objectives for future operations, are forward-looking statements. Words such as "anticipate," "believe," "could," "estimate," "expect," "forecast," "guidance," "intend," "may," "plan," "project," "seek," "should," "target," "will," "would," or similar words may be used to identify forward-looking statements; however, the absence of these words does not mean that the statements are not forward-looking. While the Company believes its assumptions concerning future events are reasonable, a number of factors could cause actual results to differ materially from those projected, including, but not limited to: conditions in the oil and gas industry, including supply/demand levels and the resulting impact on price; changes in expected reserve or production levels; changes in political or economic conditions in the jurisdictions in which the Company operates; risks related to the Company's hedging activities; capital available for exploration and development; drilling and operating risks; well production timing; availability of drilling rigs, materials and labor, including associated costs; difficulty in obtaining necessary approvals and permits; non-performance by third parties of contractual obligations; unforeseen hazards such as weather conditions, acts of war or terrorist acts and the government or military response thereto; cyber-attacks; changes in safety, health, environmental, tax and other regulations; other geological, operating and economic considerations; and the risk factors, forward-looking statements and challenges and uncertainties described in the Company's 2018 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other public filings and press releases, available at www.marathonoil.com. Except as required by law, the Company undertakes no obligation to revise or update any forward-looking statements as a result of new information, future events or otherwise.
Media Relations Contact:
Lee Warren: 713-296-4103
Investor Relations Contacts:
Guy Baber: 713-296-1892
John Reid: 713-296-4380
Consolidated Statements of Income (Unaudited) | Three Months Ended | ||||||||
June 30 | Mar. 31 | June 30 | |||||||
(In millions, except per share data) | 2019 | 2019 | 2018 | ||||||
Revenues and other income: | |||||||||
Revenues from contracts with customers | $ | 1,381 | $ | 1,200 | $ | 1,447 | |||
Net gain (loss) on commodity derivatives | 16 | (91) | (152) | ||||||
Income from equity method investments | 31 | 11 | 60 | ||||||
Net gain (loss) on disposal of assets | (8) | 42 | 50 | ||||||
Other income | 13 | 35 | 12 | ||||||
Total revenues and other income | 1,433 | 1,197 | 1,417 | ||||||
Costs and expenses: | |||||||||
Production | 193 | 187 | 205 | ||||||
Shipping, handling and other operating | 170 | 154 | 126 | ||||||
Exploration | 26 | 59 | 65 | ||||||
Depreciation, depletion and amortization | 605 | 554 | 612 | ||||||
Impairments | 18 | 6 | 34 | ||||||
Taxes other than income | 79 | 72 | 65 | ||||||
General and administrative | 87 | 94 | 105 | ||||||
Total costs and expenses | 1,178 | 1,126 | 1,212 | ||||||
Income from operations | 255 | 71 | 205 | ||||||
Net interest and other | (64) | (49) | (65) | ||||||
Other net periodic benefit costs | 2 | 5 | — | ||||||
Income before income taxes | 193 | 27 | 140 | ||||||
Provision (benefit) for income taxes | 32 | (147) | 44 | ||||||
Net income | $ | 161 | $ | 174 | $ | 96 | |||
Adjusted Net Income | |||||||||
Net income | $ | 161 | $ | 174 | $ | 96 | |||
Adjustments for special items (pre-tax): | |||||||||
Net (gain) loss on disposal of assets | 8 | (42) | (50) | ||||||
Proved property impairments | 18 | 6 | 34 | ||||||
Pension settlement | 2 | — | 2 | ||||||
Unrealized (gain) loss on derivative instruments | (11) | 113 | 45 | ||||||
Other | 11 | 12 | (8) | ||||||
