HOUSTON, Nov. 3, 2021 /PRNewswire/ -- Marathon Oil
Corporation (NYSE:MRO) reported third quarter 2021 net income of
$184 million, or $0.23 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 income was $310
million, or $0.39 per diluted
share. Net operating cash flow was $816
million, or $775 million
before changes in working capital.
Highlights
- Strong financial performance highlighted by third quarter free
cash flow generation of $478 million;
over $1.3 billion of free cash flow
generation through third quarter
- Committed to capital discipline with no change to $1 billion 2021 capital expenditure budget; third
quarter capital expenditures of $308
million and $781 million of
capital expenditures through third quarter
- Third quarter oil-equivalent production of 345,000 net boed,
including oil production of 168,000 net bopd; no change to midpoint
of 2021 total Company oil or oil-equivalent production
guidance
- Total 2021 gross debt reduction of $1.4
billion, including full redemption of $900 million 2025 maturity during third quarter,
contributing to $50 million of
annualized cash interest expense savings; going forward, expect to
retire future debt at maturity
- Raised quarterly base dividend for third consecutive quarter to
$0.06 per share representing
cumulative 100% increase since year-end 2020
- Executed $200 million of share
repurchases since October
1st and targeting approximately $500 million of total share repurchases during
fourth quarter
- Fourth quarter return of capital to equity holders, inclusive
of base dividend and share repurchases, expected to exceed minimum
target of 40% of cash flow from operations
- Board of Directors approved share repurchase authorization
increase to $2.5 billion
"Third quarter was once again characterized by both strong
safety performance and an improving GHG emissions trend," said
Chairman, President, and CEO Lee
Tillman. "Additionally, through our commitment to capital
discipline and our differentiated execution, we are delivering
outsized financial outcomes, highlighted by over $1.3 billion of year-to-date free cash flow
generation. This strong financial performance in combination with
the substantial improvement to our balance sheet has enabled us to
dramatically accelerate the return of capital to equity holders.
Consistent with our framework, the shareholder will get the first
call on cash flow. We've raised our base dividend for the third
consecutive quarter, we've repurchased $200
million of stock since October
1st, and we are targeting approximately
$300 million of additional
repurchases before year-end. Through our increased base dividend
and share repurchases, we expect to return around 50% of our fourth
quarter cash flow from operations to our equity holders. Looking
ahead to 2022, with our commitment to capital discipline firmly in
place, no material debt maturities, and our upsized share
repurchase authorization, we are well positioned to continue
delivering outsized free cash flow generation and return of capital
to our shareholders."
United States
(U.S.)
U.S. production averaged 284,000 net barrels of oil
equivalent per day (boed) for third quarter 2021 with sales of
281,000 net barrels of oil equivalent per day. Oil production
averaged 157,000 net barrels of oil per day (bopd) with sales of
154,000 net barrels of oil per day. The difference between
production and sales, as previously disclosed, was due to pipeline
linefill in the Bakken related to the DAPL expansion, which was
largely completed during third quarter. The Company brought a total
of 63 gross Company-operated wells to sales during third quarter.
U.S. unit production costs were $4.59 per boe for third quarter.
Marathon Oil's third quarter production in the Eagle Ford
averaged 95,000 net boed, including 60,000 net bopd of oil, with 29
gross Company-operated wells to sales. In the Bakken, production
averaged 107,000 net boed, including 71,000 net bopd of oil, with
27 gross Company-operated wells to sales. This compares to Bakken
sales volumes of 103,000 net boed, including 68,000 net bopd of
oil, with the difference between production and sales due to
pipeline linefill related to the DAPL expansion. In Oklahoma, production averaged 55,000 net boed,
including 12,000 net bopd of oil, with 4 gross Company-operated
wells to sales. Northern Delaware
production averaged 21,000 net boed, including 11,000 net bopd of
oil, with 3 gross Company-operated wells to sales.
