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
- Generated $80 million of organic
free cash flow post-dividend, and remains on track to achieve
two-year organic free cash flow objectives
- Executed $50 million of
year-to-date share repurchases in addition to $41 million of dividend payments; $750 million of share repurchase authorization
remaining
- Development capital spend of $569
million, down 8% from year-ago quarter; annual $2.4 billion development capital budget remains
unchanged
- Total Company oil production averaged 203,000 net bopd, up 6%
from year-ago quarter, divestiture-adjusted; U.S. oil production
averaged 177,000 net bopd, up 11% from year-ago quarter,
divestiture-adjusted
- Eagle Ford production averaged 105,000 net boed; 41 wells
achieved an average 30-day IP rate of 1,515 boed (62% oil) at an
average completed well cost of approx. $4.4
million
- Bakken production averaged 92,000 net boed; 29 wells achieved
an average 30-day IP rate of 2,500 boed (77% oil) at an average
completed well cost of approx. $5.1
million
- Oklahoma production averaged
63,000 net boed; successful over-pressured STACK development
continues at optimized spacing designs, with infill pads developed
at three, six and eight wells per section equivalent spacing
delivering an average 30-day IP rate of 1,870 boed (53% oil)
- Northern Delaware production
averaged 26,000 net boed; 15 wells achieved an average 30-day IP
rate of 1,815 boed (65% oil), or 360 boed per 1,000 foot
lateral
- Portfolio optimization continues with agreement for divestiture
of U.K. business, including approx. $950
million of asset retirement obligations
- Strong financial position with total liquidity of $4.4 billion as of March
31; investment grade at all three major ratings agencies
following recent upgrade by Moody's Investor Services, Inc.
"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
|
|
$
|
1,537
|
|
Net gain
(loss) on commodity derivatives
|
(91)
|
|
310
|
|
(102)
|
|
Income
from equity method investments
|
11
|
|
64
|
|
37
|
|
Net gain
(loss) on disposal of assets
|
42
|
|
(4)
|
|
257
|
|
Other
income
|
35
|
|
15
|
|
4
|
|
Total revenues and
other income
|
1,197
|
|
1,765
|
|
1,733
|
|
Costs and
expenses:
|
|
|
|
Production
|
187
|
|
205
|
|
217
|
|
Shipping, handling and other operating
|
154
|
|
167
|
|
130
|
|
Exploration
|
59
|
|
116
|
|
52
|
|
Depreciation, depletion and amortization
|
554
|
|
613
|
|
590
|
|
Impairments
|
6
|
|
25
|
|
8
|
|
Taxes
other than income
|
72
|
|
84
|
|
64
|
|
General
and administrative
|
94
|
|
88
|
|
100
|
|
Total costs and
expenses
|
1,126
|
|
1,298
|
|
1,161
|
|
Income from
operations
|
71
|
|
467
|
|
572
|
|
Net
interest and other
|
(49)
|
|
(58)
|
|
(45)
|
|
Other
net periodic benefit costs
|
5
|
|
(3)
|
|
(3)
|
|
Income before
income taxes
|
27
|
|
406
|
|
524
|
|
Provision
(benefit) for income taxes
|
(147)
|
|
16
|
|
168
|
|
Net
income
|
$
|
174
|
|
$
|
390
|
|
$
|
356
|
|
|
|
|
|
Adjusted Net
Income
|
|
|
|
Net
income
|
$
|
174
|
|
$
|
390
|
|
$
|
356
|
|
Adjustments for
special items (pre-tax):
|
|
|
|
Net (gain) loss on
disposal of assets
|
(42)
|
|
4
|
|
(257)
|
|
Proved property
impairments
|
6
|
|
25
|
|
8
|
|
Exploratory dry well
costs, unproved property impairments and other
|
—
|
|
40
|
|
—
|
|
Pension
settlement
|
—
|