Benefit for income taxes related to special items | — | (7) | 7 | ||||||
Adjustments for special items | 28 | 82 | 30 | ||||||
Adjusted net income (a) | $ | 189 | $ | 256 | $ | 126 | |||
Per diluted share: | |||||||||
Net income | $ | 0.20 | $ | 0.21 | $ | 0.11 | |||
Adjusted net income (a) | $ | 0.23 | $ | 0.31 | $ | 0.15 | |||
Weighted average diluted shares | 814 | 820 | 855 |
(a) | Non-GAAP financial measure. See "Non-GAAP Measures" above for further discussion. |
Supplemental Statistics (Unaudited) | Three Months Ended | ||||||||
June 30 | Mar. 31 | June 30 | |||||||
(In millions) | 2019 | 2019 | 2018 | ||||||
Segment income | |||||||||
United States | $ | 215 | $ | 132 | $ | 123 | |||
International | 96 | 61 | 142 | ||||||
Segment income | 311 | 193 | 265 | ||||||
Not allocated to segments | (150) | (19) | (169) | ||||||
Net income | $ | 161 | $ | 174 | $ | 96 | |||
Exploration expenses | |||||||||
United States | $ | 26 | $ | 59 | $ | 64 | |||
International | — | — | 1 | ||||||
Total | $ | 26 | $ | 59 | $ | 65 | |||
Cash flows | |||||||||
Net cash provided by operating activities | $ | 797 | $ | 515 | $ | 767 | |||
Minus: changes in working capital | 26 | (157) | (82) | ||||||
Net cash provided by operations before changes in working capital (a) | $ | 771 | $ | 672 | $ | 849 | |||
Cash additions to property, plant and equipment | $ | (647) | $ | (615) | $ | (638) |
(a) | Non-GAAP financial measure. See "Non-GAAP Measures" above for further discussion. |
Supplemental Statistics (Unaudited) | Three Months Ended | Six Months Ended | ||||
(In millions) | June 30, 2019 | June 30, 2019 | ||||
Organic Free Cash Flow | ||||||
Net cash provided by operating activities | $ | 797 | $ | 1,312 | ||
Minus: changes in working capital | 26 | (131) | ||||
Minus: exploration costs other than well costs | (6) | (16) | ||||
Development capital expenditures | (636) | (1,205) | ||||
Dividends | (41) | (82) | ||||
EG LNG return of capital and other | 37 | 45 | ||||
Organic free cash flow (a) | $ | 137 | $ | 217 |
(a) | Non-GAAP financial measure. See "Non-GAAP Measures" above for further discussion. |
Supplemental Statistics (Unaudited) | Three Months Ended | |||||
June 30 | Mar. 31 | June 30 | ||||
(mboed) | 2019 | 2019 | 2018 | |||
Net production | ||||||
United States | 332 | 296 | 298 | |||
International | 103 | 92 | 121 | |||
Total net production | 435 | 388 | 419 |
Supplemental Statistics (Unaudited) | Three Months Ended | |||||
June 30 | Mar. 31 | June 30 | ||||
(mboed) | 2019 | 2019 | 2018 | |||
Net production | ||||||
United States | 332 | 296 | 298 | |||
Less: Divestitures (a) | 1 | — | 6 | |||
Total divestiture-adjusted United States | 331 | 296 | 292 | |||
International | 103 | 92 | 121 | |||
Less: Divestitures (b) | 12 | 14 | 18 | |||
Total divestiture-adjusted International | 91 | 78 | 103 | |||
Total net production divestiture-adjusted (a)(b) | 422 | 374 | 395 |
(a) | The Company closed on the sale of certain United States non-core conventional assets primarily in the Gulf of Mexico in third quarter 2018 and first quarter 2019. The production volumes relating to these dispositions have been removed from all corresponding prior periods to derive the divestiture-adjusted United States net production. |
(b) | Divestitures include volumes associated with the sale of our U.K. business, which closed in third quarter 2019, the sale of our non-operated interest in Kurdistan, which closed in second quarter 2019 and third quarter 2018. These production volumes have been removed from historical periods above in arriving at total divestiture-adjusted International net production. |
Supplemental Statistics (Unaudited) | Three Months Ended | |||||
June 30 | Mar. 31 | June 30 | ||||
2019 | 2019 | 2018 | ||||
