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
- Second quarter capital expenditures of $137 million on successful and efficient pause in
drilling and completion activity; reducing full year capital
expenditure guidance to $1.2 billion
on strong execution and capital efficiency
- Second quarter total Company oil production of 197,000 net
bopd, inclusive of approximately 11,000 net bopd of
curtailments
- Raising full year 2020 total Company oil production outlook to
190,000 net bopd at the midpoint of guidance, inclusive of
year-to-date curtailments; prior guidance excluded production
curtailments
- Second quarter U.S. unit production cost of $4.09 per boe; lowest level since becoming an
independent exploration and production company
- $3.0 billion undrawn revolving
credit facility and $522 million of
cash and cash equivalents at end of second quarter; July 3rd pro-forma cash balance of
$611 million with receipt of
Alternative Minimum Tax refund
- Positioned for free cash flow generation at commodity prices
well below current forward curve with second half 2020 free cash
flow breakeven in low $30/bbl WTI
range
"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
Production
Guidance
|
Oil Production
(mbbld)
|
|
Equivalent
Production (mboed)
|
Full Year
2020
|
Q2
2020
|
Q1
2020
|
Full
Year
2019
|
|
Full Year
2020
|
Q2
2020
|
Q1
2020
|
Full
Year
2019
|
|
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.
|
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SOURCE Marathon Oil Corporation