Marathon Oil has completed its 2021 Resource Play Exploration
(REx) drilling program, which was focused on the continued
delineation of its contiguous 50,000 net acreage position in the
Texas Delaware Oil Play. The Company recently brought online its
first multi-well pad in the play, with initial production rates in
both the Woodford and Meramec
exceeding pre-drill expectations. Marathon Oil has now brought
online a total of 9 successful wells (6 Woodford, 3 Meramec) in this new play.
International
Equatorial
Guinea production averaged 61,000 net boed for third quarter
2021, including 11,000 net bopd of oil. Unit production costs
averaged $2.17 per boe. Net income
from equity method investees totaled $86
million during third quarter, with cash dividends received
during third quarter of $47
million.
Guidance
Marathon Oil's 2021 capital expenditure
guidance of $1 billion remains
unchanged, as do the midpoints of full year 2021 total Company oil
and oil-equivalent production guidance.
Marathon Oil is raising its full year 2021 Equatorial Guinea
equity method income guidance for the second consecutive quarter to
a new range of $235 million to
$255 million.
The Company's full year 2021 production and Equatorial Guinea equity method income
guidance fully contemplate an unplanned outage experienced in
Equatorial Guinea late in the
third quarter. Normal operations resumed this week.
During fourth quarter, Marathon Oil expects total oil production
to increase to between 176,000 and 180,000 net bopd in comparison
to third quarter production of 168,000 net bopd. The Company
expects fourth quarter total oil-equivalent production to be
similar to third quarter production of 345,000 net boed.
Corporate
CASH FLOW AND CAPEX: Net cash provided by
operations was $816 million during
third quarter 2021, or $775 million
before changes in working capital. Third quarter capital
expenditures totaled $308 million,
representing the peak capital expenditure quarter for the year.
FREE CASH FLOW: Marathon Oil generated $478 million of free cash flow during third
quarter and over $1.3 billion of free
cash flow year-to-date through third quarter 2021.
ADJUSTMENTS TO NET INCOME: The adjustments to net income for
third quarter 2021 totaled $126
million, primarily due to make-whole premium associated with
early debt retirement, miscellaneous asset impairments, and the
income impact associated with unrealized gains on derivative
instruments.
Balance Sheet Improvement
During third quarter, the
Company fully redeemed the $900
million 3.85% Senior Notes Due 2025. This transaction
accelerated the realization of Marathon Oil's previously disclosed
absolute gross debt objective of approximately $4.0 billion. Total gross debt reduction in 2021
has amounted to $1.4 billion and is
expected to contribute to approximately $50
million of annualized cash interest expense savings. Going
forward, the Company expects to retire future debt at maturity.
Marathon Oil has no material maturities due in 2022.
Marathon Oil ended third quarter with total liquidity of
$3.6 billion, which consisted of an
undrawn revolving credit facility of $3.1
billion and $0.5 billion
in cash and cash equivalents. The Company continues to maintain an
investment grade credit rating at all three primary rating
agencies.
Base Dividend Increase and Return of Capital
Update
Subsequent to the end of third quarter, the Company
raised its quarterly base dividend by 20% from 5 cents per share to 6
cents per share. This is the third consecutive quarterly
increase to the base dividend, representing a cumulative increase
of 100% since the end of 2020.
Since October 1st, Marathon Oil
has executed $200 million of share
repurchases and is targeting approximately $300 million of additional share repurchases
before year-end for total fourth quarter share repurchases of
approximately $500 million. Marathon
Oil expects its total fourth quarter return of capital to equity
holders, inclusive of the base dividend and share repurchases, to
equate to approximately 50% of cash flow from operations.
The Company's Board of Directors approved an increase in total
share repurchase authorization to $2.5
billion.
A slide deck and Quarterly Investor Packet will be posted to the
Company's website following this release today, November 3. On Thursday,
November 4, 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 total capital expenditures.
