Market Snapshot
  • U.S.
  • Europe
  • Asia
Ticker Volume Price Price Delta
DJIA 16,262.56 89.32 0.55%
S&P 500 1,842.98 12.37 0.68%
NASDAQ 4,034.16 11.47 0.29%
Ticker Volume Price Price Delta
STOXX 50 3,091.52 -40.05 -1.28%
FTSE 100 6,541.61 -42.15 -0.64%
DAX 9,173.71 -165.46 -1.77%
Ticker Volume Price Price Delta
NIKKEI 14,335.11 338.30 2.42%
TOPIX 1,158.69 22.60 1.99%
HANG SENG 22,813.92 142.66 0.63%

Marathon Oil Corporation Reports Third Quarter 2013 Results



Marathon Oil Corporation Reports Third Quarter 2013 Results

HOUSTON, Nov. 4, 2013 (GLOBE NEWSWIRE) -- Marathon Oil Corporation (NYSE:MRO)
today reported third quarter 2013 net income of $569 million, or $0.80 per
diluted share, compared to net income in the second quarter of 2013 of $426
million, or $0.60 per diluted share. For the third quarter of 2013, adjusted
net income was $617 million, or $0.87 per diluted share, compared to adjusted
net income of $478 million, or $0.67 per diluted share, for the second quarter
of 2013.

> Third quarter net income increased to $569 million, up 34% from second
quarter
> Adjusted net income per share increased to $0.87, up 30% from second quarter
> Eagle Ford production doubled compared to third quarter 2012
   - Net production approx. 92,000 boed last seven days of October
   - Expect to achieve 2013 exit rate of approx. 100,000 boed net
> High bidder on two deepwater Gabon blocks, contract negotiations under way
> Previously announced $1 billion share repurchase program under way
   - $500 million complete, phase 2 expected to commence in fourth quarter
> 2013 reserve replacement expected to exceed 140%, excluding acquisitions and
divestitures

                                                            Three Months Ended
                                                            Sept. 30  June 30
(In millions, except per diluted share data)                2013      2013
Adjusted net income (a)                                     $617      $478
Adjustments for special items (net of taxes):                          
Unrealized gain (loss) on crude oil derivative instruments  (39)      32
Net gain (loss) on dispositions                             0         (73)
Pension settlement                                          (9)       (11)
Net income                                                  $569      $426
Adjusted net income - per diluted share (a)                 $0.87     $0.67
Net income - per diluted share                              $0.80     $0.60
Revenues and other income                                   $3,914    $3,898
Weighted average shares - diluted                           711       714
Exploration expenses                                                   
Unproved property impairments                               $42       $40
Dry well costs                                              83        50
Geological and geophysical                                  9         12
Other                                                       19        31
Total exploration expenses                                  $153      $133
Cash flow                                                              
Cash flow from operations before changes in working capital $1,440    $1,445
(b)
Changes in working capital                                  205       (577)
Cash flow from operations                                   $1,645    $868

(a)  Adjusted net income is a non-GAAP financial measure and should not be
considered a substitute for net income as determined in accordance with
accounting principles generally accepted in the United States. See below for
further discussion of adjusted net income.

(b)  Cash flow from operations before changes in working capital is a non-GAAP
financial measure and should not be considered a substitute for cash flow from
operations as determined in accordance with accounting principles generally
accepted in the United States. See below for further discussion of cash flow
from operations before changes in working capital.

"Marathon Oil achieved strong financial results in the third quarter,
delivering $1.44 billion in operating cash flows before working capital
changes, and adjusted net income of $617 million, 29 percent higher than the
second quarter," said Lee M. Tillman, Marathon Oil's president and CEO. "All
three business segments performed well, capturing the higher liquid
hydrocarbon realizations both domestically and internationally, compared to
the second quarter.

"Marathon Oil again delivered a major planned turnaround on time and on
budget, this time with the Company's Alvheim facility in Norway. Sales
volumes, excluding Libya, came in slightly higher during the quarter
reflecting the impact of the planned turnaround and expected moderate growth
in the resource plays. With acreage retention drilling in the Eagle Ford now
essentially complete, volumes have returned to a more robust growth profile in
the fourth quarter. The Company's Eagle Ford production averaged approximately
92,000 net barrels of oil equivalent per day (boed) for the last seven days of
October, placing us on track to achieve a 2013 exit rate of approximately
100,000 net boed. Additionally, during the quarter, the Oil Sands Mining
segment achieved better reliability compared to the second quarter.