|
5
|
|
4
|
|
Unrealized (gain)
loss on derivative instruments
|
113
|
|
(336)
|
|
43
|
|
Other
|
12
|
|
6
|
|
—
|
|
Benefit for income
taxes related to special items
|
(7)
|
|
(13)
|
|
—
|
|
Adjustments for
special items
|
$
|
82
|
|
$
|
(269)
|
|
$
|
(202)
|
|
Adjusted net
income (a)
|
$
|
256
|
|
$
|
121
|
|
$
|
154
|
|
Per diluted
share:
|
|
|
|
Net income
|
$
|
0.21
|
|
$
|
0.47
|
|
$
|
0.42
|
|
Adjusted net income
(a)
|
$
|
0.31
|
|
$
|
0.15
|
|
$
|
0.18
|
|
Weighted average
diluted shares
|
820
|
|
829
|
|
852
|
|
(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)
|
2019
|
|
2018
|
|
2018
|
|
Segment
income
|
|
|
|
United
States
|
$
|
132
|
|
$
|
159
|
|
$
|
125
|
|
International
|
61
|
|
83
|
|
132
|
|
Segment
income
|
193
|
|
242
|
|
257
|
|
Not allocated to
segments
|
(19)
|
|
148
|
|
99
|
|
Net
income
|
$
|
174
|
|
$
|
390
|
|
$
|
356
|
|
Exploration
expenses
|
|
|
|
United
States
|
$
|
59
|
|
$
|
76
|
|
$
|
51
|
|
International
|
—
|
|
—
|
|
1
|
|
Segment exploration
expenses
|
59
|
|
76
|
|
52
|
|
Not allocated to
segments
|
—
|
|
40
|
|
—
|
|
Total
|
$
|
59
|
|
$
|
116
|
|
$
|
52
|
|
Cash
flows
|
|
|
|
Net cash provided by
operating activities
|
$
|
515
|
|
$
|
855
|
|
$
|
649
|
|
Minus: changes in
working capital
|
(157)
|
|
68
|
|
(83)
|
|
Net cash provided by
operations before changes in working capital (a)
|
$
|
672
|
|
$
|
787
|
|
$
|
732
|
|
|
|
|
|
Cash additions to
property, plant and equipment
|
$
|
(615)
|
|
$
|
(684)
|
|
$
|
(662)
|
|
(a) Non-GAAP
financial measure. See "Non-GAAP Measures" above for further
discussion.
|
Supplemental
Statistics (Unaudited)
|
Three Months
Ended
|
(In
millions)
|
Mar. 31,
2019
|
Organic Free Cash
Flow
|
|
Net cash provided by
operating activities
|
$
|
515
|
|
Minus: changes in
working capital
|
(157)
|
|
Minus: exploration
costs other than well costs
|
(10)
|
|
Development capital
expenditures
|
(569)
|
|
Dividends
|
(41)
|
|
EG LNG return of
capital and other
|
8
|
|
Organic free cash
flow (a)
|
$
|
80
|
|
(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
|
|
(mboed)
|
2019
|
|
2018
|
|
2018
|
|
Net
production
|
|
|
|
United
States
|
296
|
|
306
|
|
284
|
|
International,
excluding Libya (a)
|
92
|
|
105
|
|
114
|
|
Total net production,
excluding Libya (a)
|
388
|
|
411
|
|
398
|
|
Libya (a)
|
—
|
|
—
|
|
28
|
|
Total net
production
|
388
|
|
411
|
|
426
|
|
(a) The Company
closed on the sale of its Libya subsidiary in first quarter
2018.
|
|
|
|
|
Supplemental
Statistics (Unaudited)
|
Three Months
Ended
|
|
Mar.
31
|
|
Dec.
31
|
|
Mar.
31
|
|
(mboed)
|
2019
|
|
2018
|
|
2018
|
|
Net
production
|
|
|
|
United
States
|
296
|
|
306
|
|
284
|
|
Less: Divestitures
(a)
|
—
|
|
—
|
|
7
|
|
Total
divestiture-adjusted United States
|
296
|
|
306
|
|
277
|
|
|
|
|
|
International
|
92
|
|
105
|
|
142
|
|
Less: Divestitures
(b)
|
—
|
|
—
|
|
30
|
|
Total
divestiture-adjusted International
|
92
|
|
105
|
|
112
|
|
|
|
|
|
Total net
production divestiture-adjusted (a)(b)
|
388
|
|
411
|
|
389
|
|
(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
the following: (1) volumes associated with Libya which closed in
first
quarter 2018 and (2)
volumes associated with the sale of certain non-core
International
assets which closed
in 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
|
|
Mar.