Our presentation of adjusted net income (loss) and adjusted
net income (loss) per share is a non-GAAP measure. Adjusted net
income (loss) is defined as net income (loss) adjusted for
gains/losses on dispositions, impairments of proved and certain
unproved properties, goodwill and equity method investments,
certain exploration expenses relating to a strategic decision to
exit conventional exploration, unrealized derivative gain/loss on
commodity and interest rate derivative instruments, effects of
pension settlements and curtailments and other items that could be
considered "non-operating" or "non-core" in nature. Management
believes this is useful to investors as another tool to
meaningfully represent our operating performance and to compare
Marathon to certain competitors. Adjusted net income (loss) and
adjusted net income (loss) per share should not be considered in
isolation or as an alternative to, or more meaningful than, net
income (loss) or net income (loss) per share as determined in
accordance with U.S. GAAP.
Our presentation of free cash flow is a non-GAAP measure.
Free cash flow before dividend ("free cash flow") is defined as net
cash provided by operating activities adjusted for working capital,
capital expenditures, and EG return of capital and other.
Management believes this is useful to investors as a measure of
Marathon's ability to fund its capital expenditure programs,
service debt, and fund other distributions to stockholders. Free
cash flow should not be considered in isolation or as an
alternative to, or more meaningful than, net cash provided by
operating activities as determined in accordance with U.S.
GAAP.
Our presentation of net cash provided by operations before
changes in operating working capital is defined as net cash
provided by operating activities adjusted for operating working
capital and is a non-GAAP measure. Management believes this is
useful to investors as an indicator of Marathon's ability to
generate cash quarterly or year-to-date by eliminating differences
caused by the timing of certain working capital items. Net cash
provided by operations before changes in working capital should not
be considered in isolation or as an alternative to, or more
meaningful than, net cash provided by operating activities as
determined in accordance with U.S. GAAP.
Our presentation of total capital expenditures is a non-GAAP
measure. Total capital expenditures is defined as cash additions to
property, plant and equipment adjusted for the change in working
capital associated with property, plant and equipment and additions
to other assets. Management believes this is useful to investors as
an indicator of Marathon's commitment to capital expenditure
discipline by eliminating differences caused by the timing of
certain working capital and other items. Total capital expenditures
should not be considered in isolation or as an alternative to, or
more meaningful than, cash additions to property, plant and