"With our renewed global exploration portfolio we've captured significant
resource potential through the recently announced Mirawa-1 oil and natural gas
discovery on the Company-operated Harir Block in the Kurdistan Region of Iraq
and a deepwater pre-salt discovery offshore Gabon. We're currently drilling or
participating in other prospects across Kurdistan, Ethiopia, Kenya and the
Gulf of Mexico, and we were the high bidder on two new Company-operated blocks
in deepwater pre-salt Gabon. Additionally, approval was received from the
Kurdistan Regional Government for a development plan on the Atrush Block.

"Marathon Oil is well placed to grow our production volumes at a 5 to 7
percent compound annual rate from 2012 to 2017, and we expect reserve
replacement in 2013 to exceed 140 percent, excluding any acquisitions or
divestitures. At our Dec. 11 Analyst Day we will provide more details on our
forward business plans and strategy for delivering shareholder value," Tillman
said. 
 

Sales and Production Volumes

Total Company sales volumes (excluding Libya) during the third quarter of 2013
averaged 459,000 net boed compared to 457,000 net boed for the second quarter
of 2013.

                                      Three Months Ended
                                      Sept. 30  June 30
(mboed)                               2013      2013
Net Sales Volumes                                
North America E&P                     200       201
International E&P excluding Libya (a) 210       213
Oil Sands Mining (b)                  49        43
Total excluding Libya                 459       457
Libya                                 21        49
Total                                 480       506

(a) Libya is excluded because of uncertainty around sustained production and
sales levels.

(b) Includes blendstocks.

                                      Three Months Ended Guidance (a)
                                      Sept. 30  June 30  Q4
(mboed)                               2013      2013     2013
Net Production Available for Sale                         
North America E&P                     200       201      202-210
International E&P excluding Libya (b) 203       217      210-218
Oil Sands Mining (c)                  41        37       40-45
Total excluding Libya                 444       455       
Libya                                 18        45        
Total                                 462       500       

(a) This guidance excludes the effect of acquisitions or dispositions not
previously announced.

(b) Libya is excluded because of uncertainty around sustained production and
sales levels.

(c) Upgraded bitumen excluding blendstocks.

The difference between production volumes available for sale and recorded
sales volumes was primarily due to the timing of International E&P liftings.

Production available for sale from all segments (excluding Libya) for the
third quarter of 2013 averaged 444,000 net boed, compared to the second
quarter of 2013 average of 455,000 net boed. Production available for sale was
403,000 net boed for the North America E&P and International E&P segments
combined (excluding Libya), compared to the Company's guidance for the quarter
of 395,000 to 415,000 net boed. The OSM segment had net production in the
quarter of 41,000 barrels per day (bbld) (excluding blendstocks), within the
Company's third quarter guidance of 40,000 to 45,000 bbld.

North America E&P production available for sale averaged 200,000 net boed in
the third quarter, relatively flat compared to the second quarter due to
natural production declines in base assets partly offset by growth from
resource plays.

International E&P production available for sale for the third quarter of 2013
averaged 203,000 net boed (excluding Libya), which was lower than the second
quarter of 2013 average of 217,000 net boed primarily as a result of a planned
turnaround at Alvheim in Norway and temporary production shut-in of the
outside-operated Foinaven asset.

The Company had three oil liftings from Libya in July, but no oil liftings in
August or September due to labor strikes at the Es Sider oil terminal. During
the third quarter of 2013, net sales in Libya averaged 21,000 boed [16,000
bbld of oil and 30 million cubic feet per day (mmcfd) of natural gas],
compared to net sales of 49,000 boed (45,000 bbld of oil and 24 mmcfd of
natural gas) in the second quarter. Marathon Oil has not included production
from Libya in forecasts because of the uncertainty around sustained production
levels. Oil liftings have not resumed to date, and the oil terminal remains
closed.

