HOUSTON, May 6, 2020 /PRNewswire/ -- Marathon Oil
Corporation (NYSE: MRO) today reported a first quarter 2020 net
loss of $(46) million, or
$(0.06) per diluted share, which
includes the impact of certain items not typically represented in
analysts' earnings estimates and that would otherwise affect
comparability of results. The adjusted net loss was $(125) million, or $(0.16) per diluted share. Net operating cash
flow was $701 million, or
$550 million before changes in
working capital.
"I want to first extend my thanks to our resilient and dedicated
employees and contractors, all of whom remain hard at work day in
and day out, helping to supply our communities and our nation with
the clean and affordable energy we need to power our way of life,
as well as our eventual economic recovery," said Chairman,
President, and CEO Lee Tillman.
"While the safety and health of our people remains my top priority,
we continue to focus on the financial strength of our Company. In
addition to the previously announced $1.1
billion reduction to our 2020 capital budget, we also expect
to reduce our annualized cash costs by $350
million. We entered this unprecedented downturn on firm
financial footing, and we believe we are taking the necessary steps
to protect our hard-earned financial strength and flexibility."
Highlights
- Executing revised 2020 total capital expenditure budget of
$1.3 billion or less, a reduction of
at least $1.1 billion in comparison
to initial 2020 guidance and a 50% reduction in comparison to
actual 2019 capital spending
- Expect to capture annualized cash cost reductions of
$350 million, or 20%, relative to
initial 2020 budget
- Implementing broad-based cost saving measures, including base
salary reductions for CEO and other corporate officers, reduction
of Board of Director compensation, and U.S. employee and contractor
workforce reductions
- Temporarily suspending quarterly dividend and share repurchase
program
- Ended first quarter with $3.8
billion of liquidity, including $817
million of cash and cash equivalents and an undrawn
revolving credit facility of $3.0
billion
- Investment grade credit rating at all three primary rating
agencies, with recently completed reviews from Fitch and
S&P
- Protected second quarter cash flow through 117,000 bopd of
fixed price swaps and two-way collars at a weighted average floor
price of $30.33/bbl
"In response to the challenges facing our industry," Tillman
continued, "we are exercising the capital allocation flexibility
inherent in our multi-basin portfolio. We're dramatically reducing
our capital expenditures, including a pause in virtually all
completion activity during second quarter, and we will continue to
optimize our capital program in response to market conditions. We
are also aggressively managing our cost structure. While returning
capital to our shareholders remains a core Marathon Oil objective,
we are temporarily suspending our dividend and share repurchase
program, prioritizing our liquidity and balance sheet during this
period of heightened uncertainty. We plan to resume building on our
well-established track record of returning capital to our
shareholders upon improved visibility into normalizing macro
conditions and sustainable free cash flow generation. Collectively,
we believe these proactive steps, along with the strength of our
asset base, the resolve of our people, our execution excellence,
and our investment grade balance sheet, position us well to
navigate this challenging time for our industry."
United States (U.S.)
U.S. production averaged 340,000 net barrels of oil equivalent
per day (boed) for first quarter 2020. Oil production averaged
207,000 net barrels of oil per day (bopd), in comparison to first
quarter production guidance of 192,000 to 202,000 net bopd. U.S.
unit production costs were $4.63 per
boe, the lowest quarterly average since Marathon Oil became an
independent exploration and production company. First quarter
average completed well cost per lateral foot was down approximately
10% in comparison to the prior year average.
EAGLE FORD: Marathon Oil's Eagle Ford production averaged
114,000 net boed for first quarter 2020. Oil production averaged
72,000 net bopd. Marathon Oil operated four rigs and two frac crews
on average during first quarter and brought 38 gross
Company-operated wells to sales. The Company has suspended second
quarter completion activity and plans to transition to a lower and
more stable level of drilling and completion activity over the
second half of the year.
BAKKEN: Marathon Oil's Bakken production averaged 110,000 net
boed in the first quarter 2020. Oil production averaged 88,000 net
bopd. Marathon Oil operated four rigs and 1 frac crew on average
during first quarter and brought 25 gross Company-operated wells to
sales. As in the Eagle Ford, the Company has suspended second
quarter completion activity and plans to transition to a lower and
more stable level of drilling and completion activity over the
second half of the year.