equipment as determined in accordance with U.S. GAAP.
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, future
performance, expected free cash flow, future debt retirement and
the timing thereof, annualized cash interest expense savings,
returns to investors (including dividends and share repurchases,
and the timing thereof), business strategy, capital expenditure
guidance, production guidance, E.G. equity method income guidance
and other plans and objectives for future operations, are
forward-looking statements. Words such as "anticipate," "believe,"
"continue," "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 or
corrective actions resulting from litigation or other proceedings
and investigations; 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 or legal obligations, including due to
bankruptcy; changes in our credit ratings; hazards such as weather
conditions, a health pandemic (including COVID-19), acts of war or
terrorist acts and the government or military response thereto;
security threats, including cybersecurity threats and disruptions
to our business and operations from breaches of our information
technology systems, or breaches of the information technology
systems, facilities and infrastructure of third parties with which
we transact business; 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 2020 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: 826-206-3746
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)
|
2021
|
2021
|
2020
|
Revenues and other
income:
|
|
|
|
Revenues from
contracts with customers
|
$
|
1,438
|
|
$
|
1,254
|
|
$
|
761
|
|
Net gain (loss) on
commodity derivatives
|
(79)
|
|
(166)
|
|
(1)
|
|
Income (loss) from
equity method investments
|
86
|
|
49
|
|
(10)
|
|
Net gain (loss) on
disposal of assets
|
7
|
|
1
|
|
1
|
|
Other
income
|
1
|
|
5
|
|
3
|
|
Total revenues and
other income
|
1,453
|
|
1,143
|
|
754
|
|
Costs and
expenses:
|
|
|
|
Production
|
131
|
|
126
|
|
129
|
|
Shipping, handling and
other operating
|
219
|
|
167
|
|
183
|
|
Exploration
|
63
|
|
25
|
|
27
|
|
Depreciation,
depletion and amortization
|
522
|
|
532
|
|
554
|
|
Impairments
|
13
|
|
46
|
|
1
|
|
Taxes other than
income
|
88
|
|
74
|
|
49
|
|
General and
administrative
|
70
|
|
68
|
|
53
|
|
Total costs and
expenses
|
1,106
|
|
1,038
|
|
996
|
|
Income (loss) from
operations
|
347
|
|
105
|
|
(242)
|
|
Net interest and
other
|
(57)
|
|
(59)
|
|
(62)
|
|
Other net periodic
benefit (costs) credits
|
—
|
|
(1)
|
|
(6)
|
|
Loss on early
extinguishment of debt
|
(102)
|
|
(19)
|
|
—
|
|
Income (loss)
before income taxes
|
188
|
|
26
|
|
(310)
|
|
Provision (benefit)
for income taxes
|
4
|
|
10
|
|
7
|
|
Net income
(loss)
|
$
|
184
|
|
$
|
16
|
|
$
|
(317)
|
|
|
|
|
|
Adjusted Net
Income (Loss)
|
|
|
|
Net income
(loss)
|
$
|
184
|
|
$
|
16
|
|
$
|
(317)
|
|
Adjustments for
special items (pre-tax):
|
|
|
|
Net (gain) loss on
disposal of assets
|
(7)
|
|
(1)
|
|
(1)
|
|
Proved property
impairments
|
13
|
|
46
|
|
1
|
|
Exploratory dry well