As shown in the table above, production available for sale in the fourth
quarter of 2013 is expected to be higher than the third quarter. Full year
2013 guidance for production available for sale from the combined North
America E&P and International E&P segments (excluding Libya) remains unchanged
at 410,000 to 425,000 net boed. Full year 2013 production guidance for the OSM
segment remains 40,000 to 44,000 net bbld of synthetic crude oil.
 

Segment Results

Total segment income was $669 million in the third quarter of 2013, compared
to $623 million in the second quarter of 2013.

                      Three Months Ended
                      Sept. 30  June 30
(In millions)         2013      2013
Segment Income (Loss)            
North America E&P     $242      $221
International E&P     321       382
Oil Sands Mining      106       20
Segment Income (a)    $669      $623

(a)   See Supplemental Statistics below for a reconciliation of segment income
to net income as reported under generally accepted accounting principles.
 

North America E&P

The North America E&P segment reported income of $242 million in the third
quarter of 2013, compared to $221 million in the second quarter of 2013. The
increase was primarily due to higher liquid hydrocarbon realizations and lower
exploration expenses, partially offset by a realized loss on crude oil
derivative instruments.

EAGLE FORD: Marathon Oil's production in the Eagle Ford shale averaged 81,000
net boed in the third quarter. While total Eagle Ford production was up only
slightly over the second quarter, due largely to acreage retention drilling in
areas of lower working interest, liquids volumes grew 3 percent while natural
gas volumes declined. Approximately 64 percent of third quarter net production
was crude oil/condensate, 17 percent was natural gas liquids (NGLs) and 19
percent was natural gas. As a result of pad drilling and the timing of
bringing wells online, Marathon Oil reached total depth on 70 gross Company
operated wells and brought 71 gross operated wells to sales, compared to 82
and 79 gross wells respectively in the second quarter. Marathon Oil's average
time to drill an Eagle Ford well, spud-to-total depth, averaged 12 days in the
third quarter, a top-quartile performance in the areas where Marathon Oil
operates. Drilling times have improved by 20 percent over the year-ago
quarter, while drilling and completion costs have decreased by over 20 percent
over the same period. Marathon Oil continues to expect to exit 2013 at a net
production rate of approximately 100,000 boed for the Eagle Ford. 

BAKKEN: Marathon Oil averaged approximately 38,000 net boed of production in
the Bakken during the third quarter, essentially flat compared to the previous
quarter, due to the temporary shut-in of producing wells while completing
adjacent new wells. The Company reached total depth on 21 gross wells and
brought the same number of wells to sales during the third quarter, compared
to 22 and 13 gross wells respectively in the second quarter. During the third
quarter Marathon Oil's average time to drill a Bakken well improved by 20
percent compared to the year-ago quarter, averaging 14 days spud-to-total
depth in the third quarter of 2013, a top-quartile performance in the areas
where Marathon Oil operates. Marathon Oil's Bakken production averages
approximately 90 percent crude oil, 4 percent NGLs and 6 percent natural gas.

OKLAHOMA RESOURCE BASINS: The Company's unconventional Oklahoma production
averaged 15,000 net boed during the third quarter, an increase of
approximately 15 percent compared to the previous quarter with liquids volumes
growing approximately 40 percent. During the third quarter, the Company
reached total depth on three gross wells and brought two gross wells to sales.
Marathon Oil spud two wells in the Central Oklahoma Mississippi Lime in early
October and expects to spud wells in the Granite Wash by year end.

GULF OF MEXICO: Marathon Oil spud the Company-operated Madagascar exploration
well on De Soto Canyon Block 757 on Sept. 23. The Company reduced its working
interest in the Madagascar prospect from 100 percent to 40 percent as a result
of two farm-outs prior to spud. Marathon Oil expects the well to reach total
depth late in the fourth quarter.
 

International E&P

The International E&P segment reported income of $321 million in the third
quarter of 2013, compared to segment income of $382 million in the second
quarter of 2013. The decrease is primarily a result of lower volumes in Libya
and in Norway due to the planned turnaround in the third quarter, as well as
higher exploration expenses, partially offset by lower taxes, primarily in
Libya. International exploration included $87 million in dry well costs and
unproved property impairments largely related to wells in Norway and the
Kurdistan Region of Iraq.

