Marathon Oil Corporation Reports Full-Year and Fourth Quarter 2013 Results

Marathon Oil Corporation Reports Full-Year and Fourth Quarter 2013 Results

HOUSTON, Feb. 5, 2014 (GLOBE NEWSWIRE) -- Marathon Oil Corporation (NYSE: MRO)
today reported full-year 2013 adjusted net income of $1.874 billion, or $2.64
per diluted share, compared to adjusted net income of $1.736 billion, or $2.45
per diluted share, for full-year 2012. Full-year 2013 net income was $1.753
billion, or $2.47 per diluted share, compared to $1.582 billion, or $2.23 per
diluted share, in 2012.

2013 Key Highlights

•  Profitable volumes growth of 11% year over year (net production
available for sale, excluding Alaska and Libya)
    -- Increased U.S. resource play average net production 86% from 2012
    -- Averaged over 100,000 net barrels of oil equivalent per day (boed)
in Eagle Ford for final two weeks of year
    -- Recorded more than 97% average operational availability for
Company-operated assets

•  Proved reserves replacement of 194%, excluding dispositions;
approximately 2.2 billion barrels of oil equivalent (boe) in proved reserves
at year end

•  Quality resource capture through focused exploration and opportunistic
business development
    -- Discoveries at Mirawa-1 on Company-operated Harir Block in the
Kurdistan Region of Iraq and Diaman-1B on non-operated Diaba License in Gabon
    -- Grew South Central Oklahoma Oil Province (SCOOP) acreage position
over 20% at low cost
    -- Added 4,800 high-value acres in core of Eagle Ford position

•  Rigorous portfolio management; exceeded three-year $1.5 to $3 billion
divestiture target
    -- Sale of interest in Angola Block 31 scheduled to close on or around
Feb. 11; Block 32 sale expected to close during first quarter of 2014
    -- Marketing U.K. and Norway businesses

•  Competitive shareholder value through dividends and share repurchases
    -- Increased quarterly dividend 12% to $0.19 per share
    -- Repurchased 14 million common shares for $500 million and increased
remaining share repurchase authorization to $2.5 billion

For the fourth quarter of 2013, adjusted net income was $418 million, or $0.60
per diluted share, compared to adjusted net income of $617 million, or $0.87
per diluted share, for the third quarter of 2013. The Company reported fourth
quarter 2013 net income of $375 million, or $0.54 per diluted share, compared
to net income in the third quarter of 2013 of $569 million, or $0.80 per
diluted share. The decrease in quarterly earnings was primarily due to a
significant decline in domestic and Canadian crude oil price realizations
during the fourth quarter as well as higher non-cash unproved property
impairments.

                                         Three Months Ended  Year Ended
                                         Dec. 31  Sept. 30   Dec. 31 Dec. 31
(In millions, except per diluted share    2013     2013       2013    2012
data)
Adjusted net income (a)                   $418     $617       $1,874  $1,736
Adjustments for special items (net of                              
taxes):
Unrealized gain (loss) on crude oil       6       ( 39 )     ( 33 )  34
derivative instruments
Impairments                               (29)     0          (39)    (231)
Net gain (loss) on dispositions           ( 11 )   0         ( 20 )  72
Pension settlement                        ( 9 )    ( 9 )      ( 29 )  ( 29 )
Net income                                $375     $569       $1,753  $1,582
Adjusted net income - per diluted share   $0.60    $0.87      $2.64   $2.45
(a)
Net income - per diluted share            $0.54    $0.80      $2.47   $2.23
Revenues and other income (b)             $3,294   $3,826     $14,959 $16,221
Weighted average shares - diluted         701      711        709     710
Exploration expenses                                               
Unproved property impairments             $114     $42        $580    $227
Dry well costs                            64       83         218     230
Geological and geophysical                38       8          84      135
Other                                     26       19         106     114
Total exploration expenses                $242     $152       $988    $706
Cash flow                                                          
Cash flow from continuing operations      $1,120   $1,382     $5,446  $4,499
before changes in working capital (c)
Changes in working capital for continuing (12)     266        (355)   (463)
operations
Cash flow from discontinued operations    121      (3 )       179     (19)
Cash flow from operations                 $1,229   $1,645     $5,270  $4,017

(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)In 2013, Marathon Oil entered into agreements to sell its Angola assets;
therefore, the Angola business is reflected as discontinued operations in all
presented periods.