United States - net sales volumes | ||||||
Crude oil and condensate (mbbld) | 190 | 177 | 168 | |||
Eagle Ford | 61 | 61 | 63 | |||
Bakken | 88 | 79 | 69 | |||
Oklahoma | 21 | 16 | 18 | |||
Northern Delaware | 15 | 15 | 11 | |||
Other United States (a) | 5 | 6 | 7 | |||
Natural gas liquids (mbbld) | 64 | 55 | 57 | |||
Eagle Ford | 25 | 23 | 22 | |||
Bakken | 8 | 7 | 7 | |||
Oklahoma | 24 | 18 | 24 | |||
Northern Delaware | 6 | 6 | 3 | |||
Other United States (a) | 1 | 1 | 1 | |||
Natural gas (mmcfd) | 459 | 392 | 435 | |||
Eagle Ford | 139 | 127 | 127 | |||
Bakken | 42 | 36 | 35 | |||
Oklahoma | 223 | 173 | 230 | |||
Northern Delaware | 36 | 33 | 18 | |||
Other United States (a) | 19 | 23 | 25 | |||
Total United States (mboed) | 330 | 297 | 298 | |||
International - net sales volumes | ||||||
Crude oil and condensate (mbbld) | 30 | 23 | 32 | |||
Equatorial Guinea | 20 | 12 | 18 | |||
United Kingdom | 8 | 9 | 10 | |||
Other International | 2 | 2 | 4 | |||
Natural gas liquids (mbbld) | 10 | 8 | 12 | |||
Equatorial Guinea | 10 | 8 | 11 | |||
United Kingdom | — | — | 1 | |||
Natural gas (mmcfd) | 403 | 342 | 461 | |||
Equatorial Guinea | 392 | 330 | 443 | |||
United Kingdom (b) | 11 | 12 | 18 | |||
Total International (mboed) | 107 | 88 | 121 | |||
Total Company - net sales volumes (mboed) | 437 | 385 | 419 | |||
Net sales volumes of equity method investees | ||||||
LNG (mtd) | 5,321 | 4,636 | 6,141 | |||
Methanol (mtd) | 1,134 | 1,003 | 1,316 | |||
Condensate and LPG (boed) | 11,080 | 9,890 | 12,689 |
(a) | The three months ended June 30, 2018 includes sales volumes from the sale of certain United States non-core conventional assets primarily in the Gulf of Mexico which closed in third quarter 2018 and first quarter 2019. |
(b) | Includes natural gas acquired for injection and subsequent resale. |
Supplemental Statistics (Unaudited) | Three Months Ended | ||||||||
June 30 | Mar. 31 | June 30 | |||||||
2019 | 2019 | 2018 | |||||||
United States - average price realizations (a) | |||||||||
Crude oil and condensate ($ per bbl) (b) | $ | 59.18 | $ | 54.05 | $ | 66.03 | |||
Eagle Ford | 63.10 | 57.69 | 68.77 | ||||||
Bakken | 56.84 | 52.15 | 64.41 | ||||||
Oklahoma | 58.66 | 53.39 | 66.90 | ||||||
Northern Delaware | 55.33 | 48.97 | 60.01 | ||||||
Other United States (c) | 66.21 | 56.19 | 64.42 | ||||||
Natural gas liquids ($ per bbl) | $ | 14.60 | $ | 15.66 | $ | 22.09 | |||
Eagle Ford | 13.19 | 17.05 | 22.68 | ||||||
Bakken | 18.68 | 16.17 | 25.52 | ||||||
Oklahoma | 14.39 | 13.66 | 20.75 | ||||||
Northern Delaware | 15.02 | 15.27 | 19.10 | ||||||
Other United States (c) | 17.25 | 18.92 | 25.62 | ||||||
Natural gas ($ per mcf) (d) | $ | 1.89 | $ | 2.93 | $ | 2.18 | |||
Eagle Ford | 2.51 | 2.99 | 2.82 | ||||||
Bakken | 1.70 | 3.77 | 2.46 | ||||||
Oklahoma | 1.78 | 2.90 | 1.84 | ||||||
Northern Delaware | 0.18 | 1.93 | 1.48 | ||||||
Other United States (c) | 2.26 | 2.89 | 2.11 | ||||||
International - average price realizations | |||||||||
Crude oil and condensate ($ per bbl) | $ | 58.21 | $ | 53.93 | $ | 66.12 | |||
Equatorial Guinea | 54.38 | 44.36 | 60.30 | ||||||
United Kingdom | 68.40 | 67.62 | 77.15 | ||||||
Other International | 55.83 | 47.76 | 64.73 | ||||||
Natural gas liquids ($ per bbl) | $ | 1.67 | $ | 1.96 | $ | 2.91 | |||
Equatorial Guinea (d) | 1.00 | 1.00 | 0.99 | ||||||
United Kingdom | 37.63 | 38.10 | 43.20 | ||||||
Natural gas ($ per mcf) | $ | 0.35 | $ | 0.48 | $ | 0.52 | |||
Equatorial Guinea (d) | 0.24 | 0.24 | 0.24 | ||||||
United Kingdom | 4.25 | 7.02 | 7.39 | ||||||
Benchmark | |||||||||
WTI crude oil (per bbl) | $ | 59.91 | $ | 54.90 | $ | 67.91 | |||
Brent (Europe) crude oil (per bbl) (e) | $ | 68.92 | $ | 63.17 | $ | 74.50 | |||
Henry Hub natural gas (per mmbtu) (f) | $ | 2.64 | $ | 3.15 | $ | 2.80 |
