Record Quarterly Free Cash Flow and over
$1.7 Billion of YTD Shareholder
Distributions
HOUSTON, Aug. 3, 2022
/PRNewswire/ -- Marathon Oil Corporation (NYSE:MRO) reported second
quarter 2022 net income of $966
million, or $1.37 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
$934 million, or $1.32 per diluted share. Net operating cash flow
was $1,678 million, or $1,586 million before changes in working capital
(adjusted CFO). Free cash flow was $1,323
million, or $1,213 million
before changes in working capital and including E.G. distributions
(adjusted free cash flow).
- Generated record quarterly adjusted free cash flow of over
$1.2 billion at 24% reinvestment
rate
-
- Returned $816 million of capital
to shareholders during second quarter, including $760 million of share repurchases and
$56 million base dividend; represents
51% of second quarter adjusted CFO
- Delivered flat sequential production with second quarter
oil-equivalent production of 343,000 net boed; oil production of
167,000 net bopd
- Continue to exceed commitment to return at least 40% of
adjusted CFO to equity investors
-
- Returned $2.5 billion to equity
investors through share repurchases and dividends since achieving
leverage objective in October 2021;
approximately 55% of adjusted CFO (~75% of adjusted free cash flow)
over trailing three quarters
- Executed $2.3 billion of share
repurchases since October 2021,
reducing outstanding share count by 15%; includes over $1.6 billion of share repurchases
year-to-date
- Expect $4.5 billion of 2022 free
cash flow, assuming $100/bbl WTI and
$6/MMBtu Henry Hub
"Second quarter represents another quarter of comprehensive
delivery on our Framework for Success, including strong corporate
returns, sustainable free cash flow generation, significant return
of capital to shareholders, and ESG excellence," said Chairman,
President, and CEO Lee Tillman. "Our
commitment to providing investors with the first call on cash flow
through our unique percentage of operating cash flow framework is
delivering truly compelling results, including generating over
$2 billion of adjusted free cash flow
and returning over $1.7 billion of
capital to shareholders year-to-date, while also driving
significant per share growth. Despite ongoing macro and equity
market volatility, we remain well positioned to continue delivering
financial results that compete with the best companies in the
S&P 500."
Return of Capital
Marathon Oil's percentage of CFO framework provides clear
visibility to significant return of capital to equity investors and
ensures the shareholder gets the first call on cash flow
generation. In a $60/bbl WTI or
higher price environment, the Company targets returning a minimum
of 40% of CFO to equity investors.
During second quarter, Marathon Oil returned 51% of adjusted CFO
to equity investors. Second quarter return of capital totaled
$816 million, including $760 million of share repurchases and
$56 million base dividend.
Since achieving its minimum leverage objective in October 2021 Marathon Oil has returned
$2.5 billion of capital to
shareholders. This includes over $2.3
billion of share repurchases that have driven a 15%
reduction in outstanding share count, contributing to significant
growth in per share metrics. Over the trailing three quarters, the
Company has consistently outperformed its minimum return of capital
objective, as shareholder distributions have accounted for
approximately 55% of adjusted CFO (~75% of adjusted free cash
flow).
In the current environment, given its strong free cash flow
profile and attractive market valuation, Marathon Oil's preferred
return of capital approach remains a competitive and sustainable
base dividend in addition to significant share repurchases.
2Q22 Financials
CASH FLOW AND CAPEX: Net cash provided by operations was
$1,678 million during second quarter,
or $1,586 million before changes in
working capital. Second quarter cash additions to property, plant,
and equipment totaled $355 million,
while capital expenditures (accrued) totaled $375 million.
FREE CASH FLOW: Free cash flow was $1,323
million, or $1,213 million of
adjusted free cash flow before changes in working capital and
including E.G. distributions.
BALANCE SHEET AND LIQUIDITY: Marathon Oil ended second quarter
with $1,162 million in cash and cash
equivalents. In July, Marathon Oil extended its revolving credit
facility by three years to 2027 and amended the capacity to
$2.5 billion.
ADJUSTMENTS TO NET INCOME: The adjustments to net income for
second quarter reduced net income by $32
million, primarily due to the income impact associated with
unrealized gains on derivative instruments.
2Q22 Operations
UNITED STATES (U.S.): U.S.
production averaged 283,000 net barrels of oil equivalent per day
(boed) for second quarter 2022. Oil production averaged 157,000 net
barrels of oil per day (bopd). The Company brought a total of 49
gross Company-operated wells to sales during second quarter,
consistent with guidance for approximately 50 wells to sales. U.S.
unit production costs averaged $5.80
per boe during second quarter.