EQUATORIAL GUINEA: Net production available for sale averaged approximately
112,000 boed in the third quarter, compared to approximately 101,000 boed in
the second quarter of 2013, which was impacted by a planned turnaround in
April.

NORWAY: During the third quarter the Company completed a 9-day turnaround at
Alvheim on time and on budget. Net production available for sale averaged
69,000 boed for the third quarter, compared to 85,000 boed produced in the
second quarter of 2013.

KURDISTAN REGION OF IRAQ: On Oct. 30, the Company announced the Mirawa-1
discovery on the Company's operated Harir Block. The well, which was drilled
to a total depth of 14,000 feet, encountered multiple stacked oil and natural
gas producing zones with equipment constrained flow rates totaling more than
11,000 bbld of oil, 72 mmcfd of non-associated natural gas and 1,700 bbld of
condensate. Marathon Oil holds a 45 percent working interest in the Harir
Block. The Mirawa-1 well will be suspended for potential future use as a
producing well, and the drilling rig will be moved to the Jisik-1 prospect
nine miles to the northwest to test a similar structure on the Block.

In October, following further evaluation of the Safen-1 dry well results,
Marathon Oil notified the Kurdistan Ministry of Natural Resources (MNR) that
it does not intend to participate in any further exploration on the Safen
Block.

On the outside-operated Sarsang Block, in which Marathon Oil holds a 25
percent working interest, the East Swara Tika-1 exploration well has been
drilled to a depth of 5,300 feet toward a planned total depth of 11,000 feet.
The Mangesh well has had two open-hole and three cased-hole drill stem tests
completed with further testing planned.

On the outside-operated Atrush Block, following a declaration of
commerciality, a plan for field development was approved by the Kurdistan MNR
in late September. The development project will consist of drilling three
production wells and constructing a central processing facility. Marathon Oil
and its partners expect to achieve first production by early 2015 with an
estimated initial gross production of approximately 30,000 bbld of oil. The
approval of the Field Development Plan for Phase 1 provides for a 25-year
production period. Subject to further drilling and testing results, and
partner and Government approvals, a potential Phase 2 development would add an
additional 30,000 bbld (gross) facility. Within the potential Phase 2
development area, the Atrush-3 appraisal well, located approximately four
miles east of existing wells, confirmed the extension of the oil bearing
reservoir and has been suspended as a potential future producer. Marathon Oil
holds a 15 percent working interest in the Atrush Block.

ETHIOPIA: The Tultule prospect, approximately two miles from the Sabisa-1
well, was spud on Sept. 20 with a projected total depth of 7,900 feet. The
well is expected to reach total depth by the end of the fourth quarter.
Marathon Oil holds a 20 percent non-operated working interest in the South Omo
Block.

KENYA: The Bahasi-1 well was spud on Sept. 27 and is expected to reach a total
depth of 9,800 feet in the fourth quarter. Marathon Oil holds a 50 percent
non-operated working interest in Block 9.

GABON: Marathon Oil announced in August that the Diaman-1B exploration well
offshore Gabon had encountered 160-180 net feet of hydrocarbon pay in the
deepwater pre-salt play. Preliminary analysis suggests that the hydrocarbons
are natural gas with condensate content, pending results of ongoing analysis
of well data. Marathon Oil holds a 21.25 percent non-operated working interest
in the Diaba License G4-223.

In late October, the Company was the high bidder as operator of two deepwater
blocks in the pre-salt play. Award of the blocks, G13 and E12, is subject to
Government approvals and negotiating the Exploration and Production Sharing
Contracts.
 

Oil Sands Mining (OSM)

The OSM segment reported income of $106 million for the third quarter of 2013,
compared to $20 million in the second quarter of 2013. The increase in income
was primarily a result of higher third quarter price realizations and net
sales volumes compared to the second quarter which was impacted by unplanned
mine downtime and the planned upgrader turnaround at the non-operated
Athabasca Oil Sands Project (AOSP) in Canada. Third quarter operating costs
were lower than the second quarter of 2013, primarily as a result of the
turnaround completion.
 