(a) | Excludes gains or losses on commodity derivative instruments. |
(b) | Inclusion of realized gains (losses) on crude oil derivative instruments would have affected average price realizations by $0.32, $1.10 and $(7.04) for second quarter 2019, first quarter 2019, and second quarter 2018. |
(c) | Includes sales volumes from the sale of certain non-core proved properties in our International and United States segments. |
(d) | Represents fixed prices under long-term contracts with Alba Plant LLC, Atlantic Methanol Production Company LLC and/or Equatorial Guinea LNG Holdings Limited, which are equity method investees. The Alba Plant LLC processes the NGLs and then sells secondary condensate, propane, and butane at market prices. Marathon Oil includes its share of income from each of these equity method investees in the International segment. |
(e) | Average of monthly prices obtained from Energy Information Administration website. |
(f) | Settlement date average per mmbtu. |
Q3 2019 Production Guidance | Oil Production (mbbld) | Equivalent Production (mboed) | |||||||||||||||
Q3 2019 | Q2 2019 | Q3 2018 | Q3 2019 | Q2 2019 | Q3 2018 | ||||||||||||
Low | High | Divestiture-Adjusted (a) | Divestiture-Adjusted (a) | Low | High | Divestiture-Adjusted (a) | Divestiture-Adjusted (a) | ||||||||||
Net production | |||||||||||||||||
United States | 190 | 200 | 192 | 172 | 330 | 340 | 331 | 302 | |||||||||
International | 12 | 16 | 16 | 17 | 80 | 90 | 91 | 99 | |||||||||
Total net production | 202 | 216 | 208 | 189 | 410 | 430 | 422 | 401 |
Full Year 2019 Production Guidance | Oil Production (mbbld) | Equivalent Production (mboed) | |||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||
Low (b) | High (b) | Divestiture-Adjusted (a) | Low (b) | High (b) | Divestiture-Adjusted (a) | ||||||||
Net production | |||||||||||||
United States | 185 | 195 | 169 | 320 | 330 | 294 | |||||||
International | 18 | 22 | 17 | 85 | 95 | 98 | |||||||
Total net production | 203 | 217 | 186 | 405 | 425 | 392 |
(a) | Divestiture-adjusted, and also removes volumes associated with the sale of our U.K. business which closed on July 1, 2019. |
(b) | Annual 2019 guidance includes 1H19 contributions from divested assets. |
The following table sets forth outstanding derivative contracts as of August 5, 2019, and the weighted average prices for those contracts:
2019 | 2020 | 2021 | ||||||||||||||||
Crude Oil | Third | Fourth Quarter | Full Year | Full Year | ||||||||||||||
NYMEX WTI Three-Way Collars (a) | ||||||||||||||||||
Volume (Bbls/day) | 80,000 | 80,000 | 19,945 | — | ||||||||||||||
Weighted average price per Bbl: | ||||||||||||||||||
Ceiling | $ | 74.19 | $ | 74.19 | $ | 67.55 | — | |||||||||||
Floor | $ | 56.75 | $ | 56.75 | $ | 55.00 | — | |||||||||||
Sold put | $ | 49.50 | $ | 49.50 | $ | 47.50 | — | |||||||||||
Basis Swaps - Argus WTI Midland (b) | ||||||||||||||||||
Volume (Bbls/day) | 15,000 | 15,000 | 15,000 | — | ||||||||||||||
Weighted average price per Bbl | $ | (1.40) | $ | (1.40) | $ | (0.94) | — | |||||||||||
Basis Swaps - Net Energy Clearbrook (c) | ||||||||||||||||||
Volume (Bbls/day) | 1,000 | 1,000 | — | — | ||||||||||||||
Weighted average price per Bbl | $ | (3.50) | $ | (3.50) | — | — | ||||||||||||
Basis Swaps - NYMEX WTI / ICE Brent (d) | ||||||||||||||||||
Volume (Bbls/day) | 5,000 | 5,000 | 5,000 | 808 | ||||||||||||||
Weighted average price per Bbl | $ | (7.24) | $ | (7.24) | $ | (7.24) | $ | (7.24) | ||||||||||
Basis Swaps - Argus WTI Houston (e) | ||||||||||||||||||
Volume (Bbls/day) | 10,000 | 10,000 | — | — | ||||||||||||||
Weighted average price per Bbl | $ | 5.51 | $ | 5.51 | $ | — | $ | — | ||||||||||
NYMEX Roll Basis Swaps | ||||||||||||||||||
Volume (Bbls/day) | 60,000 | 60,000 | — | — | ||||||||||||||