31
|
|
Dec.
31
|
|
Mar.
31
|
|
|
2019
|
|
2018
|
|
2018
|
|
United States -
net sales volumes
|
|
|
|
Crude oil
and condensate (mbbld)
|
177
|
|
180
|
|
164
|
|
Eagle Ford
|
61
|
|
62
|
|
63
|
|
Bakken
|
79
|
|
82
|
|
61
|
|
Oklahoma
|
16
|
|
16
|
|
20
|
|
Northern Delaware
|
15
|
|
14
|
|
10
|
|
Other United States
(a)
|
6
|
|
6
|
|
10
|
|
Natural gas
liquids (mbbld)
|
55
|
|
55
|
|
50
|
|
Eagle Ford
|
23
|
|
24
|
|
21
|
|
Bakken
|
7
|
|
6
|
|
7
|
|
Oklahoma
|
18
|
|
19
|
|
18
|
|
Northern Delaware
|
6
|
|
5
|
|
3
|
|
Other United States
(a)
|
1
|
|
1
|
|
1
|
|
Natural gas
(mmcfd)
|
392
|
|
422
|
|
420
|
|
Eagle Ford
|
127
|
|
127
|
|
122
|
|
Bakken
|
36
|
|
35
|
|
35
|
|
Oklahoma
|
173
|
|
192
|
|
216
|
|
Northern Delaware
|
33
|
|
42
|
|
17
|
|
Other United States
(a)
|
23
|
|
26
|
|
30
|
|
Total United
States (mboed)
|
297
|
|
305
|
|
284
|
|
International -
net sales volumes
|
|
|
|
Crude oil
and condensate (mbbld)
|
23
|
|
29
|
|
63
|
|
Equatorial Guinea
|
12
|
|
16
|
|
15
|
|
United Kingdom
|
9
|
|
10
|
|
15
|
|
Libya (b)
|
—
|
|
—
|
|
28
|
|
Other
International
|
2
|
|
3
|
|
5
|
|
Natural gas
liquids (mbbld)
|
8
|
|
10
|
|
11
|
|
Equatorial Guinea
|
8
|
|
10
|
|
11
|
|
Natural gas
(mmcfd)
|
342
|
|
411
|
|
437
|
|
Equatorial Guinea
|
330
|
|
400
|
|
403
|
|
United Kingdom
(c)
|
12
|
|
11
|
|
12
|
|
Libya (b)
|
—
|
|
—
|
|
22
|
|
Total
International (mboed)
|
88
|
|
108
|
|
147
|
|
Total Company -
net sales volumes (mboed)
|
385
|
|
413
|
|
431
|
|
Net sales volumes
of equity method investees
|
|
|
|
LNG (mtd)
|
4,636
|
|
5,384
|
|
5,541
|
|
Methanol (mtd)
|
1,003
|
|
1,119
|
|
1,195
|
|
Condensate and LPG (boed)
|
9,890
|
|
15,071
|
|
12,416
|
|
(a)
|
The three months
ended March 31, 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.
|
(b)
|
The Company closed on
the sale of its Libya subsidiary in first quarter 2018.
|
(c)
|
Includes natural gas
acquired for injection and subsequent resale.
|
Supplemental
Statistics (Unaudited)
|
Three Months
Ended
|
|
Mar.
31
|
|
Dec.
31
|
|
Mar.