Corporate and Other

The change in working capital in the third quarter of 2013 includes one tax
installment payment for Norway, versus the second quarter which included two
tax installment payments for Norway and an annual tax payment to Equatorial
Guinea.

Excluding Libya, the year-to-date 2013 effective tax rate would be 60 percent.
In the third quarter, the Company recorded a net favorable tax adjustment of
$42 million, largely related to greater expected utilization of foreign tax
credits in future periods than previously estimated.

Marathon Oil announced in September it is moving forward with plans to
repurchase $1 billion of the Company's common stock pursuant to its
outstanding share repurchase authorization. The $1 billion in share
repurchases will be completed in two phases. The initial phase of $500 million
in common stock repurchases was completed in September with the repurchase of
14.1 million shares at an average price of $35.53. The second $500 million
phase is anticipated to be completed after closing the previously announced
sale of the Company's 10 percent working interest in Block 31 offshore Angola.
That transaction, with a total value of approximately $1.5 billion, excluding
any purchase price adjustments, is anticipated to close in the fourth quarter
of 2013.

Additionally, Marathon Oil has reached an agreement in principle to sell its
10 percent working interest in the Production Sharing Contract and Joint
Operating Agreement in Block 32 offshore Angola to Sonangol E.P. The
anticipated transaction has a total value of approximately $590 million,
excluding any purchase price adjustments. Pending execution of definitive
agreements and government approval, the transaction is expected to close in
the fourth quarter of 2013, with an effective date of Jan. 1, 2013.

Including the anticipated sale of its interest in Angola Block 32, the Company
has agreed upon or closed on nearly $3.5 billion in divestitures over the
period of 2011 to date, surpassing the $3 billion upper end of its stated
three-year target.

The Company also announced in September the acquisition of approximately 4,800
net acres in the core of its south Texas Eagle Ford position for approximately
$97 million, including carried interest of approximately $23 million.
 

Special Items

In August 2012, Marathon Oil entered into crude oil derivative instruments
related to a portion of its forecast North America E&P crude oil sales. For
the third quarter of 2013, an after-tax unrealized loss of $39 million ($61
million pre-tax) was recorded related to these crude oil derivative
instruments.

Marathon Oil recorded an after-tax settlement charge of $9 million ($15
million pre-tax) in the third quarter of 2013 in connection with the Company's
U.S. pension plans.

The Company's webcast commentary and associated slides related to the
Company's earnings, as well as the Quarterly Investor Packet, will be posted
to the Company's website at http:ir.marathonoil.com and to its mobile app as
soon as practical following this release today, Nov. 4. The Company will
conduct a question and answer webcast/call on Tuesday, Nov. 5 at 9:00 a.m.
EST. The webcast slides, associated commentary and answers to questions will
include forward-looking information. To listen to the Nov. 5 live webcast,
visit the Marathon Oil website at http://www.marathonoil.com. Replays of the
webcast will be available through Dec. 5.

The Company will host a Marathon Oil Analyst Day on the morning of Wednesday,
Dec. 11. Marathon Oil's leadership team will present details about the
Company's business plans and strategies. The presentations and answers to
questions will include forward-looking information. The Marathon Oil Analyst
Day will be webcast live on the Company's website at
http://www.marathonoil.com.
 

                                    # # #

In addition to net income determined in accordance with generally accepted
accounting principles (GAAP), Marathon Oil has provided supplementally
"adjusted net income,"a non-GAAP financial measure which facilitates
comparisons to earnings forecasts prepared by stock analysts and other third
parties. Such forecasts generally exclude the effects of items that are
considered non-recurring, are difficult to predict or to measure in advance or
that are not directly related to Marathon Oil's ongoing operations. A
reconciliation between GAAP net income and "adjusted net income"is provided in
a table on page 1 of this release. "Adjusted net income" should not be
considered a substitute for net income as reported in accordance with GAAP.
Management, as well as certain investors, uses "adjusted net income" to
evaluate Marathon Oil's financial performance between periods. Management also
uses "adjusted net income" to compare Marathon Oil's performance to certain
competitors.