costs, unproved property impairments and other
|
48
|
|
7
|
|
6
|
|
Pension
settlement
|
3
|
|
5
|
|
9
|
|
Pension
curtailment
|
—
|
|
—
|
|
—
|
|
Unrealized (gain) loss
on derivative instruments
|
(27)
|
|
75
|
|
36
|
|
Unrealized (gain) on
interest rate swaps
|
(8)
|
|
(8)
|
|
—
|
|
Reduction in
workforce
|
—
|
|
1
|
|
2
|
|
Impairment of equity
method investment
|
—
|
|
—
|
|
18
|
|
Loss on early
extinguishment of debt
|
102
|
|
19
|
|
—
|
|
Other
|
2
|
|
13
|
|
28
|
|
Benefit for income
taxes related to special items
|
—
|
|
—
|
|
(1)
|
|
Adjustments for
special items
|
126
|
|
157
|
|
98
|
|
Adjusted net
income (loss) (a)
|
$
|
310
|
|
$
|
173
|
|
$
|
(219)
|
|
Per diluted
share:
|
|
|
|
Net income
(loss)
|
$
|
0.23
|
|
$
|
0.02
|
|
$
|
(0.40)
|
|
Adjusted net income
(loss) (a)
|
$
|
0.39
|
|
$
|
0.22
|
|
$
|
(0.28)
|
|
Weighted average
diluted shares
|
789
|
|
789
|
|
790
|
|
(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)
|
2021
|
2021
|
2020
|
Segment income
(loss)
|
|
|
|
United
States
|
$
|
305
|
|
$
|
207
|
|
$
|
(135)
|
|
International
|
93
|
|
68
|
|
8
|
|
Not allocated to
segments
|
(214)
|
|
(259)
|
|
(190)
|
|
Net income
(loss)
|
$
|
184
|
|
$
|
16
|
|
$
|
(317)
|
|
Cash
flows
|
|
|
|
Net cash provided by
operating activities
|
$
|
816
|
|
$
|
655
|
|
$
|
345
|
|
Changes in working
capital
|
(41)
|
|
46
|
|
7
|
|
Net cash provided
by operating activities before changes in working capital
(a)
|
$
|
775
|
|
$
|
701
|
|
$
|
352
|
|
|
|
|
|
Free Cash
Flow
|
|
|
|
Net cash provided by
operating activities before changes in working capital
(a)
|
$
|
775
|
|
$
|
701
|
|
$
|
352
|
|
Adjustments for free
cash flow:
|
|
|
|
Capital
expenditures
|
(308)
|
|
(289)
|
|
(174)
|
|
EG return of capital
and other
|
11
|
|
8
|
|
—
|
|
Free cash flow
(a)
|
$
|
478
|
|
$
|
420
|
|
$
|
178
|
|
Capital
Expenditures
|
|
|
|
Cash additions to
property, plant and equipment
|
$
|
(289)
|
|
$
|
(274)
|
|
$
|
(144)
|
|
Change in working
capital associated with PP&E
|
(19)
|
|
(15)
|
|
(33)
|
|
Additions to other
assets
|
—
|
|
—
|
|
3
|
|
Total capital
expenditures (a)
|
$
|
(308)
|
|
$
|
(289)
|
|
$
|
(174)
|
|
(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
|
Net
Production
|
2021
|
2021
|
2020
|
Equivalent
Production (mboed)
|
|
|
|
United
States
|
284
|
|
283
|
|
297
|
|
International
|
61
|
|
65
|
|
73
|
|
Total net
production
|
345
|
|
348
|
|
370
|
|
Oil Production
(mbbld)
|
|
|
|
United
States
|
157
|
|
159
|
|
159
|
|
International
|
11
|
|
11
|
|
13
|
|
Total net
production
|
168
|
|
170
|
|
172
|
|
Supplemental
Statistics (Unaudited)
|
Three Months
Ended
|
|
Sept.
30
|
June
30
|
Sept.
30
|
|
2021
|
2021
|
2020
|
United States -
net sales volumes
|
|
|
|
Crude oil and
condensate (mbbld)
|
154
|
|
159
|
|
159
|
|
Eagle Ford
|
60
|
|
60
|
|
53
|
|
Bakken
|
67
|
|
70
|
|
69
|
|
Oklahoma
|
12
|
|
12
|
|
18
|
|
Northern
Delaware
|
12
|
|
13
|
|
15
|
|
Other United States
(a)
|
3
|
|
4
|
|
4
|
|
Natural gas liquids
(mbbld)
|
65
|
|
60
|
|
68
|
|