OKLAHOMA: Marathon Oil's
Oklahoma production averaged
74,000 net boed in the first quarter 2020. Oil production averaged
21,000 net bopd. The Company brought 13 gross Company-operated
wells to sales during first quarter. Marathon Oil began the year
operating three rigs and one frac crew in Oklahoma but suspended all drilling and
completion operations before the end of first quarter. The Company
currently does not expect to bring any additional wells to sales in
Oklahoma this year.
NORTHERN DELAWARE: Marathon
Oil's Northern Delaware production
averaged 30,000 net boed in the first quarter 2020. Oil production
averaged 17,000 net bopd. The Company brought 6 gross
Company-operated wells to sales. Marathon Oil has suspended further
drilling activity in the Northern
Delaware, with only a limited number of wells to sales
expected through the balance of the year.
RESOURCE PLAY EXPLORATION: In response to the dramatic fall in
commodity prices, the Company has exercised the flexibility
inherent in this program and has suspended further activity, beyond
wells already in progress in the Texas Delaware oil play. The
Company therefore expects to drive an approximate $100 million reduction to REx capital
expenditures this year in comparison to initial guidance of
$200 million. REx spending is fully
contemplated within the Company's total capital spending budget of
$1.3 billion or less.
International
Equatorial Guinea production
averaged 82,000 net boed for first quarter 2020, including 14,000
net bopd of oil. Unit production costs averaged $2.35 per boe. The previously disclosed major
turnaround at the AMPCO methanol facility was completed during
first quarter.
Guidance
In light of the substantial change to global commodity prices
and the macro environment, the Company has withdrawn previously
provided guidance. At the revised capital spending budget of
$1.3 billion or less, for full-year
2020, the Company now expects its underlying U.S. crude oil
production to decline by approximately 8% on a divestiture-adjusted
basis, with a similar percentage decline expected for boe
production. Underlying International oil production is expected to
decline by approximately 7% on a divestiture-adjusted basis, with a
similar percentage decline expected for boe production. Underlying
production guidance excludes the potential impact from production
curtailments.
On this same underlying basis, full year 2020 U.S. unit
production expense is expected to average $4.25/boe to $5.25/boe and full year International unit
production expense is expected to average $2.25 to $2.75/boe.
These unit production expense guidance ranges are consistent with
previously provided guidance.
Marathon Oil currently expects that second quarter U.S. crude
oil and boe production will be down sequentially due to
curtailments along with natural decline from reduced activity. The
Company will continue to assess the need for curtailments on an
ongoing basis in response to market conditions.
Corporate
Consistent with a focus to continually reduce its cost
structure, Marathon Oil expects to capture annualized cash cost
reductions of approximately $350
million relative to its initial 2020 budget. Savings will be
realized across numerous expense categories, including production
expense, general and administrative expense, shipping and handling
expense, and production taxes. Savings are expected to be fully
realized on a run-rate basis by the end of this year, with
approximately 40% of these savings attributable to the Company's
fixed cost structure. For 2020, the Company expects to realize
total cash cost savings of approximately $260 million, inclusive of severance and partial
year timing impacts.
Cost saving measures include base salary reductions for certain
corporate officers, a reduction of Board of Director compensation,
and employee and contractor workforce reductions. More
specifically, corporate officers, including the Company's President
and Chief Executive Officer, the Company's Chief Financial Officer,
and other corporate officers will experience temporary base salary
reductions of 10% from May 4, 2020
through December 31, 2020. The
Company's Board of Directors has also agreed to a temporary
reduction of annual cash retainer fees for non-employee directors
of 20% for the third and fourth quarter of 2020.
Additionally, broad workforce actions have taken place that
reduce the Company's U.S. employee base by 16% and total contractor
base by 70%. Such reductions reflect a realignment of Company
resources with lower investment levels, while retaining a
foundation of essential talent to support an efficient recovery in
investment. The Company believes these actions, in addition to
other measures, will drive a 17% annualized reduction to corporate
general and administrative expense by the end of this year, in
comparison to 2019.