(c) 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.

"During 2013, we continued to maintain a sharp focus on our core values,
operating reliability and execution excellence, marked by our 11 percent
overall production growth (excluding Alaska and Libya), exceeding 2013 growth
guidance. This focus on excellence drove best-in-class operating reliability
across our Company-operated assets. In particular, our strong year-over-year
net production growth in the top U.S. liquids resource plays -- 136 percent in
the Eagle Ford, 34 percent in the Bakken and 68 percent in the Oklahoma
resource basins -- demonstrated our ability to drive superior operating
results," said Lee M. Tillman, Marathon Oil's president and CEO.

"Our robust capital allocation combined with these strong operating results
led to a 2013 reserve replacement of 194 percent, excluding dispositions, at a
very competitive finding and development cost of approximately $16 per boe. We
ended 2013 with net proved reserves of approximately 2.2 billion boe, an 8
percent increase from 2012, topping the 40-year proved reserves record set
last year.

"Our strong fourth quarter operating results were offset by decreased price
realizations, particularly in the U.S. and Canada. Fourth quarter U.S. liquid
hydrocarbon (LHC) realizations fell almost 12 percent and synthetic crude oil
(SCO) realizations declined 23 percent compared to the third quarter of 2013.

"As outlined at our Analyst Day in December, we expect our resource play
production to grow more than 30 percent in 2014 compared to 2013 and to
achieve a total Company production growth rate of approximately 4 percent
(excluding Alaska, Angola and Libya). We've allocated more than 60 percent of
our $5.9 billion 2014 capital, investment and exploration budget to our three
outstanding resource plays, where we've accelerated activity and already
ramped up to our committed 28-rig program. It's clear these high-value assets
and our relentless pursuit of reliability are integral to our ongoing strategy
to grow profitable production volumes and reserves. In 2014, we again expect
greater than 100 percent reserve replacement, excluding acquisitions and
divestitures.

"As part of our commitment to rigorous portfolio management integrated with
robust capital allocation, we announced plans in December to market our U.K.
and Norway businesses. Additionally, we will commence the remaining $500
million of our previously announced $1 billion share repurchase upon close of
the sale of our interest in Angola Block 31.

"I'm proud of this Company's steadfast commitment to the core values that
drive our operations around the world. We recognize that conducting our
business safely and responsibly is fundamental to protecting our license to
operate and achieving competitive returns for shareholders," Tillman added.

Reserves

Driven by strong reserves growth in the Company's U.S. resource plays,
Marathon Oil's total net proved reserves were approximately 2.2 billion boe at
the end of 2013, an increase of 8 percent from the prior year. Eighty percent
of the 2.2 billion boe were LHC and SCO; 71 percent were developed. The
Company's reserve replacement ratio, excluding dispositions of 13 million boe,
was 194 percent, with 344 million boe of net proved reserves added, while
producing 177 million boe. Including dispositions, the reserve replacement
ratio was 187 percent. The Company's finding and development cost was
approximately $16 per boe.

Net additions, including acquisitions, were driven primarily by U.S. resource
play activity in the Eagle Ford, Oklahoma resource basins and Bakken as well
as additions in Oil Sands Mining (OSM) and Norway.

Marathon Oil added a total of 298 million barrels of net proved LHC and SCO
reserves, excluding dispositions of 1 million barrels, while producing 125
million barrels, resulting in a total liquids reserve replacement ratio of 238
percent.