Eagle Ford
|
18
|
|
14
|
|
20
|
|
Bakken
|
22
|
|
22
|
|
16
|
|
Oklahoma
|
19
|
|
17
|
|
25
|
|
Northern
Delaware
|
4
|
|
6
|
|
5
|
|
Other United States
(a)
|
2
|
|
1
|
|
2
|
|
Natural gas
(mmcfd)
|
371
|
|
386
|
|
421
|
|
Eagle Ford
|
99
|
|
103
|
|
111
|
|
Bakken
|
84
|
|
90
|
|
76
|
|
Oklahoma
|
146
|
|
150
|
|
179
|
|
Northern
Delaware
|
30
|
|
32
|
|
40
|
|
Other United States
(a)
|
12
|
|
11
|
|
15
|
|
Total United States
(mboed)
|
281
|
|
283
|
|
297
|
|
International -
net sales volumes
|
|
|
|
Crude oil and
condensate (mbbld)
|
11
|
|
12
|
|
11
|
|
Equatorial
Guinea
|
11
|
|
12
|
|
11
|
|
Natural gas liquids
(mbbld)
|
7
|
|
7
|
|
8
|
|
Equatorial
Guinea
|
7
|
|
7
|
|
8
|
|
Natural gas
(mmcfd)
|
258
|
|
276
|
|
310
|
|
Equatorial
Guinea
|
258
|
|
276
|
|
310
|
|
Total International
(mboed)
|
61
|
|
65
|
|
71
|
|
Total Company -
net sales volumes (mboed)
|
342
|
|
348
|
|
368
|
|
Net sales volumes
of equity method investees
|
|
|
|
LNG (mtd)
|
3,119
|
|
3,094
|
|
3,960
|
|
Methanol
(mtd)
|
1,218
|
|
744
|
|
1,065
|
|
Condensate and LPG
(boed)
|
9,537
|
|
7,892
|
|
9,340
|
|
(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
|
|
2021
|
2021
|
2020
|
United States -
average price realizations (a)
|
|
|
|
Crude oil and
condensate ($ per bbl) (b)
|
$
|
69.40
|
|
$
|
64.73
|
|
$
|
37.78
|
|
Eagle Ford
|
70.22
|
|
65.51
|
|
38.79
|
|
Bakken
|
68.54
|
|
64.15
|
|
36.28
|
|
Oklahoma
|
69.62
|
|
63.77
|
|
38.49
|
|
Northern
Delaware
|
70.20
|
|
65.53
|
|
40.18
|
|
Other United States
(c)
|
68.36
|
|
63.80
|
|
38.51
|
|
Natural gas liquids
($ per bbl)
|
$
|
30.68
|
|
$
|
24.17
|
|
$
|
11.80
|
|
Eagle Ford
|
30.69
|
|
25.80
|
|
12.07
|
|
Bakken
|
31.12
|
|
24.37
|
|
10.26
|
|
Oklahoma
|
31.36
|
|
23.28
|
|
12.15
|
|
Northern
Delaware
|
25.98
|
|
22.63
|
|
13.65
|
|
Other United States
(c)
|
30.51
|
|
21.19
|
|
12.17
|
|
Natural gas ($ per
mcf)
|
$
|
4.17
|
|
$
|
2.61
|
|
$
|
1.78
|
|
Eagle Ford
|
4.11
|
|
3.09
|
|
1.79
|
|
Bakken
|
3.73
|
|
2.13
|
|
1.26
|
|
Oklahoma
|
4.57
|
|
3.01
|
|
2.03
|
|
Northern
Delaware
|
4.15
|
|
1.86
|
|
1.53
|
|
Other United States
(c)
|
3.03
|
|
(1.19)
|
|
1.90
|
|
International -
average price realizations
|
|
|
|
Crude oil and
condensate ($ per bbl)
|
$
|
56.36
|
|
$
|
52.78
|
|
$
|
30.28
|
|
Equatorial
Guinea
|
56.36
|
|
52.78
|
|
30.28
|
|
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)
|
$
|
70.52
|
|
$
|
66.17
|
|
$
|
40.92
|
|
Brent (Europe) crude
oil (per bbl) (e)
|
$
|
73.47
|
|
$
|
68.83
|
|
$
|
42.96
|
|
Mont Belvieu NGLs (per
bbl) (f)
|
$
|
32.27
|
|
$
|
24.81
|
|
$
|
15.87
|
|
Henry Hub natural gas
(per mmbtu) (g)
|
$
|
4.01
|
|
$
|
2.83
|
|
$
|
1.98
|
|
(a)
|
Excludes gains or
losses on commodity derivative instruments.
|
(b)
|
Inclusion of realized
gains (losses) on crude oil derivative instruments would have
decreased average price realizations by $4.00 for the third
quarter 2021 and by $5.54 for the second quarter 2021 and increased
average price realizations by $2.24 for the third quarter
2020.