Marathon Oil generated first quarter net operating cash flow of
$701 million, or $550 million before changes in working
capital. The Company made $40 million of dividend payments and executed
$85 million of share repurchases
during first quarter. In response to dramatic commodity price
weakness and the significant uncertainty surrounding the near-term
macroeconomic and global oil supply and demand outlook, the Company
is temporarily suspending its quarterly dividend payment and its
share repurchase program. While returning capital to shareholders
remains a key objective for Marathon Oil, the Company is
prioritizing financial strength and liquidity preservation in the
current uncertain environment. The Company will revisit its return
of capital policy in coming quarters, expecting to resume quarterly
dividend payments pending improved visibility to normalizing
macroeconomic conditions and global oil supply and demand
balances.
Total liquidity as of March 31 was
approximately $3.8 billion, which
consisted of $0.8 billion in cash and
cash equivalents and an undrawn revolving credit facility of
$3.0 billion. Marathon Oil is
investment grade rated at all three primary rating agencies,
including recent reviews from Fitch and S&P, and has no
significant debt maturities until November of 2022.
The adjustments to net income for first quarter 2020 totaled
$(79) million before tax, primarily
due to the income impact associated with unrealized gains on
derivative instruments, partly offset by the full impairment of
remaining goodwill.
Marathon Oil has added to its hedge positions with a primary
focus on protecting near-term cash flow. As of May 4, 2020, the Company's second quarter open
crude hedge positions include 117,000 bopd of fixed price swaps and
two-way collars at a weighted average floor price of $30.33/bbl. Additional protection to second
quarter cash flow has been added through fixed price sales
agreements. The Company has also added hedges to protect near-term
regional basis differentials and NYMEX trade roll exposure.
A slide deck and Quarterly Investor Packet will be posted to the
Company's website following this release today, May 6. On Thursday, May
7, at 9:00 a.m. ET, the
Company will conduct a question and answer webcast/call, which will
include forward-looking information. The live webcast, replay and
all related materials will be available at
https://www.marathonoil.com/Investors.
Non-GAAP Measures
In analyzing and planning for its business, Marathon Oil
supplements its use of GAAP financial measures with non-GAAP
financial measures, including adjusted net income, adjusted net
income per share and net cash provided by operations before changes
in working capital.
Adjusted net income is defined as net income adjusted for
gain/loss on dispositions, certain property impairments, unrealized
derivative gain/loss on commodity instruments, pension settlement
losses and other items that could be considered "non-operating" or
"non-core" in nature. Management believes adjusted net income and
adjusted net income per share are useful to investors as additional
tools to meaningfully represent the Company's operating performance
and to compare Marathon to certain competitors.
Management believes net cash provided by operations before
changes in working capital is useful to investors to demonstrate
the Company's ability to generate cash quarterly or year-to-date by
eliminating differences caused by the timing of certain working
capital items.
These non-GAAP financial measures reflect an additional way
of viewing aspects of the business that, when viewed with GAAP
results may provide a more complete understanding of factors and
trends affecting the business and are a useful tool to help
management and investors make informed decisions about Marathon
Oil's financial and operating performance. These measures should
not be considered in isolation or as alternatives to their most
directly comparable GAAP financial measures. A reconciliation to
their most directly comparable GAAP financial measures can be found
in our investor package on our website at www.marathonoil.com and
in the tables below. Marathon Oil strongly encourages
investors to review the Company's consolidated financial statements
and publicly filed reports in their entirety and not rely on any
single financial measure.