Weighted average price per Bbl | $ | 0.38 | $ | 0.38 | — | — |
(a) | Between July 1, 2019 and August 5, 2019, we entered into 10,000 Bbls/day of three-way collars for January - December 2020, with a ceiling of $65.12, a sold put of $48.00, and a floor of $55.00. |
(b) | The basis differential price is indexed against Argus WTI Midland. |
(c) | The basis differential price is indexed against Net Energy Canada Bakken SW at Clearbrook ("UHC"). |
(d) | The basis differential price is indexed against International Commodity Exchange ("ICE") Brent and NYMEX WTI. |
(e) | The basis differential price is indexed against Argus WTI Houston. |
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SOURCE Marathon Oil Corporation
HOUSTON, July 31, 2019 /PRNewswire/ -- Marathon Oil Corporation (NYSE: MRO) announced today that the Company's board of directors has declared a dividend of 5 cents per share on Marathon Oil Corporation common stock. The dividend is payable on Sept. 10, 2019, to stockholders of record on Aug. 21, 2019.
For more information on Marathon Oil Corporation, visit the Company's website at https://www.marathonoil.com.
Media Relations Contact:
Lee Warren: 713-296-4103
Investor Relations Contacts:
Guy Baber: 713-296-1892
John Reid: 713-296-4380
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SOURCE Marathon Oil Corporation
OKLAHOMA CITY, July 12, 2019 /PRNewswire/ -- Bison, Oklahoma's largest water infrastructure, logistics and solutions provider, today announced that it has entered into a 15-year Water Gathering and Disposal Agreement with Marathon Oil Company, a subsidiary of Marathon Oil Corporation (NYSE: MRO). Under the agreement, Bison will exclusively manage all of Marathon's produced water infrastructure, as well as any future acreage operated by Marathon within a 5.4 million acre dedicated area.
North Whipple, CEO of Bison, commented: "We are excited to expand our relationship with Marathon through this long-term water gathering and disposal agreement. This water infrastructure dedication is the first-of-its-kind in the SCOOP, STACK and Merge and is the direct result of Bison's proven ability to partner with customers and materially lower their operating expenses. We remain on track to meet or exceed our previously announced expansion plans and this agreement further underpins our development with a world-class upstream operator. Today marks another significant milestone in delivering on our promise to bring scalable and innovative cost-saving water solutions to the market."
For more information regarding the company, visit our website at www.BisonOK.com or email us at Media@BisonOK.com.
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SOURCE Bison
HOUSTON, July 8, 2019 /PRNewswire/ -- Marathon Oil Corporation (NYSE: MRO) announced today it plans to issue its second quarter 2019 earnings news release on Wednesday, Aug. 7, after the close of U.S. financial markets.
The Company will conduct a conference call, which will be webcast live, on Thursday, Aug. 8, at 9 a.m. ET. The call will include forward-looking information.
All of the above information, including earnings releases and other investor-related material, can be accessed by visiting Marathon Oil's website at https://www.MarathonOil.com.
Media Relations Contact:
Lee Warren: 713-296-4103
Investor Relations Contacts:
Guy Baber: 713-296-1892
John Reid: 713-296-4380
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SOURCE Marathon Oil Corporation
HOUSTON, July 1, 2019 /PRNewswire/ -- Marathon Oil Corporation (NYSE: MRO) announced today the company has closed on the sale of its U.K. business, which consists of the Brae area fields and Foinaven, to RockRose Energy PLC. The transaction represents a complete country exit for Marathon Oil.