Marathon Oil's second quarter production in the Eagle Ford
averaged 84,000 net boed, including 54,000 net bopd of oil, with 19
gross Company-operated wells to sales. In the Bakken, production
averaged 114,000 net boed, including 75,000 net bopd of oil, with
20 gross Company-operated wells to sales. In Oklahoma, production averaged 56,000 net boed,
including 14,000 net bopd of oil, with 10 gross Company-operated
wells to sales (excluding joint venture wells). Northern Delaware production averaged 20,000
net boed, including 10,000 net bopd of oil.
INTERNATIONAL: Equatorial
Guinea production averaged 60,000 net boed for second
quarter 2022, including 10,000 net bopd of oil. Unit production
costs averaged $2.83 per boe. Net
income from equity method investees totaled $152 million and total cash distributions from
equity method companies amounted to $146
million during second quarter.
For full year 2022, Marathon Oil raised E.G. equity income
guidance to a new range of $520
million to $560 million.
A slide deck and Quarterly Investor Packet will be posted to the
Company's website following this release today, August 3. On Thursday,
August 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, net cash provided by operating
activities before changes in working capital (adjusted CFO), free
cash flow, adjusted free cash flow, capital expenditures (accrued)
and reinvestment rate.
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 or
losses on dispositions, impairments of proved and certain unproved
properties, goodwill and equity method investments, changes in our
valuation allowance, unrealized derivative gains or losses 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 adjusted CFO is defined as net cash
provided by operating activities adjusted for changes in 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. Adjusted CFO
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 free cash flow is a non-GAAP measure.
Free cash flow is defined as net cash provided by operating
activities and cash additions to property, plant and equipment.
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 adjusted free cash flow is a non-GAAP
measure. Adjusted free cash flow before dividend ("adjusted free
cash flow") is defined as adjusted CFO, capital expenditures
(accrued), 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. Adjusted 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 capital expenditures (accrued) is a
non-GAAP measure. Capital expenditures (accrued) is defined as cash
additions to property, plant and equipment adjusted for the change
in capital accrual 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 capital accrual and other
items. Capital expenditures (accrued) 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.
Our presentation of reinvestment rate is a non-GAAP measure.
The reinvestment rate in the context of adjusted free cash flow is
defined as capital expenditures (accrued) divided by adjusted CFO.
The reinvestment rate in the context of free cash flow is defined
as cash additions to property, plant and equipment divided by net
cash provided by operating activities. Management believes the
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, future performance (both absolute and relative),
expected free cash flow, reinvestment rates, 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
statements regarding management's 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 and global and domestic market conditions;
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; liabilities or
corrective actions resulting from litigation, other proceedings and
investigations or alleged violations of law or permits; 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; the availability, cost, terms and timing of issuance
or execution of, competition for, and challenges to, mineral
licenses and leases and governmental and other permits and
rights-of-way, and our ability to retain mineral licenses and
leases; non-performance by third parties of contractual or legal