Forward-looking Statements
This release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. All statements, other
than statements of historical fact, including without limitation
statements regarding the Company's future capital budgets and
allocations (including development capital budget and resource play
leasing and exploration spend), future performance, corporate-level
cash returns on invested capital, business strategy, asset quality,
drilling plans, production guidance, cash margins, asset sales and
acquisitions, leasing and exploration activities, production, oil
growth and other plans and objectives for future operations, are
forward-looking statements. Words such as "anticipate," "believe,"
"could," "estimate," "expect," "forecast," "guidance," "intend,"
"may," "outlook," "plan," "project," "seek," "should," "target,"
"will," "would," or similar words may be used to identify
forward-looking statements; however, the absence of these words
does not mean that the statements are not forward-looking. While
the Company believes its assumptions concerning future events are
reasonable, a number of factors could cause actual results to
differ materially from those projected, including, but not limited
to: conditions in the oil and gas industry, including supply/demand
levels for crude oil and condensate, NGLs and natural gas and the
resulting impact on price; changes in expected reserve or
production levels; changes in political or economic conditions in
the U.S. and Equatorial Guinea,
including changes in foreign currency exchange rates, interest
rates, inflation rates; actions taken by the members of the
Organization of the Petroleum Exporting Countries (OPEC) and
Russia affecting the production
and pricing of crude oil; and other global and domestic political,
economic or diplomatic developments; capital available for
exploration and development; our ability to complete our announced
acquisitions on the timeline currently anticipated, if at all;
risks related to the Company's hedging activities; voluntary or
involuntary curtailments, delays or cancellations of certain
drilling activities; well production timing; liability resulting
from litigation; drilling and operating risks; lack of, or
disruption in, access to storage capacity, pipelines or other
transportation methods; availability of drilling rigs, materials
and labor, including the costs associated therewith; difficulty in
obtaining necessary approvals and permits; non-performance by third
parties of contractual obligations; unforeseen hazards such as
weather conditions, a health pandemic (including COVID-19), acts of
war or terrorist acts and the government or military response
thereto; cyber-attacks; changes in safety, health, environmental,
tax and other regulations, requirements or initiatives, including
initiatives addressing the impact of global climate change, air
emissions, or water management; other geological, operating and
economic considerations; and the risk factors, forward-looking
statements and challenges and uncertainties described in the
Company's 2019 Annual Report on Form 10-K, Quarterly Reports on
Form 10-Q and other public filings and press releases, available at
www.marathonoil.com. Except as required by law, the Company
undertakes no obligation to revise or update any forward-looking
statements as a result of new information, future events or
otherwise.
Media Relations Contact:
Stephanie Gentry: 713-296-3307
Investor Relations Contacts:
Guy Baber: 713-296-1892
John Reid: 713-296-4380
Consolidated
Statements of Income (Unaudited)
|
Three Months
Ended
|
|
Mar.
31
|
Dec.
31
|
Mar.
31
|
(In millions,
except per share data)
|
2020
|
2019
|
2019
|
Revenues and other
income:
|
|
|
|
Revenues from
contracts with customers
|
$
|
1,024
|
|
$
|
1,233
|
|
$
|
1,200
|
|
Net gain (loss) on
commodity derivatives
|
202
|
|
(44)
|
|
(91)
|
|
Income (loss) from
equity method investments
|
(12)
|
|
24
|
|
11
|
|
Net gain (loss) on
disposal of assets
|
9
|
|
(6)
|
|
42
|
|
Other
income
|
7