31
|
|
|
2019
|
|
2018
|
|
2018
|
|
United States -
average price realizations (a)
|
|
|
|
Crude oil
and condensate ($ per bbl) (b)
|
$
|
54.05
|
|
$
|
56.01
|
|
$
|
62.22
|
|
Eagle Ford
|
57.69
|
|
63.27
|
|
64.37
|
|
Bakken
|
52.15
|
|
51.11
|
|
60.20
|
|
Oklahoma
|
53.39
|
|
58.42
|
|
62.70
|
|
Northern Delaware
|
48.97
|
|
48.04
|
|
60.45
|
|
Other United States
(c)
|
56.19
|
|
60.41
|
|
61.71
|
|
Natural gas
liquids ($ per bbl)
|
$
|
15.66
|
|
$
|
24.71
|
|
$
|
22.95
|
|
Eagle Ford
|
17.05
|
|
21.46
|
|
22.85
|
|
Bakken
|
16.17
|
|
19.01
|
|
23.57
|
|
Oklahoma
|
13.66
|
|
29.55
|
|
22.59
|
|
Northern Delaware
|
15.27
|
|
28.99
|
|
22.11
|
|
Other United States
(c)
|
18.92
|
|
26.68
|
|
28.66
|
|
Natural gas
($ per mcf) (d)
|
$
|
2.93
|
|
$
|
3.27
|
|
$
|
2.59
|
|
Eagle Ford
|
2.99
|
|
3.69
|
|
3.03
|
|
Bakken
|
3.77
|
|
3.46
|
|
3.25
|
|
Oklahoma
|
2.90
|
|
3.22
|
|
2.20
|
|
Northern Delaware
|
1.93
|
|
1.80
|
|
3.09
|
|
Other United States
(c)
|
2.89
|
|
3.65
|
|
2.64
|
|
International -
average price realizations
|
|
|
|
Crude oil
and condensate ($ per bbl)
|
$
|
53.93
|
|
$
|
58.25
|
|
$
|
66.23
|
|
Equatorial Guinea
|
44.36
|
|
46.35
|
|
51.94
|
|
United Kingdom
|
67.62
|
|
78.49
|
|
69.95
|
|
Libya (e)
|
—
|
|
—
|
|
73.75
|
|
Other
International
|
47.76
|
|
52.52
|
|
55.29
|
|
Natural gas
liquids ($ per bbl)
|
$
|
1.96
|
|
$
|
2.25
|
|
$
|
1.83
|
|
Equatorial Guinea
(f)
|
1.00
|
|
1.00
|
|
1.00
|
|
United Kingdom
|
38.10
|
|
33.44
|
|
44.53
|
|
Natural gas
($ per mcf)
|
$
|
0.48
|
|
$
|
0.49
|
|
$
|
0.65
|
|
Equatorial Guinea
(f)
|
0.24
|
|
0.24
|
|
0.24
|
|
United Kingdom
|
7.02
|
|
9.13
|
|
7.32
|
|
Libya (e)
|
—
|
|
—
|
|
4.57
|
|
Benchmark
|
|
|
|
WTI crude oil (per
bbl)
|
$
|
54.90
|
|
$
|
59.34
|
|
$
|
62.89
|
|
Brent (Europe) crude
oil (per bbl) (g)
|
$
|
63.17
|
|
$
|
67.71
|
|
$
|
66.81
|
|
Henry Hub natural gas
(per mmbtu) (h)
|
$
|
3.15
|
|
$
|
3.64
|
|
$
|
3.00
|
|
(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 $1.10, $(1.50) and $(4.33) for first quarter 2019,
fourth quarter
2018, and first
quarter 2018.
|
(c)
|
The three months
ended March 31, 2018 includes sales volumes from the sale of
certain
United States
non-core conventional assets primarily in the Gulf of Mexico in
third quarter 2018.
|
(d)
|
Inclusion of realized
gains (losses) on natural gas derivative instruments would have a
minimal
impact on average
price realizations for the periods presented.
|
(e)
|
The Company closed on
the sale of its Libya subsidiary in first quarter 2018.
|
(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)
|
Settlement date
average per mmbtu.