In addition to cash flow from operations determined in accordance with GAAP,
Marathon Oil has provided supplementally "cash flow from operations before
changes in working capital," a non-GAAP financial measure, which management
believes demonstrates the Company's ability to internally fund capital
expenditures, pay dividends and service debt. A reconciliation between GAAP
cash flow from operations and "cash flow from operations before changes in
working capital" is provided in a table on page 1 of this release. "Cash flow
from operations before changes in working capital" should not be considered a
substitute for cash flow from operations as reported in accordance with GAAP.
Management, as well as certain investors, uses "cash flow from operations
before changes in working capital" to evaluate Marathon Oil's financial
performance between periods. Management also uses "cash flow from operations
before changes in working capital" to compare Marathon Oil's performance to
certain competitors.

This release contains forward-looking statements with respect to the timing,
levels and the compound annual growth rate of the Company's worldwide liquid
hydrocarbon, natural gas and synthetic crude oil production, the 2013 exit
rate of production in the Eagle Ford resource play, exploration drilling
activity in the Gulf of Mexico, Ethiopia, the Kurdistan Region of Iraq and
Kenya, expectations as to reserve replacement in 2013, the timing of first
production for the Atrush Block, a potential Phase 2 development on the Atrush
Block and other potential development projects, the award of two blocks in
Gabon, the timing of closing the sale of the Company's 10 percent working
interest in Block 31 offshore Angola, the anticipated sale of the Company's 10
percent working interest in Block 32 offshore Angola, and the common stock
repurchase program. The average times to drill a well referenced in the
release may not be indicative of future drilling times. The initial or current
production rates referenced in this release may not be indicative of future
production rates. Factors that could potentially affect the timing, levels and
compound annual growth rate of the Company's worldwide liquid hydrocarbon,
natural gas and synthetic crude oil production, the 2013 exit rate of
production in the Eagle Ford resource play, exploration drilling activity in
the Gulf of Mexico, Ethiopia, the Kurdistan Region of Iraq and Kenya, the
timing of first production for the Atrush Block, and a potential Phase 2
development on the Atrush Block and other potential development projects
include pricing, supply and demand for liquid hydrocarbons and natural gas,
the amount of capital available for exploration and development, regulatory
constraints, timing of commencing production from new wells, drilling rig
availability, availability of materials and labor, the inability to obtain or
delay in obtaining necessary government or third-party approvals and permits,
unforeseen hazards such as weather conditions, acts of war or terrorist acts
and the governmental or military response thereto, and other geological,
operating and economic considerations. Expectations as to reserve replacement
in 2013 are based on current expectations, good faith estimates and
projections and are not guarantees of future performance. The award of two
blocks in Gabon is subject to government approvals and negotiation of the
Exploration and Production Sharing Contracts. The timing of closing the sale
of the Company's 10 percent working interest in Block 31 offshore Angola is
subject to the satisfaction of customary closing conditions and obtaining
necessary government and regulatory approvals. The anticipated sale of the
Company's 10 percent working interest in Block 32 offshore Angola is subject
to the execution of definitive agreements and obtaining government approval.
The common stock repurchase program could be affected by changes in the prices
of and demand for liquid hydrocarbons and natural gas, actions of competitors,
disruptions or interruptions of the Company's exploration or production
operations, unforeseen hazards such as weather conditions or acts of war or
terrorist acts and other operating and economic considerations. Actual results
may differ materially from these expectations, estimates and projections and
are subject to certain risks, uncertainties and other factors, some of which
are beyond the Company's control and difficult to predict. The foregoing
factors (among others) could cause actual results to differ materially from
those set forth in the forward-looking statements. In accordance with the
"safe harbor" provisions of the Private Securities Litigation Reform Act of
1995, Marathon Oil Corporation has included in its Annual Report on Form 10-K
for the year ended December 31, 2012, and subsequent Forms 10-Q and 8-K,
cautionary language identifying other important factors, though not
necessarily all such factors, that could cause future outcomes to differ
materially from those set forth in the forward-looking statements.