|
|
8
|
|
35
|
|
Total revenues and
other income
|
1,230
|
|
1,215
|
|
1,197
|
|
Costs and
expenses:
|
|
|
|
Production
|
160
|
|
169
|
|
187
|
|
Shipping, handling
and other operating
|
144
|
|
143
|
|
154
|
|
Exploration
|
28
|
|
42
|
|
59
|
|
Depreciation,
depletion and amortization
|
644
|
|
616
|
|
554
|
|
Impairments
|
97
|
|
—
|
|
6
|
|
Taxes other than
income
|
66
|
|
79
|
|
72
|
|
General and
administrative
|
76
|
|
93
|
|
94
|
|
Total costs and
expenses
|
1,215
|
|
1,142
|
|
1,126
|
|
Income from
operations
|
15
|
|
73
|
|
71
|
|
Net interest and
other
|
(64)
|
|
(67)
|
|
(49)
|
|
Other net periodic
benefit costs
|
—
|
|
(6)
|
|
5
|
|
Loss on early
extinguishment of debt
|
—
|
|
(3)
|
|
—
|
|
Income (loss)
before income taxes
|
(49)
|
|
(3)
|
|
27
|
|
Provision (benefit)
for income taxes
|
(3)
|
|
17
|
|
(147)
|
|
Net income
(loss)
|
$
|
(46)
|
|
$
|
(20)
|
|
$
|
174
|
|
|
|
|
|
Adjusted Net
Income (Loss)
|
|
|
|
Net income
(loss)
|
$
|
(46)
|
|
$
|
(20)
|
|
$
|
174
|
|
Adjustments for
special items (pre-tax):
|
|
|
|
Net (gain) loss on
disposal of assets
|
(9)
|
|
6
|
|
(42)
|
|
Proved property
impairments
|
2
|
|
—
|
|
6
|
|
Goodwill
impairment
|
95
|
|
—
|
|
—
|
|
Pension
settlement
|
2
|
|
10
|
|
—
|
|
Unrealized (gain)
loss on derivative instruments
|
(171)
|
|
55
|
|
113
|
|
Other
|
2
|
|
4
|
|
12
|
|
Benefit for income
taxes related to special items
|
—
|
|
—
|
|
(7)
|
|
Adjustments for
special items
|
(79)
|
|
75
|
|
82
|
|
Adjusted net
income (loss) (a)
|
$
|
(125)
|
|
$
|
55
|
|
$
|
256
|
|
Per diluted
share:
|
|
|
|
Net income
(loss)
|
$
|
(0.06)
|
|
$
|
(0.03)
|
|
$
|
0.21
|
|
Adjusted net income
(loss) (a)
|
$
|
(0.16)
|
|
$
|
0.07
|
|
$
|
0.31
|
|
Weighted average
diluted shares
|
794
|
|
800
|
|
820
|
|
(a)
|
Non-GAAP financial
measure. See "Non-GAAP Measures" above for further
discussion.
|
Supplemental
Statistics (Unaudited)
|
Three Months
Ended
|
|
Mar.
31
|
Dec.
31
|
Mar.
31
|
(In
millions)
|
2020
|
2019
|
2019
|
Segment income
(loss)
|
|
|
|
United
States
|
$
|
(20)
|
|
$
|
148
|
|
$
|
132
|
|
International
|
(1)
|
|
33
|
|
61
|
|
Not allocated to
segments
|
(25)
|
|
(201)
|
|
(19)
|
|
Net income
(loss)
|
$
|
(46)
|
|
$
|
(20)
|
|
$
|
174
|
|
Cash
flows
|
|
|
|
Net cash provided by
operating activities
|
$
|
701
|
|
$
|
700
|
|
$
|
515
|
|
Minus: changes in
working capital
|
151
|
|
15
|
|
(157)
|
|
Net cash provided by
operations before changes in working capital (a)
|
$
|
550
|
|
$
|
685
|
|
$
|
672
|
|
|
|
|
|
Cash additions to
property, plant and equipment
|
$
|
(620)
|
|
$
|
(616)
|
|
$
|
(615)
|
|
(a)
|
Non-GAAP financial
measure. See "Non-GAAP Measures" above for further
discussion.
|
Supplemental
Statistics (Unaudited)
|
Three Months
Ended
|
Year
Ended
|
|
Mar.
31
|
Dec.
31
|
Mar.
31
|
Dec.
31
|
Net
Production
|
2020
|
2019
|
2019
|
2019
|
Equivalent
Production (mboed)
|
|
|
|
|
United
States
|
340
|
|
328
|
|
296
|
|
324
|
|
International
|
82
|
|
85
|
|
92
|
|
92
|
|
Total net
production
|
422
|
|
413
|
|
388
|
|
416
|
|
Less: Divestitures
(a)
|
—
|
|
—
|
|
16
|
|
8
|
|
Total
divestiture-adjusted net production
|
422
|
|
413
|
|
372
|
|
408
|
|
Oil Production
(mbbld)
|
|
|
|
|
United
States
|
207
|
|
196
|
|
177
|
|
191
|
|
International
|
14
|
|
15
|
|
26
|
|
21
|
|
Total net
production
|
221
|
|
211
|
|
203
|
|
212
|
|
Less: Divestitures
(b)
|
—
|
|
—
|
|
12
|
|
6
|
|
Total
divestiture-adjusted net production
|
221
|
|
211
|
|
191
|
|
206
|
|
(a)
|
Divestitures include
volumes associated with the following: (i) 2 mboed and 1 mboed for
the first quarter 2019 and the year 2019 related to the sale of
certain United States non-core conventional assets which closed in
first quarter 2019 (ii) 12 mboed and 6 mboed for the first quarter
2019 and the year 2019 related to the sale of our U.K. business
which closed in third quarter 2019 and (iii) 2 mboed and 1 mboed
for the first quarter 2019 and the year 2019 related to the sale of
our non-operated interest in the Atrush block in Kurdistan which
closed in second quarter 2019.