For the three-year period ended Dec. 31, 2013, Marathon Oil added net proved
reserves of slightly more than 1 billion boe, excluding dispositions of 13
million boe, while producing 494 million boe, resulting in a three-year
average reserve replacement ratio of 211 percent.

Estimated Net Proved Reserves
             North America E&P       International E&P       OSM     Disc.   Total   Percent
                                                                      Ops             Proved
              LHC     Natural Total   LHC     Natural Total   SCO     LHC             Developed
             (mmbbl) Gas     (mmboe) (mmbbl) Gas     (mmboe) (mmbbl) (mmbbl) (mmboe) of Total
                      (bcf)                   (bcf)
As of Dec.    475     1,043   649     408     1,736   697     653     18      2,017   72    %
31, 2012
Additions (a) 183     159     209     46      104     63      42      13      327     
Acquisitions  14      13      16      0       3       1       0       0       17      
Dispositions  (1)     (76)    (13)    0       0       0       0       0       (13)    
Production    (55)    (114)   (74)    (52)    (197)   (85)    (15)    (3)     (177)   
As of Dec.    616     1,025   787     402     1,646   676     680     28      2,171   71    %
31, 2013
Reserve
Replacement
Ratio
(including    356  %  84   %  286  %  88   %  54   %  75   %  280  %  n/a     187  %  
acquisitions
&
dispositions)
Reserve
Replacement
Ratio         358  %  151  %  304  %  88   %  54   %  75   %  280  %  n/a     194  %  
(excluding
dispositions)

(a) Additions include revisions of previous estimates.

Sales and Production Volumes

Total Company sales volumes (excluding Libya) during the fourth quarter of
2013 averaged 463,000 net boed and averaged 466,000 net boed for full-year
2013, compared to 459,000 net boed for the third quarter of 2013 and 435,000
net boed for full-year 2012.

                                         Three Months Ended  Year Ended
                                         Dec. 31  Sept. 30   Dec. 31 Dec. 31
(mboed)                                   2013     2013       2013    2012
Net Sales Volumes                                                  
North America E&P, excluding Alaska       206      200        200     151
Alaska                                    0        0          1       15
International E&P excluding Libya (a) and 195      201        207     222
Angola (b)
Oil Sands Mining (c)                      51       49         48      47
Total Continuing Operations excluding     452      450        456     435
Libya
Discontinued Operations (Angola)          11       9          10      0
Total Company excluding Libya             463      459        466     435
Libya                                     1        21         27      44
Total                                     464      480        493     479

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

(b)Angola is reflected as discontinued operations.

(c) Includes blendstocks.

                          Previous Three Month      Previous         
                          Guidance Ended            Guidance  Year Ended
                          Q4       Dec. 31 Sept. 30 Full-year Dec. 31 Dec. 31
(mboed)                    2013     2013    2013     2013      2013    2012
Net Production Available                                          
for Sale
North America E&P,                 206     200               200     151
excluding Alaska
Alaska                             0       0                 1       14
International E&P
excluding Libya (a) and            206     193               208     221
Angola (b)
Oil Sands Mining (c)               46      41                42      41
Total Continuing                   458     434               451     427
Operations excluding Libya
Discontinued Operations            11      10                9       0
(Angola)
Total Company excluding            469     444               460     427
Libya
Libya                              2       18                27      49
Total                              471     462               487     476
North America &
International E&P,         410-430  423     403      410-425   417     372
excluding Alaska and Libya
(a), plus Angola (b)
Oil Sands Mining (c)       40-45    46      41       40-44     42      41

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

(b)Angola is reflected as discontinued operations.

(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 Exploration &
Production (E&P) liftings.

Total Company production available for sale, excluding Alaska and Libya, was
459,000 net boed for full-year 2013 compared to 413,000 net boed in 2012, an
11 percent increase year over year that exceeded the Company's 8-10 percent
guidance.