Consolidated Statements of Income (Unaudited)        Three Months Ended
                                                     Sept. 30 June 30 Sept. 30
(In millions, except per share data)                 2013     2013    2012
Revenues and other income:                                             
Sales and other operating revenues, including        $3,119   $3,419  $3,405
related party
Marketing revenues                                   668      499     631
Income from equity method investments                114      77      122
Net gain (loss) on disposal of assets                (6)      (107)   (12)
Other income                                         19       10      15
Total revenues and other income                      3,914    3,898   4,161
Costs and expenses:                                                    
Production                                           575      614     601
Marketing, including purchases from related parties  664      495     629
Other operating                                      126      86      112
Exploration                                          153      133     170
Depreciation, depletion and amortization             720      738     625
Impairments                                          11       0       8
Taxes other than income                              91       93      55
General and administrative                           152      164     179
Total costs and expenses                             2,492    2,323   2,379
Income from operations                               1,422    1,575   1,782
Net interest and other                               (66)     (71)    (53)
Income from operations before income taxes           1,356    1,504   1,729
Provision for income taxes                           787      1,078   1,279
Net income                                           $569     $426    $450
Adjusted net income (a)                              $617     $478    $454
Adjustments for special items (net of taxes):                          
Unrealized gain (loss) on crude oil derivative       (39)     32      29
instruments
Net gain (loss) on dispositions                      0        (73)    (11)
Pension settlement                                   (9)      (11)    (22)
Net income                                           $569     $426    $450
Per Share Data                                                         
Basic:                                                                 
Net income                                           $0.80    $0.60   $0.64
Diluted:                                                               
Adjusted net income (a)                              $0.87    $0.67   $0.64
Net income                                           $0.80    $0.60   $0.63
Weighted Average Shares:                                               
Basic                                                707      710     706
Diluted                                              711      714     709

(a) Adjusted net income is a non-GAAP financial measure and should not be
considered a substitute for net income as determined in accordance with
accounting principles generally accepted in the United States. See above for
further discussion of adjusted net income.

Supplemental Statistics (Unaudited)                  Three Months Ended
                                                     Sept. 30 June 30 Sept. 30
(in millions)                                        2013     2013    2012
Segment Income (Loss)                                                  
North America E&P                                    $242     $221    $107
International E&P                                    321      382     405
Oil Sands Mining                                     106      20      66
Segment income                                       669      623     578
Items not allocated to segments, net of income                         
taxes:
Corporate and unallocated                            (52)     (145)   (124)
Unrealized gain (loss)  on crude oil derivative      (39)     32      29
instruments
Net gain (loss) on dispositions                      0        (73)    (11)
Pension settlement                                   (9)      (11)    (22)
Net  income                                          $569     $426    $450
Capital Expenditures (b)                                               
North America E&P                                    $831     $904    $1,045
International E&P                                    254      241     229
Oil Sands Mining                                     65       97      41
Corporate                                            12       15      24
Total                                                $1,162   $1,257  $1,339
Exploration Expenses                                                   
North America E&P                                    $48      $76     $140
International E&P                                    105      57      30
Total                                                $153     $133    $170
Provision for Income Taxes                                             
Current income taxes                                 $883     $1,009  $1,381
Deferred income taxes                                (96)     69      (102)
Total                                                $787     $1,078  $1,279

(b)  Capital expenditures include changes in accruals.

Supplemental Statistics (Unaudited)                Three Months Ended
                                                   Sept. 30 June 30 Sept. 30
                                                   2013     2013    2012
North America E&P - Net Sales Volumes                                
Liquid Hydrocarbons (mbbld)                        150      148     111
Bakken                                             36       37      29
Eagle Ford                                         66       64      33
Anadarko Woodford                                  7        5       3
Other North America                                41       42      46
Crude Oil and Condensate (mbbld)                   126      126     98
Bakken                                             34       35      28
Eagle Ford                                         52       50      26
Anadarko Woodford                                  2        1       1
Other North America                                38       40      43
Natural Gas Liquids (mbbld)                        24       22      13
Bakken                                             2        2       1
Eagle Ford                                         14       14      7
Anadarko Woodford                                  5        4       2
Other North America                                3        2       3
Natural Gas (mmcfd)                                297      316     366
Bakken                                             12       12      7
Eagle Ford                                         93       99      46
Anadarko Woodford                                  47       49      38
Alaska                                             0        0       88
Other North America                                145      156     187
International E&P - Net Sales Volumes                                
Liquid Hydrocarbons (mbbld)                        138      177     182
Equatorial Guinea                                  32       30      39
Norway                                             61       79      80
United Kingdom                                     20       14      14
Libya                                              16       45      49
Other International                                9        9       0
Natural Gas (mmcfd)                                562      514     585
Equatorial Guinea                                  463      401     459
Norway                                             43       53      54
United Kingdom (c)                                 26       36      46
Libya                                              30       24      26
Oil Sands Mining - Net Sales Volumes                                 
Synthetic Crude Oil (mbbld) (d)                    49       43      53
                                                                     