|
(b)
|
Divestitures include
volumes associated with the following: (i) 1 mbbld for the first
quarter 2019 related to the sale of certain United States non-core
conventional assets which closed in first quarter 2019 (ii) 9 mbbld
and 5 mbbld for the first quarter 2019 and the year 2019 related to
the sale of our U.K. business which closed in third quarter 2019
and (iii) 2 mbbld and 1 mbbld for the first quarter 2019 and the
year 2019 related to the sale of our non-operated interest in the
Atrush block in Kurdistan which closed in second quarter
2019.
|
Supplemental
Statistics (Unaudited)
|
Three Months
Ended
|
|
Mar.
31
|
Dec.
31
|
Mar.
31
|
|
2020
|
2019
|
2019
|
United States -
net sales volumes
|
|
|
|
Crude oil and
condensate (mbbld)
|
205
|
|
196
|
|
177
|
|
Eagle Ford
|
72
|
|
67
|
|
61
|
|
Bakken
|
88
|
|
86
|
|
79
|
|
Oklahoma
|
20
|
|
24
|
|
16
|
|
Northern
Delaware
|
17
|
|
16
|
|
15
|
|
Other United States
(a)
|
8
|
|
3
|
|
6
|
|
Natural gas
liquids (mbbld)
|
57
|
|
58
|
|
55
|
|
Eagle Ford
|
19
|
|
18
|
|
23
|
|
Bakken
|
12
|
|
12
|
|
7
|
|
Oklahoma
|
20
|
|
22
|
|
18
|
|
Northern
Delaware
|
5
|
|
5
|
|
6
|
|
Other United States
(a)
|
1
|
|
1
|
|
1
|
|
Natural gas
(mmcfd)
|
454
|
|
444
|
|
392
|
|
Eagle Ford
|
138
|
|
121
|
|
127
|
|
Bakken
|
58
|
|
59
|
|
36
|
|
Oklahoma
|
197
|
|
216
|
|
173
|
|
Northern
Delaware
|
44
|
|
41
|
|
33
|
|
Other United States
(a)
|
17
|
|
7
|
|
23
|
|
Total United
States (mboed)
|
338
|
|
328
|
|
297
|
|
International -
net sales volumes
|
|
|
|
Crude oil and
condensate (mbbld)
|
13
|
|
13
|
|
23
|
|
Equatorial
Guinea
|
13
|
|
13
|
|
12
|
|
United Kingdom
(b)
|
—
|
|
—
|
|
9
|
|
Other International
(c)
|
—
|
|
—
|
|
2
|
|
Natural gas
liquids (mbbld)
|
9
|
|
9
|
|
8
|
|
Equatorial
Guinea
|
9
|
|
9
|
|
8
|
|
Natural gas
(mmcfd)
|
352
|
|
363
|
|
342
|
|
Equatorial
Guinea
|
352
|
|
363
|
|
330
|
|
United Kingdom
(b)(d)
|
—
|
|
—
|
|
12
|
|
Total
International (mboed)
|
81
|
|
83
|
|
88
|
|
Total Company -
net sales volumes (mboed)
|
419
|
|
411
|
|
385
|
|
Net sales volumes
of equity method investees
|
|
|
|
LNG (mtd)
|
5,064
|
|
5,180
|
|
4,636
|
|
Methanol
(mtd)
|
1,185
|
|
1,153
|
|
1,003
|
|
Condensate and LPG
(boed)
|
10,638
|
|
11,832
|
|
9,890
|
|
(a)
|
Includes sales
volumes from the sale of certain non-core proved properties in our
United States segment.
|
(b)
|
The Company closed on
the sale of its U.K. business on July 1, 2019.
|
(c)
|
Other International
includes volumes for the Atrush block in Kurdistan, which was sold
in the second quarter of 2019.
|
(d)
|
Includes natural gas
acquired for injection and subsequent resale.
|
Supplemental
Statistics (Unaudited)
|
Three Months
Ended
|
|
Mar.
31
|
Dec.
31
|
Mar.