North America E&P net production available for sale in the fourth quarter was
higher than the third quarter primarily because of higher volumes from the
Eagle Ford. International E&P net production available for sale (excluding
Libya) for the fourth quarter was higher than the third quarter primarily as a
result of a planned turnaround in Norway during the third quarter and improved
reliability at the non-operated Foinaven field in the U.K. during the fourth
quarter.

The Company had no oil liftings from Libya in the fourth quarter due to
ongoing third-party labor strikes at the Es Sider oil terminal. Oil liftings
have not resumed to date, and the oil terminal remains closed. Marathon Oil
has not included production from Libya in forecasts because of the uncertainty
around future production levels.

The Company is including the table below to provide guidance for the first
quarter and full-year 2014. Full-year guidance for 2014 is consistent with
that shared at the December 2013 Analyst Day.

                                                    Guidance (a) Guidance (a)
                                                    1Q           Full-Year
(mboed)                                              2014         2014
Net Production Available for Sale                                
North America E&P                                    214-223      
International E&P excluding Libya (b) and Angola (c) 186-197      
Combined North America & International E&P,                      405-435
excluding Libya (b) and Angola (c)
Oil Sands Mining (d)                                 40-45        40-50

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

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

(c)Angola is reflected as discontinued operations.

(d) Upgraded bitumen excluding blendstocks.

First quarter 2014 guidance reflects known impacts of unseasonably harsh
winter conditions in the U.S. and Canada as well as atypical winter storm
conditions in the North Sea impacting shuttle tanker off-loading.

Segment Results

Total segment income was $517 million in the fourth quarter of 2013 and $2.158
billion for the full-year 2013, compared to $616 million in the third quarter
of 2013 and $2.213 billion for full-year 2012.

                    Three Months Ended  Year Ended
                    Dec. 31  Sept. 30   Dec. 31 Dec. 31
(In millions)        2013     2013       2013    2012
Segment Income                                
North America E&P    $125     $242       $529    $382
International E&P    350      268        1,423   1,660
Oil Sands Mining     42       106        206     171
 Segment Income (a) $517     $616       $2,158  $2,213

(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 $125 million in the fourth
quarter of 2013, compared to $242 million in the third quarter of 2013. The
decrease was primarily due to lower LHC price realizations and higher
exploration expenses, partially offset by volumes growth from U.S. resource
plays. The fourth quarter of 2013 included $114 million of unproved property
impairments largely related to the Eagle Ford and Gulf of Mexico. For
full-year 2013, North America E&P segment income was $529 million, compared to
$382 million in 2012. The increase was primarily a result of higher LHC
volumes from the Eagle Ford, Bakken and Oklahoma resource basins. The increase
was partially offset by higher depreciation, depletion and amortization (DD&A)
associated with these volumes. Higher unproved property impairments and the
sale of the Company's Alaska assets in 2013 also negatively impacted income
year over year.

EAGLE FORD: Marathon Oil's production in the Eagle Ford averaged almost 90,000
net boed in the fourth quarter, an increase of 8,000 net boed from the third
quarter. For the final two weeks of 2013, production averaged greater than
100,000 net boed. Approximately 65 percent of fourth quarter net production
was crude oil/condensate, 17 percent was natural gas liquids (NGLs) and 18
percent was natural gas. Marathon Oil reached total depth on 71 gross
Company-operated wells and brought 86 gross operated wells to sales, compared
to 70 and 71 gross wells, respectively, in the third quarter. Marathon Oil's
average time to drill an Eagle Ford well, spud-to-total depth, averaged 13
days in the fourth quarter, a top-quartile performance in the areas where
Marathon Oil operates. Drilling times have improved almost 14 percent over the
year-ago quarter, while drilling and completion costs have decreased 13
percent over the same period despite increases to average lateral length,
proppant volumes and number of stages completed per well.