Total Company - Net Sales Volumes (mboed)          480      506     505
Net Sales Volumes of Equity Method Investees (mtd)                   
LNG                                                7,302    5,820   7,065
Methanol                                           1,364    973     1,146

(c)  Includes natural gas acquired for injection and subsequent resale of 4
mmcfd, 8 mmcfd and 18 mmcfd in the third and second quarters of 2013 and the
third quarter of 2012, respectively.

(d)  Includes blendstocks.

Supplemental Statistics (Unaudited)          Three Months Ended
                                             Sept. 30 June 30 Sept. 30
                                             2013     2013    2012
North America E&P - Average Realizations (e)                   
Liquid Hydrocarbons ($ per bbl) (f)          $90.49   $84.51  $83.56
Bakken                                       95.24    85.96   81.54
Eagle Ford                                   87.96    83.90   85.94
Anadarko Woodford                            48.80    50.61   48.59
Other North America                          97.50    88.07   85.57
Crude Oil and Condensate ($ per bbl)         $101.05  $93.75  $89.89
Bakken                                       97.76    88.65   83.68
Eagle Ford                                   104.08   99.40   99.85
Anadarko Woodford                            98.23    90.08   86.96
Other North America                          100.09   91.33   87.99
Natural Gas Liquids ($ per bbl)              $35.01   $31.72  $37.88
Bakken                                       44.08    35.92   38.01
Eagle Ford                                   30.11    28.09   33.38
Anadarko Woodford                            32.98    33.61   29.95
Other North America                          59.87    43.73   52.82
Natural Gas ($ per mcf)                      $3.51    $4.19   $3.61
Bakken                                       3.73     4.47    1.98
Eagle Ford                                   3.53     4.17    2.91
Anadarko Woodford                            3.51     4.15    2.57
Alaska                                       0.00     0.00    6.28
Other North America                          3.52     4.19    2.81
International E&P- Average Realizations (e)                    
Liquid Hydrocarbons ($ per bbl)              $101.68  $100.00 $105.71
Equatorial Guinea                            57.35    54.09   65.34
Norway                                       115.45   107.21  114.87
United Kingdom                               108.34   101.85  98.15
Libya                                        124.19   117.55  125.57
Other International                          107.01   100.30  0.00
Natural Gas ($ per mcf)                      $1.95    $2.37   $2.25
Equatorial Guinea (g)                        0.24     0.24    0.24
Norway                                       12.17    12.13   10.76
United Kingdom                               10.67    10.23   9.32
Libya                                        5.92     4.65    7.43
Oil Sands Mining - Average Realizations (e)                    
Synthetic Crude Oil ($ per bbl)              $102.64  $89.39  $81.13

(e)  Excludes gains or losses on derivative instruments.

(f)  Inclusion of realized gains (losses) on crude oil derivative instruments
would have increased (decreased) North America E&P average liquid hydrocarbon
realizations by $(1.81) per bbl for the third quarter of 2013 and $1.26 per
bbl for the second quarter of 2013.  There were no realized gains (losses) on
crude oil derivative instruments in the third quarter of 2012.

(g)  Represents fixed prices under long-term contracts with Alba Plant LLC,
Atlantic Methanol Production Company LLC and Equatorial Guinea LNG Holdings
Limited, which are equity method investees. Marathon Oil includes its share of
income from each of these equity method investees in the International E&P
segment.

CONTACT: Media Relations Contacts:
         Lee Warren: 713-296-4103
         John Porretto: 713-296-4102
        
         Investor Relations Contacts:
         Howard Thill: 713-296-4140
         Chris Phillips: 713-296-3213
Sponsored Links
Advertisement
Advertisements
Sponsored Links
Advertisement