|
Q2
2019
Production
Guidance
|
Oil Production
(mbbld)
|
|
Equivalent
Production (mboed)
|
Q2
2019
|
Q1
2019
|
Q2
2018
|
|
Q2
2019
|
Q1
2019
|
Q2
2018
|
|
Low
|
High
|
Divestiture
-Adjusted
(a)
|
Divestiture
-Adjusted
(a)
|
|
Low
|
High
|
Divestiture
-Adjusted
(a)
|
Divestiture
-Adjusted
(a)
|
Net
production
|
|
|
|
|
|
|
|
|
|
United
States
|
180
|
|
190
|
|
176
|
|
164
|
|
|
310
|
|
320
|
|
296
|
|
293
|
|
International
|
20
|
|
30
|
|
24
|
|
29
|
|
|
95
|
|
105
|
|
89
|
|
118
|
|
Total net
production
|
200
|
|
220
|
|
200
|
|
193
|
|
|
405
|
|
425
|
|
385
|
|
411
|
|
(a)
Divestiture-adjusted also removes
volumes associated with the Atrush block in Kurdistan which is
classified as held for sale.
|
The following tables set forth outstanding derivative contracts
as of April 29, 2019, and the
weighted average prices for those contracts:
|
|
2019
|
|
|
2020
|
|
|
2021
|
Crude
Oil
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
|
Full
Year
|
|
|
First
Quarter
|
NYMEX WTI
Three-Way Collars (a)
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
(Bbls/day)
|
|
70,000
|
|
|
80,000
|
|
|
80,000
|
|
|
|
9,945
|
|
|
|
—
|
|
Weighted average
price per Bbl:
|
|
|
|
|
|
|
|
|
|
|
|
|
Ceiling
|
|
$
|
71.21
|
|
|
$
|
74.19
|
|
|
$
|
74.19
|
|
|
|
$
|
70.00
|
|
|
|
—
|
|
Floor
|
|
$
|
55.86
|
|
|
$
|
56.75
|
|
|
$
|
56.75
|
|
|
|
$
|
55.00
|
|
|
|
—
|
|
Sold put
|
|
$
|
48.71
|
|
|
$
|
49.50
|
|
|
$
|
49.50
|
|
|
|
$
|
47.00
|
|
|
|
—
|
|
Basis Swaps -
Argus WTI Midland (b)
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
(Bbls/day)
|
|
10,000
|
|
|
15,000
|
|
|
15,000
|
|
|
|
15,000
|
|
|
|
—
|
|
Weighted average
price per Bbl
|
|
$
|
(0.82)
|
|
|
$
|
(1.40)
|
|
|
$
|
(1.40)
|
|
|
|
$
|
(0.94)
|
|
|
|
—
|
|
Basis Swaps -
Net Energy Clearbrook (c)
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
(Bbls/day)
|
|
1,000
|
|
|
1,000
|
|
|
1,000
|
|
|
|
—
|
|
|
|
—
|
|
Weighted average
price per Bbl
|
|
$
|
(3.50)
|
|
|
$
|
(3.50)
|
|
|
$
|
(3.50)
|
|
|
|
—
|
|
|
|
—
|
|
Basis Swaps -
NYMEX WTI / ICE Brent (d)
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
(Bbls/day)
|
|
5,000
|
|
|
5,000
|
|
|
5,000
|
|
|
|
5,000
|
|
|
|
3,278
|
|
Weighted average
price per Bbl
|
|
$
|
(7.24)
|
|
|
$
|
(7.24)
|
|
|
$
|
(7.24)
|
|
|
|
$
|
(7.24)
|
|
|
|
$
|
(7.24)
|
|
NYMEX Roll
Basis Swaps
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
(Bbls/day)
|
|
60,000
|
|
|
60,000
|
|
|
60,000
|
|
|
|
—
|
|
|
|
—
|
|
Weighted average price
per Bbl
|
|
$
|
0.38
|
|
|
$
|
0.38
|
|
|
$
|
0.38
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Between April 1, 2019
and April 29, 2019, the Company entered into 20,000 Bbls/day and
20,000 Bbls/day of three-way collars for July - December 2019 and
January - June 2020, respectively, with a ceiling of $70.00, a sold
put of $47.00, and a floor of $55.00. The Company also entered into
10,000 Bbls/day of three-way collars for July - December 2019 with
a ceiling of $74.09, 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.
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/marathon-oil-reports-first-quarter-2019-results-300842203.html
SOURCE Marathon Oil Corporation