BAKKEN: Marathon Oil averaged approximately 40,000 net boed of production in
the Bakken during the fourth quarter, up from 38,000 net boed in the prior
quarter. The Company reached total depth on 15 gross Company-operated wells
and brought 22 gross wells to sales during the fourth quarter, compared to 21
in both categories in the third quarter. During the fourth quarter Marathon
Oil's average time to drill a Bakken well improved approximately 16 percent
compared to the year-ago quarter, averaging 15 days spud-to-total depth, a
top-quartile performance in the areas where Marathon Oil operates. Drilling
and completion costs have decreased approximately 10 percent compared to the
year-ago quarter, even as volumes of stimulation fluid and proppant have
increased. Marathon Oil's Bakken production averages approximately 90 percent
crude oil, 4 percent NGLs and 6 percent natural gas.

OKLAHOMA RESOURCE BASINS: During the fourth quarter, Marathon Oil's
unconventional Oklahoma production averaged almost 14,000 net boed and the
Company reached total depth on four gross Company-operated wells and brought
three gross wells to sales, with two wells in each category in the Southern
Mississippi Trend. In December, Marathon Oil spud an additional three wells in
the SCOOP -- two are the Company's first operated, extended-reach Woodford
wells and one is a Woodford well in the southern SCOOP. Additionally, the
Company spud its first operated horizontal Granite Wash well.

GULF OF MEXICO: In December, Marathon Oil reached a total depth of 22,655 feet
on the Company-operated Madagascar exploration well on De Soto Canyon Block
757 and did not encounter commercial hydrocarbons. The Company reduced its
working interest in the well to 40 percent prior to spud and was partially
carried on the well.

International E&P

The International E&P segment reported income of $350 million in the fourth
quarter of 2013, compared to income of $268 million in the third quarter of
2013. While pre-tax income decreased as a result of lower net sales volumes in
the fourth quarter, partially offset by lower DD&A expense, a decrease in
taxes recorded in the fourth quarter compared to the third quarter drove
after-tax segment income higher. The decrease in taxes recorded was largely
related to lower pre-tax income in higher tax jurisdictions for 2013 than was
previously projected. For full-year 2013, International E&P segment income was
$1.423 billion, compared to $1.66 billion in 2012. The decrease was primarily
a result of lower net sales volumes in Libya and Norway, lower LHC price
realizations and higher exploration expenses, partially offset by lower DD&A.

EQUATORIAL GUINEA: Net production available for sale averaged approximately
109,000 boed in the fourth quarter, compared to approximately 112,000 boed in
the third quarter of 2013. The decrease was largely attributed to a planned
turnaround at the AMPCO plant in October.

NORWAY:Net production available for sale increased to 77,000 boed for the
fourth quarter from 69,000 boed in the third quarter of 2013 as a result of a
planned turnaround in the third quarter.

U.K.: Net production available for sale increased to 20,000 boed in the fourth
quarter from 13,000 boed in the third quarter of 2013 primarily as a result of
increased reliability at the outside-operated Foinaven field and planned
maintenance on the Forties pipeline in the third quarter.

KURDISTAN REGION OF IRAQ: In December, Marathon Oil spud the Jisik-1
exploration well on the Company's operated Harir Block. The Company expects
the well to reach a projected total depth of 13,100 feet in the second quarter
of 2014. The Jisik prospect is 9 miles to the northwest of the Mirawa-1
discovery, announced in October 2013, which was drilled to a total depth of
approximately 14,000 feet and encountered multiple stacked oil and natural gas
producing zones. The Mirawa-1 well has been suspended for potential use as a
producing well. The Mirawa-2 appraisal well is expected to spud in the third
quarter of 2014, subject to government approval of the Mirawa Appraisal Plan.
Marathon Oil holds a 45 percent working interest in the Harir Block.

On the outside-operated Atrush Block, drilling continues on the Atrush-4
development well, with anticipated completion in the first quarter of 2014.
The Atrush-5 development well is expected to spud in the second quarter of
2014. Marathon Oil holds a 15 percent working interest in the Atrush Block
with first oil expected in 2015.