obligations, including due to bankruptcy; unexpected events that
may impact distributions from our equity method investees; 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 2021
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:
Kathy
Sauve: 713-296-3915
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)
|
2022
|
2022
|
2021
|
Revenues and other
income:
|
|
|
|
Revenues from
contracts with customers
|
$
2,168
|
$
1,761
|
$
1,254
|
Net gain (loss) on
commodity derivatives
|
(27)
|
(143)
|
(166)
|
Income from equity
method investments
|
152
|
127
|
49
|
Net gain (loss) on
disposal of assets
|
(1)
|
—
|
1
|
Other
income
|
11
|
8
|
5
|
Total revenues and
other income
|
2,303
|
1,753
|
1,143
|
Costs and
expenses:
|
|
|
|
Production
|
164
|
152
|
126
|
Shipping, handling and
other operating
|
191
|
185
|
167
|
Exploration
|
8
|
11
|
25
|
Depreciation,
depletion and amortization
|
436
|
423
|
532
|
Impairments
|
2
|
—
|
46
|
Taxes other than
income
|
140
|
104
|
74
|
General and
administrative
|
68
|
73
|
68
|
Total costs and
expenses
|
1,009
|
948
|
1,038
|
Income from
operations
|
1,294
|
805
|
105
|
Net interest and
other
|
(54)
|
(22)
|
(59)
|
Other net periodic
benefit (costs) credits
|
5
|
4
|
(1)
|
Loss on early
extinguishment of debt
|
—
|
—
|
(19)
|
Income before income
taxes
|
$
1,245
|
$
787
|
$
26
|
Provision (benefit)
for income taxes
|
279
|
(517)
|
10
|
Net
income
|
$
966
|
$
1,304
|
$
16
|
Adjusted Net Income
(Loss)
|
|
|
|
Net income
(loss)
|
$
966
|
$
1,304
|
$
16
|
Adjustments for special
items (pre-tax):
|
|
|
|
Net (gain) loss on
disposal of assets
|
1
|
—
|
(1)
|
Proved property
impairments
|
2
|
—
|
46
|
Exploratory dry well
costs, unproved property impairments and other
|
—
|
—
|
7
|
Pension
settlement
|
—
|
—
|
5
|
Unrealized (gain) loss
on derivative instruments
|
(43)
|
114
|
75
|
Unrealized (gain) loss
on interest rate swaps
|
1
|
26
|
(8)
|
Reduction in
workforce
|
—
|
—
|
1
|
Loss on early
extinguishment of debt
|
—
|
—
|
19
|
Other
|
(2)
|
27
|
13
|
Provision (benefit) for
income taxes related to special items (a)
|
9
|
(37)
|
—
|
Valuation
allowance
|
—
|
(685)
|
—
|
Adjustments for
special items
|
(32)
|
(555)
|
157
|
Adjusted net income
(loss) (b)
|
$
934
|
$
749
|
$
173
|
Per diluted
share:
|
|
|
|
Net income
(loss)
|
$
1.37
|
$
1.78
|
$
0.02
|
Adjusted net income
(loss) (b)
|
$
1.32
|
$
1.02
|
$
0.22
|
Weighted average
diluted shares
|
705
|
732
|
789
|
(a)
|
For the first and
second quarters of 2022, we applied the estimated U.S. and state
statutory rate of 22% to our special items. The remaining special
items in the second quarter of 2021 pertain to our U.S. operations
and did not incur a tax provision/benefit as we maintained a full
valuation allowance on our net federal deferred tax
assets.
|
(b)
|
Non-GAAP financial
measure. See "Non-GAAP Measures" above for further
discussion.
|
Supplemental Data
(Unaudited)
|
Three Months
Ended
|
|
June
30
|
Mar.
31
|
June
30
|
(Per
share)
|
2022
|
2022
|
2021
|
Adjusted Net Income
(Loss) Per Diluted Share
|
|
|
|
Net income
(loss)
|
$
1.37
|
$
1.78
|
$
0.02
|
Adjustments for special
items (pre-tax):
|
|
|
|
Net (gain) loss on
disposal of assets
|
—
|
—
|
—
|
Proved property
impairments
|
—
|
—
|
0.06
|
Exploratory dry well
costs, unproved property impairments and other
|
—
|
—
|
0.01
|
Pension
settlement
|
—
|
—
|
0.01
|
Unrealized (gain) loss
on derivative instruments
|
(0.06)
|
0.16
|
0.10
|
Unrealized (gain) loss
on interest rate swaps
|
—
|
0.04
|
(0.01)
|
Reduction in
workforce
|
—
|
—
|
—
|
Loss on early
extinguishment of debt
|
—
|
—
|
0.02
|
Other
|
—
|
0.03
|
0.01
|
Provision (benefit) for
income taxes related to special items
|
0.01
|
(0.05)
|
—
|
Valuation
allowance
|
—
|
(0.94)
|
—
|
Adjustments for
special items
|
(0.05)
|
(0.76)
|
0.20
|
Adjusted net income
(loss) per share (a)
|
$
1.32
|
$
1.02
|
$
0.22
|
(a)
|
Non-GAAP financial
measure. See "Non-GAAP Measures" above for further
discussion.
|
Supplemental Data
(Unaudited)
|
Three Months
Ended
|
|
June
30
|
Mar.