Final terms of the transaction resulted in consideration payable to a subsidiary of Marathon Oil of approximately $95 million, which reflects the assumption by the buyer of the U.K. business' working capital and cash equivalent balances of approximately $345 million on Dec. 31, 2018. The transaction has an effective date of Jan. 1, 2019.
At year-end 2018, the Company carried 21.4 million oil equivalent barrels of proved reserves in the U.K., and 2018 production averaged approximately 13,000 barrels of oil equivalent per day.
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are also affected by the risk factors, forward-looking statements and challenges and uncertainties described in the Company's 2018 Annual Report on Form 10-K and other public filings and press releases, available at www.marathonoil.com.
Media Relations Contact:
Lee Warren: 713-296-4103
Investor Relations Contact:
Guy Baber: 713-296-1892
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SOURCE Marathon Oil Corporation
HOUSTON, May 31, 2019 /PRNewswire/ -- Marathon Oil Corporation (NYSE: MRO) announced today it has closed on the sale of its 15% participating interest in the Atrush Block in Kurdistan, where first quarter 2019 production averaged 2,400 net barrels of oil equivalent per day (100% oil). As previously disclosed, this divestiture represents a complete country exit for Marathon Oil.
Including this transaction and the recently announced agreement to divest of its U.K. business, Marathon Oil will have exited from 10 countries since 2013.
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, are forward-looking statements, including statements related to the sale of the Company's U.K. assets and the expected timing thereof. While the Company believes that its assumptions concerning future events are reasonable, a number of factors could cause results to differ materially including the failure to satisfy closing conditions as well as risk factors, forward-looking statements and challenges and uncertainties described in the Company's 2018 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other public filings and press releases, available at www.marathonoil.com. Except as required by law, the Company undertakes no obligation to revise or update any forward-looking statements as a result of new information, future events or otherwise.
Media Relations Contact
Lee Warren: 713-296-4103
Investor Relations Contacts
Guy Baber: 713-296-1892
John Reid: 713-296-4380
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SOURCE Marathon Oil Corporation
HOUSTON, May 1, 2019 /PRNewswire/ -- Marathon Oil Corporation (NYSE: MRO) today reported first quarter 2019 net income of $174 million, or $0.21 per diluted share, which includes the impact of certain items not typically represented in analysts' earnings estimates and that would otherwise affect comparability of results. Adjusted net income was $256 million, or $0.31 per diluted share. Net operating cash flow was $515 million, or $672 million before changes in working capital.
Highlights
"First quarter featured strong execution across our advantaged multi-basin portfolio and was highlighted by solid well productivity and improving well costs in each of our basins," said Chairman, President and CEO Lee Tillman. "We remain fully committed to our well-established framework for success: improving bottom-line corporate returns, generating sustainable free cash flow with an organic break-even of only $45/bbl WTI, prioritizing return of capital to shareholders, and enhancing our capital efficiency and underlying resource base through differentiated execution. We've returned over $90 million to shareholders year-to-date, more than fully funded by organic free cash flow. As we look forward to second quarter, strong April performance underpins our confidence in expected 5% sequential U.S. oil growth. With this significant operational momentum, we expect returns and free cash flow generation to inflect higher while our capital spending plans remain unchanged."
U.S.
U.S. production averaged 296,000 net barrels of oil equivalent per day (boed) for first quarter 2019, including 177,000 net barrels of oil per day (bopd). Oil production was up 11% from the year-ago quarter on a divestiture-adjusted basis, despite extreme weather conditions experienced during first quarter 2019. U.S. unit production costs were $5.21 per barrel of oil equivalent (boe), down 12% from the year-ago quarter due to ongoing cost reductions across the U.S. resource plays, particularly in the Northern Delaware.
EAGLE FORD: Marathon Oil's Eagle Ford production averaged 105,000 net boed in the first quarter. The Company brought 41 gross Company-operated wells to sales in the quarter with an average 30-day initial production (IP) rate of 1,515 boed (62% oil) at an average completed well cost of $4.4 million.
BAKKEN: Marathon Oil's Bakken production averaged 92,000 net boed in the first quarter. The Company brought 29 gross Company-operated wells to sales with an average 30-day IP rate of 2,500 boed (77% oil) at an average completed well cost of $5.1 million. First quarter 2019 activity was primarily concentrated in Myrmidon. The Company continues to enhance its Williston Basin footprint, recently executing a small bolt-on acquisition and additional leasing that has added more than 50 Company-operated locations to inventory.