|
(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
2021
Production
Guidance
|
Oil Production
(mbpod)
|
|
Equivalent
Production (mboed)
|
2021
Guidance
|
3Q21
|
2Q21
|
1Q21
|
|
2021
Guidance
|
3Q21
|
2Q21
|
1Q21
|
Net
production
|
|
|
|
|
|
|
|
|
|
United
States
|
158 - 162
|
157
|
159
|
160
|
|
282 - 288
|
284
|
283
|
276
|
International
|
11 - 13
|
11
|
11
|
12
|
|
58 - 62
|
61
|
65
|
69
|
Total net
production
|
169 - 175
|
168
|
170
|
172
|
|
340 - 350
|
345
|
348
|
345
|
The following table sets forth outstanding derivative contracts
as of November 1, 2021, and the
weighted average prices for those contracts:
|
|
2021
|
2022
|
|
|
Fourth
Quarter
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
Crude
Oil
|
|
|
|
|
|
|
|
|
|
NYMEX WTI
Three-Way Collars
|
|
|
|
|
|
|
|
|
|
Volume
(Bbls/day)
|
|
40,000
|
|
40,000
|
|
|
40,000
|
|
|
20,000
|
|
|
20,000
|
|
Weighted average price
per Bbl:
|
|
|
|
|
|
|
|
|
|
Ceiling
|
|
$
|
78.05
|
|
$
|
91.13
|
|
|
$
|
91.13
|
|
|
$
|
92.80
|
|
|
$
|
92.80
|
|
Floor
|
|
$
|
50.00
|
|
$
|
50.00
|
|
|
$
|
50.00
|
|
|
$
|
50.00
|
|
|
$
|
50.00
|
|
Sold put
|
|
$
|
40.00
|
|
$
|
40.00
|
|
|
$
|
40.00
|
|
|
$
|
40.00
|
|
|
$
|
40.00
|
|
NYMEX WTI
Two-Way Collars
|
|
|
|
|
|
|
|
|
|
Volume
(Bbls/day)
|
|
40,000
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Weighted average price
per Bbl:
|
|
|
|
|
|
|
|
|
|
Ceiling
|
|
$
|
58.92
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Floor
|
|
$
|
39.25
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
NYMEX Roll
Basis Swaps
|
|
|
|
|
|
|
|
|
|
Volume
(Bbls/day)
|
|
40,000
|
|
45,000
|
|
|
45,000
|
|
|
45,000
|
|
|
45,000
|
|
Weighted average price
per Bbl
|
|
$
|
1.15
|
|
$
|
0.56
|
|
|
$
|
0.56
|
|
|
$
|
0.56
|
|
|
$
|
0.56
|
|
Natural
Gas
|
|
|
|
|
|
|
|
|
|
Henry Hub
("HH") Two-Way Collars
|
|
|
|
|
|
|
|
|
|
Volume
(MMBtu/day)
|
|
200,000
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Weighted average price
per MMBtu:
|
|
|
|
|
|
|
|
|
|
Ceiling
|
|
$
|
3.05
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Floor
|
|
$
|
2.50
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
HH Three-Way
Collars
|
|
|
|
|
|
|
|
|
|
Volume
(MMBtu/day)
|
|
—
|
|
50,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Weighted average price
per MMBtu
|
|
|
|
|
|
|
|
|
|
Ceiling
|
|
$
|
—
|
|
$
|
5.14
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Floor
|
|
$
|
—
|
|
$
|
3.60
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Sold Put
|
|
$
|
—
|
|
$
|
2.60
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
HH Fixed Price
Swaps
|
|
|
|
|
|
|
|
|
|
Volume
(MMBtu/day)
|
|
50,000
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Weighted average price
per MMBtu:
|
|
$
|
2.88
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
NGL
|
|
|
|
|
|
|
|
|
|
Fixed Price
Ethane Swaps (a)
|
|
|
|
|
|
|
|
|
|
Volume
(Bbls/day)
|
|
5,000
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Weighted average price
per Bbl
|
|
$
|
10.92
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Fixed Price
Propane Swaps (b)
|
|
|
|
|
|
|
|
|
|
Volume
(Bbls/day)
|
|
5,000
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Weighted average price
per Bbl
|
|
$
|
23.19
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(a)
The fixed price ethane swap is priced at OPIS Mont Belvieu Purity
Ethane.
|
(b)
The fixed price propane swap is priced at OPIS Mont Belvieu Non-TET
Propane.
|
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SOURCE Marathon Oil Corporation