31
|
|
2020
|
2019
|
2019
|
United States -
average price realizations (a)
|
|
|
|
Crude oil and
condensate ($ per bbl) (b)
|
$
|
44.23
|
|
$
|
54.83
|
|
$
|
54.05
|
|
Eagle Ford
|
46.82
|
|
57.63
|
|
57.69
|
|
Bakken
|
41.14
|
|
51.98
|
|
52.15
|
|
Oklahoma
|
44.87
|
|
55.49
|
|
53.39
|
|
Northern
Delaware
|
46.78
|
|
57.08
|
|
48.97
|
|
Other United States
(c)
|
47.82
|
|
56.26
|
|
56.19
|
|
Natural gas
liquids ($ per bbl)
|
$
|
9.97
|
|
$
|
15.47
|
|
$
|
15.66
|
|
Eagle Ford
|
9.50
|
|
15.72
|
|
17.05
|
|
Bakken
|
8.43
|
|
13.12
|
|
16.17
|
|
Oklahoma
|
11.69
|
|
17.30
|
|
13.66
|
|
Northern
Delaware
|
8.14
|
|
12.35
|
|
15.27
|
|
Other United States
(c)
|
11.74
|
|
13.98
|
|
18.92
|
|
Natural gas ($ per
mcf)
|
$
|
1.60
|
|
$
|
2.10
|
|
$
|
2.93
|
|
Eagle Ford
|
1.84
|
|
2.40
|
|
2.99
|
|
Bakken
|
1.54
|
|
2.31
|
|
3.77
|
|
Oklahoma
|
1.60
|
|
1.95
|
|
2.90
|
|
Northern
Delaware
|
0.80
|
|
1.72
|
|
1.93
|
|
Other United States
(c)
|
1.94
|
|
1.89
|
|
2.89
|
|
International -
average price realizations
|
|
|
|
Crude oil and
condensate ($ per bbl)
|
$
|
36.88
|
|
$
|
48.26
|
|
$
|
53.93
|
|
Equatorial
Guinea
|
36.88
|
|
48.26
|
|
44.36
|
|
United Kingdom
(d)
|
—
|
|
—
|
|
67.62
|
|
Other International
(e)
|
—
|
|
—
|
|
47.76
|
|
Natural gas
liquids ($ per bbl)
|
$
|
1.00
|
|
$
|
1.00
|
|
$
|
1.96
|
|
Equatorial Guinea
(f)
|
1.00
|
|
1.00
|
|
1.00
|
|
United Kingdom
(d)
|
—
|
|
—
|
|
38.10
|
|
Natural gas ($ per
mcf)
|
$
|
0.24
|
|
$
|
0.24
|
|
$
|
0.48
|
|
Equatorial Guinea
(f)
|
0.24
|
|
0.24
|
|
0.24
|
|
United Kingdom
(d)
|
—
|
|
—
|
|
7.02
|
|
Benchmark
|
|
|
|
WTI crude oil (per
bbl)
|
$
|
45.78
|
|
$
|
56.87
|
|
$
|
54.90
|
|
Brent (Europe) crude
oil (per bbl) (g)
|
$
|
50.44
|
|
$
|
63.41
|
|
$
|
63.17
|
|
Mont Belvieu NGLs
(per bbl) (h)
|
$
|
13.27
|
|
$
|
17.15
|
|
$
|
21.77
|
|
Henry Hub natural gas
(per mmbtu) (i)
|
$
|
1.95
|
|
$
|
2.50
|
|
$
|
3.15
|
|
(a)
|
Excludes gains or
losses on commodity derivative instruments.
|
(b)
|
Inclusion of realized
gains (losses) on crude oil derivative instruments would have
affected average price realizations by $1.47, $0.58, and $1.10, for
the first quarter 2020, the fourth quarter 2019, and the first
quarter 2019.
|
(c)
|
Includes sales
volumes from the sale of certain non-core proved properties in our
United States segment.
|
(d)
|
The Company closed on
the sale of its U.K. business on July 1, 2019.
|
(e)
|
Other International
includes volumes for the Atrush block in Kurdistan, which was sold
in the second quarter of 2019.