31
|
June
30
|
(In
millions)
|
2022
|
2022
|
2021
|
Segment income
(loss)
|
|
|
|
United
States
|
$
846
|
$
661
|
$
207
|
International
|
160
|
115
|
68
|
Not allocated to
segments
|
(40)
|
528
|
(259)
|
Net income
(loss)
|
$
966
|
$ 1,304
|
$
16
|
Net operating cash
flow before changes in working capital (Adjusted CFO)
(a)
|
|
|
|
Net cash provided by
operating activities
|
$ 1,678
|
$ 1,067
|
$
655
|
Changes in working
capital
|
(92)
|
213
|
46
|
Adjusted CFO
(a)
|
$ 1,586
|
$ 1,280
|
$
701
|
Free cash
flow
|
|
|
|
Net cash provided by
operating activities
|
$ 1,678
|
$ 1,067
|
$
655
|
Cash additions to
property, plant and equipment
|
(355)
|
(332)
|
(274)
|
Free cash
flow
|
$ 1,323
|
$
735
|
$
381
|
Adjusted free cash
flow (a)
|
|
|
|
Adjusted CFO
(a)
|
$ 1,586
|
$ 1,280
|
$
701
|
Adjustments:
|
|
|
|
Capital expenditures
(accrued) (a)
|
(375)
|
(348)
|
(289)
|
EG return of capital
and other
|
2
|
8
|
8
|
Adjusted free cash
flow (a)
|
$ 1,213
|
$
940
|
$
420
|
Reinvestment rate
(a)
|
24 %
|
27 %
|
41 %
|
Capital expenditures
(accrued) (a)
|
|
|
|
Cash additions to
property, plant and equipment
|
$
(355)
|
$
(332)
|
$
(274)
|
Change in capital
accrual
|
(20)
|
(16)
|
(15)
|
Additions to other
assets
|
—
|
—
|
—
|
Capital
expenditures (accrued) (a)
|
$
(375)
|
$
(348)
|
$
(289)
|
(a)
|
Non-GAAP financial
measure. See "Non-GAAP Measures" above for further
discussion.
|
Supplemental Data
(Unaudited)
|
2022 Adjusted
Free Cash Flow
Outlook (a)
|
(In
millions)
|
Expected free cash
flow
|
|
Expected net cash
provided by operating activities
|
$
5,800
|
Expected cash additions
to property, plant and equipment
|
(1,300)
|
Expected free cash
flow (b)
|
$
4,500
|
Expected
reinvestment rate (b)
|
22 %
|
(a)
|
Based upon a $100/bbl
WTI and $6/MMbtu Henry Hub price assumption.
|
(b)
|
Non-GAAP financial
measure. See "Non-GAAP Measures" above for further
discussion.
|
Supplemental
Statistics (Unaudited)
|
Three Months
Ended
|
|
June
30
|
Mar.
31
|
June
30
|
Net
Production
|
2022
|
2022
|
2021
|
Equivalent
Production (mboed)
|
|
|
|
United
States
|
283
|
281
|
283
|
International
|
60
|
64
|
65
|
Total net
production
|
343
|
345
|
348
|
Oil Production
(mbbld)
|
|
|
|
United
States
|
157
|
158
|
159
|
International
|
10
|
10
|
11
|
Total net
production
|
167
|
168
|
170
|
Supplemental
Statistics (Unaudited)
|
Three Months
Ended
|
|
June
30
|
Mar.
31
|
June
30
|
|
2022
|
2022
|
2021
|
United States - net
sales volumes
|
|
|
|
Crude oil and
condensate (mbbld)
|
157
|
158
|
159
|
Eagle Ford
|
54
|
53
|
60
|
Bakken
|
75
|
77
|
70
|
Oklahoma
|
14
|
12
|
12
|
Northern
Delaware
|
10
|
11
|
13
|
Other United States
(a)
|
4
|
5
|
4
|
Natural gas liquids
(mbbld)
|
65
|
64
|
60
|
Eagle Ford
|
15
|
14
|
14
|
Bakken
|
25
|
26
|
22
|
Oklahoma
|
18
|
17
|
17
|
Northern
Delaware
|
5
|
4
|
6
|
Other United States
(a)
|
2
|
3
|
1
|
Natural gas
(mmcfd)
|
365
|
350
|
386
|
Eagle Ford
|
90
|
80
|
103
|
Bakken
|
81
|
91
|
90
|
Oklahoma
|
146
|
132
|
150
|
Northern
Delaware
|
31
|
30
|
32
|
Other United States
(a)
|
17
|
17
|
11
|
Total United States
(mboed)
|
283
|
280
|
283
|
International - net
sales volumes
|
|
|
|
Crude oil and
condensate (mbbld)
|
10
|
8
|
12
|
Equatorial
Guinea
|
10
|
8
|
12
|
Natural gas liquids
(mbbld)
|
7
|
7
|
7
|
Equatorial
Guinea
|
7
|
7
|
7
|
Natural gas
(mmcfd)
|
256
|
276
|
276
|
Equatorial
Guinea
|
256
|
276
|
276
|
Total International
(mboed)
|
60
|
61
|
65
|
Total Company - net
sales volumes (mboed)
|
343
|
341
|
348
|
Net sales volumes of
equity method investees
|
|
|
|
LNG (mtd)
|
2,601
|
3,489
|
3,094
|
Methanol
(mtd)
|
964
|
982
|
744
|
Condensate and LPG
(boed)
|
10,363
|
6,914
|
7,892
|
(a)
|
Includes sales volumes
from certain non-core proved properties in our United States
segment.
|
Supplemental
Statistics (Unaudited)
|
Three Months
Ended
|
|
June
30
|
Mar.