OKLAHOMA: Marathon Oil's Oklahoma production averaged 63,000 net boed in the first quarter. The Company brought 18 gross Company-operated wells to sales, with 16 of these wells brought to sales during March. In the STACK, the Company again realized strong over-pressured Meramec infill drilling results through optimized development at the drill spacing unit level. Three infill pads developed at three, six, and eight wells per section equivalent spacing delivered an average 30-day IP rate of 1,870 boed (53% oil), with completed well cost per lateral foot down more than 30% relative to parent wells.
NORTHERN DELAWARE: Marathon Oil's Northern Delaware production averaged 26,000 net boed in the first quarter. The Company brought 15 gross Company-operated wells to sales with an average 30-day IP rate of 1,815 boed (65% oil), or 360 boed per 1,000 foot lateral. First quarter 2019 wells to sales featured a mix of early development and delineation drilling across both the Malaga and Red Hills areas. In Malaga, a four-well pad targeting the Bone Spring, Upper Wolfcamp and Lower Wolfcamp horizons achieved a 30-day IP rate of 2,830 boed (62% oil), or 400 boed per 1,000 foot lateral.
International
International production averaged 92,000 net boed for first quarter 2019. During the quarter, the Company successfully completed its planned triennial turnaround in E.G., with a return to full production levels achieved on schedule in early April. First quarter 2019 International unit production costs averaged $6.22 per boe.
The Company recently signed a definitive agreement to process third-party Alen Unit gas through existing infrastructure located in Punta Europa, E.G., a significant step toward solidifying Punta Europa as a cornerstone component of the E.G. Gas Mega Hub for the potential development of local and regional natural gas. First gas sales from the Alen Unit is expected in 2021, and will utilize available processing capacity not required by the Alba Field. Marathon Oil is the operator and majority shareholder of the integrated gas business at Punta Europa and will maintain market exposure through a combination of both profit sharing and tolling.
The Company signed an agreement for the divestiture of its U.K. business, with an expected close during the second half of 2019, a transaction which will mark a complete country exit. Marathon Oil's U.K. properties include approximately $950 million of asset retirement obligations and are classified as held for sale in the consolidated balance sheet as of March 31. U.K. held for sale assets of $947 million, including $323 million of cash and cash equivalents, will be partially offset at close by sales proceeds of approximately $140 million.
Cash Flow, Development Capital and Resource Capture
Net cash provided by operations was $515 million during first quarter 2019, or $672 million before changes in working capital. First quarter development capital expenditures were $569 million. The Company's 2019 development capital budget remains unchanged at $2.4 billion. Outside of the development capital budget, first quarter resource play leasing and exploration (REx) capital expenditures were $37 million. The Company's 2019 REx capital budget also remains unchanged at $200 million.
Production Guidance
For second quarter 2019, the Company forecasts total oil production of 200,000 to 220,000 net bopd, with U.S. oil production of 180,000 to 190,000 net bopd. Second quarter U.S. oil production is expected to increase 5% sequentially at the midpoint of guidance, reflecting strong operational momentum already achieved early in the quarter. Second quarter 2019 international oil production guidance of 20,000 to 30,000 net bopd reflects continued unscheduled downtime at the non-operated Foinaven complex. Previously provided full-year 2019 production guidance, calling for total Company oil production growth of 10%, with U.S. oil growth of 12%, remains unchanged.
Corporate
The Company has executed $50 million of year-to-date share repurchases, returning additional capital to shareholders beyond the $41 million first quarter dividend payment. Share repurchases have been more than fully funded by post-dividend organic free cash flow, and $750 million remains on current authorization.
Total liquidity as of March 31 was approximately $4.4 billion, which consisted of $1.0 billion in cash and cash equivalents and an undrawn revolving credit facility of $3.4 billion. End of quarter cash and cash equivalents reflect cash balances classified as held for sale associated with U.K. properties, but do not include expected sales proceeds to be received at close. The company is rated investment grade at all three major credit ratings agencies following a recent upgrade by Moody's Investor Services, Inc.
The adjustments to net income for first quarter 2019 totaled $89 million before tax, primarily due to the income impact associated with unrealized losses on derivative instruments, partially offset by a gain on sale related to working interest in the Gulf of Mexico Droshky field. In addition, first quarter adjusted net income of $256 million included a tax benefit and indemnification income totaling $168 million.