|
(f)
|
Represents fixed
prices under long-term contracts with Alba Plant LLC, Atlantic
Methanol Production Company LLC and/or Equatorial Guinea LNG
Holdings Limited, which are equity method investees. The Alba Plant
LLC processes the NGLs and then sells secondary condensate,
propane, and butane at market prices. Marathon Oil includes its
share of income from each of these equity method investees in the
International segment.
|
(g)
|
Average of monthly
prices obtained from Energy Information Administration
website.
|
(h)
|
Bloomberg Finance
LLP: Y-grade Mix NGL of 55% ethane, 25% propane, 5% butane, 8%
isobutane and 7% natural gasoline.
|
(i)
|
Settlement date
average per mmbtu.
|
The following table sets forth outstanding derivative contracts
as of May 4, 2020, and the weighted
average prices for those contracts:
|
|
2020
|
|
|
2021
|
|
Crude
Oil
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
|
Full
Year
|
|
NYMEX WTI
Three-Way Collars
|
|
|
|
|
|
|
|
|
|
|
Volume
(Bbls/day)
|
|
—
|
|
|
80,000
|
|
|
80,000
|
|
|
|
—
|
|
|
Weighted average
price per Bbl:
|
|
|
|
|
|
|
|
|
|
|
Ceiling
|
|
$
|
—
|
|
|
$
|
64.40
|
|
|
$
|
64.40
|
|
|
|
$
|
—
|
|
|
Floor
|
|
$
|
—
|
|
|
$
|
55.00
|
|
|
$
|
55.00
|
|
|
|
$
|
—
|
|
|
Sold put
|
|
$
|
—
|
|
|
$
|
48.00
|
|
|
$
|
48.00
|
|
|
|
$
|
—
|
|
|
NYMEX WTI
Two-Way Collars
|
|
|
|
|
|
|
|
|
|
|
Volume
(Bbls/day)
|
|
40,000
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
Weighted average
price per Bbl:
|
|
|
|
|
|
|
|
|
|
|
Ceiling
|
|
$
|
40.31
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
Floor
|
|
$
|
32.89
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
Fixed Price WTI
Swaps
|
|
|
|
|
|
|
|
|
|
|
Volume
(Bbls/day)
|
|
76,703
|
|
|
10,000
|
|
|
—
|
|
|
|
—
|
|
|
Weighted average
price per Bbl:
|
|
$
|
28.99
|
|
|
$
|
32.77
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
Basis Swaps -
Argus WTI Midland (a)
|
|
|
|
|
|
|
|
|
|
|
Volume
(Bbls/day)
|
|
15,000
|
|
|
15,000
|
|
|
15,000
|
|
|
|
—
|
|
|
Weighted average
price per Bbl
|
|
$
|
(0.94)
|
|
|
$
|
(0.94)
|
|
|
$
|
(0.94)
|
|
|
|
$
|
—
|
|
|
Basis Swaps -
NYMEX WTI / ICE Brent (b)
|
|
|
|
|
|
|
|
|
|
|
Volume
(Bbls/day)
|
|
5,000
|
|
|
5,000
|
|
|
5,000
|
|
|
|
808
|
|
|
Weighted average
price per Bbl
|
|
$
|
(7.24)
|
|
|
$
|
(7.24)
|
|
|
$
|
(7.24)
|
|
|
|
$
|
(7.24)
|
|
|
Basis Swaps -
NYMEX WTI / MEH (c)
|
|
|
|
|
|
|
|
|
|
|
Volume
(Bbls/day)
|
|
26,813
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
Weighted average
price per Bbl
|
|
$
|
(0.75)
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
NYMEX Roll
Basis Swaps
|
|
|
|
|
|
|
|
|
|
|
Volume
(Bbls/day)
|
|
43,571
|
|
|
60,000
|
|
|
10,000
|
|
|
|
—
|
|
|
Weighted average
price per Bbl
|
|
$
|
(1.62)
|
|
|
$
|
(1.58)
|
|
|
$
|
(1.94)
|
|
|
|
$
|
—
|
|
|
(a)
|
The basis
differential price is indexed against Argus WTI Midland.
|
(b)
|
The basis
differential price is indexed against Intercontinental Exchange
("ICE") Brent and NYMEX WTI.
|
(c)
|
The basis
differential price is indexed against Argus WTI Houston.
|
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SOURCE Marathon Oil Corporation