31
|
June
30
|
|
2022
|
2022
|
2021
|
United States -
average price realizations (a)
|
|
|
|
Crude oil and
condensate ($ per bbl) (b)
|
$
110.10
|
$
94.43
|
$
64.73
|
Eagle Ford
|
110.16
|
96.38
|
65.51
|
Bakken
|
110.67
|
93.80
|
64.15
|
Oklahoma
|
108.85
|
94.08
|
63.77
|
Northern
Delaware
|
108.59
|
92.47
|
65.53
|
Other United States
(c)
|
107.15
|
88.79
|
63.80
|
Natural gas liquids
($ per bbl)
|
$
40.32
|
$
37.32
|
$
24.17
|
Eagle Ford
|
39.90
|
35.50
|
25.80
|
Bakken
|
39.29
|
38.21
|
24.37
|
Oklahoma
|
43.28
|
38.02
|
23.28
|
Northern
Delaware
|
36.88
|
35.29
|
22.63
|
Other United States
(c)
|
38.80
|
36.98
|
21.19
|
Natural gas ($ per
mcf)
|
$
6.84
|
$
4.79
|
$
2.61
|
Eagle Ford
|
6.92
|
4.51
|
3.09
|
Bakken
|
6.21
|
5.28
|
2.13
|
Oklahoma
|
7.06
|
4.71
|
3.01
|
Northern
Delaware
|
7.14
|
4.54
|
1.86
|
Other United States
(c)
|
7.02
|
4.49
|
(1.19)
|
International -
average price realizations
|
|
|
|
Crude oil and
condensate ($ per bbl)
|
$
79.74
|
$
59.63
|
$
52.78
|
Equatorial
Guinea
|
79.74
|
59.63
|
52.78
|
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)
|
$
108.52
|
$
95.01
|
$
66.17
|
Brent (Europe) crude
oil (per bbl) (e)
|
$
113.54
|
$
100.30
|
$
68.83
|
Mont Belvieu NGLs (per
bbl) (f)
|
$
41.73
|
$
38.24
|
$
24.81
|
Henry Hub natural gas
(per mmbtu) (g)
|
$
7.17
|
$
4.95
|
$
2.83
|
(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 $4.43 for the second
quarter 2022, by $2.00 for the first quarter 2022 and by $5.54 for
the second quarter 2021.
|
(c)
|
Includes sales volumes
from 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.
|
The following table sets forth outstanding derivative contracts
as of August 2, 2022, and the
weighted average prices for those contracts:
|
|
2022
|
2023
|
|
|
Third
Quarter
|
|
Fourth
Quarter
|
First
Quarter
|
Crude
Oil
|
|
|
|
|
|
NYMEX WTI
Three-Way Collars
|
|
|
|
|
|
Volume
(Bbls/day)
|
|
30,000
|
|
30,000
|
|
Weighted average price
per Bbl:
|
|
|
|
|
|
Ceiling
|
|
$
97.52
|
|
$
97.52
|
|
Floor
|
|
$
56.67
|
|
$
56.67
|
|
Sold put
|
|
$
46.67
|
|
$
46.67
|
|
NYMEX Roll Basis
Swaps
|
|
|
|
|
|
Volume
(Bbls/day)
|
|
60,000
|
|
60,000
|
|
Weighted average price
per Bbl
|
|
$
0.67
|
|
$
0.67
|
|
Natural
Gas
|
|
|
|
|
|
Henry Hub ("HH")
Three-Way Collars
|
|
|
|
|
|
Volume
(MMBtu/day)
|
|
100,000
|
|
100,000
|
|
Weighted average price
per MMBtu
|
|
|
|
|
|
Ceiling
|
|
$
7.13
|
|
$
7.13
|
|
Floor
|
|
$
3.88
|
|
$
3.88
|
|
Sold Put
|
|
$
2.88
|
|
$
2.88
|
|
HH Two-Way
Collars
|
|
|
|
|
|
Volume
(MMBtu/day)
|
|
—
|
|
50,000
|
50,000
|
Weighted average price
per MMBtu:
|
|
|
|
|
|
Ceiling
|
|
$
—
|
|
$
19.28
|
$
19.28
|
Floor
|
|
$
—
|
|
$
5.00
|
$
5.00
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/marathon-oil-reports-second-quarter-2022-results-301599285.html
SOURCE Marathon Oil Corporation