As of April 30, the Company's open crude hedge positions for 2019 include an average of 76,691 bopd at a weighted average floor price of $56.48 and a weighted average ceiling price of $73.29, hedged through three-way collars.
A slide deck and Quarterly Investor Packet will be posted to the Company's website following this release today, May 1. On Thursday, May 2, at 9:00 a.m. ET, the Company will conduct a question and answer webcast/call, which will include forward-looking information. The live webcast, replay and all related materials will be available at https://www.marathonoil.com/Investors.
Definitions
Organic free cash flow - Operating cash flow before working capital (excluding exploration costs other than well costs), less development capital expenditures, less dividends, plus other.
Non-GAAP Measures
In analyzing and planning for its business, Marathon Oil supplements its use of GAAP financial measures with non-GAAP financial measures, including adjusted net income, adjusted net income per share, net cash provided by operations before changes in working capital, and organic free cash flow because the Company believes this information is useful to investors to help evaluate the Company's financial performance between periods and to compare the Company's performance to certain competitors. Management also uses net cash provided by operations before changes in working capital to demonstrate the Company's ability to internally fund capital expenditures, pay dividends and service debt. The Company considers adjusted net income, adjusted income from operations, adjusted net income per share and adjusted income from operations per share as another way to meaningfully represent the Company's operational performance for the period presented; consequently, it excludes the impact of mark-to-market accounting, impairment charges, dispositions, pension settlements, and other items that could be considered "non-operating" or "non-core" in nature. These non-GAAP financial measures reflect an additional way of viewing aspects of the business that, when viewed with GAAP results may provide a more complete understanding of factors and trends affecting the business and are a useful tool to help management and investors make informed decisions about Marathon Oil's financial and operating performance. These measures should not be considered substitutes for their most directly comparable GAAP financial measures. A reconciliation to their most directly comparable GAAP financial measures can be found in our investor package on our website at www.marathonoil.com and in the tables below. Marathon Oil strongly encourages investors to review the Company's consolidated financial statements and publicly filed reports in their entirety and not rely on any single financial measure.
Forward-looking Statements
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, including without limitation statements regarding the Company's 2019 capital budget and allocations (including development capital budget and resource play leasing and exploration spend), future performance, organic free cash flow, free cash flow, corporate-level cash returns on invested capital, business strategy, asset quality, drilling plans, production guidance, cash margins, asset sales and acquisitions, leasing and exploration activities, production, oil growth and other plans and objectives for future operations, are forward-looking statements. Words such as "anticipate," "believe," "could," "estimate," "expect," "forecast," "guidance," "intend," "may," "plan," "project," "seek," "should," "target," "will," "would," or similar words may be used to identify forward-looking statements; however, the absence of these words does not mean that the statements are not forward-looking. While the Company believes its assumptions concerning future events are reasonable, a number of factors could cause actual results to differ materially from those projected, including, but not limited to: conditions in the oil and gas industry, including supply/demand levels and the resulting impact on price; changes in expected reserve or production levels; changes in political or economic conditions in the jurisdictions in which the Company operates; risks related to the Company's hedging activities; capital available for exploration and development; drilling and operating risks; well production timing; availability of drilling rigs, materials and labor, including associated costs; difficulty in obtaining necessary approvals and permits; non-performance by third parties of contractual obligations; unforeseen hazards such as weather conditions, acts of war or terrorist acts and the government or military response thereto; cyber-attacks; changes in safety, health, environmental, tax and other regulations; other geological, operating and economic considerations; and the risk factors, forward-looking statements and challenges and uncertainties described in the Company's 2018 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other public filings and press releases, available at www.marathonoil.com. Except as required by law, the Company undertakes no obligation to revise or update any forward-looking statements as a result of new information, future events or otherwise.
Media Relations Contact:
Lee Warren: 713-296-4103
Investor Relations Contacts:
Guy Baber: 713-296-1892
John Reid: 713-296-4380
Consolidated Statements of Income (Unaudited) | Three Months Ended | ||||||||
Mar. 31 | Dec. 31 | Mar. 31 | |||||||
(In millions, except per share data) | 2019 | 2018 | 2018 | ||||||
Revenues and other income: | |||||||||
Revenues from contracts with customers | $ | 1,200 | $ | 1,380< |