ETHIOPIA: The Tultule exploration well, which is approximately 2 miles from
the Sabisa-1 exploration well on the South Omo Block, reached a total depth of
6,891 feet in December. The well had minor gas shows and was plugged and
abandoned. Additionally, at least two exploration wells are planned for the
eastern side of the block in 2014 to test multiple sub-basins. The first of
those wells, Shimela-1, is expected to spud in March 2014. Marathon Oil holds
a 20 percent non-operated working interest in the South Omo Block.

KENYA: The Bahasi-1 exploration well reached total depth of 9,500 feet in
November. The well had minor gas shows and was subsequently plugged and
abandoned. The well is located on Block 9, in which Marathon Oil has a 50
percent non-operated working interest. The Sala-1 exploration well is expected
to spud in February 2014 on the eastern side of Block 9, where previous wells
drilled in the sub-basin confirmed a working petroleum system.

GABON: Evaluation of the Diaman-1B exploration well on the Diaba License
G4-223 offshore Gabon continues. Multiple other pre-salt prospects have been
identified on the license. Marathon Oil announced in August that the well had
encountered 160-180 net feet of hydrocarbon pay in the deepwater pre-salt
play. Preliminary analysis suggests 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 offshore Gabon. One of the blocks has since been
withdrawn by the government. Award of the other block is subject to government
approval and negotiation of an exploration and production sharing contract.

Oil Sands Mining

The OSM segment reported income of $42 million for the fourth quarter of 2013,
compared to $106 million in the third quarter of 2013. The decrease was
primarily a result of lower fourth quarter price realizations. For full-year
2013, OSM segment income was $206 million, compared to $171 million in 2012.
The increase was primarily a result of higher price realizations and sales
volumes.

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 fourth quarter of 2013, an after-tax unrealized gain of $6 million ($9
million pre-tax) was recorded related to these crude oil derivative
instruments, all of which had terms that ended in December 2013.

Marathon Oil and Equatorial Guinea LNG Holdings Limited, its equity method
investee, wrote off capitalized costs associated with engineering and
feasibility studies for a second liquefied natural gas (LNG) train in
Equatorial Guinea, recording an aggregate charge of $29 million ($44 million
pre-tax) in the fourth quarter of 2013.

In the fourth quarter of 2013, Marathon Oil recorded an after-tax loss of $11
million ($17 million pre-tax) on the transfer of its 45 percent working
interest and operatorship in the Safen Block in the Kurdistan Region of Iraq.

Marathon Oil recorded an after-tax settlement charge of $9 million ($13
million pre-tax) in the fourth 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 practicable following this release today, Feb. 5. The Company will
conduct a question and answer webcast/call on Thursday, Feb. 6 at 9:00 a.m.
EST. The webcast slides, associated commentary and answers to questions will
include forward-looking information. To listen to the Feb. 6 live webcast,
visit the Marathon Oil website at http://www.marathonoil.com. Replays of the
webcast will be available through March 6.

                                    # # #

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 and 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 the first table 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 the first table 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 Company's
percentage growth rate of production, production available for sale, the
percentage production growth rate in the resource plays, accelerated rig and
drilling activity in the Eagle Ford, Bakken and Oklahoma resource basins,
planned spending under the 2014 capital, investment and exploration budget,
marketing and possible sale of the U.K. and Norway businesses, reserve
replacement, exploration drilling activity, including the Gulf of Mexico,
Ethiopia, the Kurdistan Region of Iraq and Kenya, the timing of reaching total
depth on the Jisik-1 exploration well, other potential development projects,
the closing of the sales of the Company's 10 percent working interests in
Block 31 and Block 32 offshore Angola, the award of one block in Gabon 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 current
production rates referenced in this release may not be indicative of future
production rates. Factors that could potentially affect the Company's
percentage growth rate of production, production available for sale, the
percentage production growth rate in the resource plays, accelerated rig and
drilling activity in the Eagle Ford, Bakken and Oklahoma resource basins,
planned spending under the 2014 capital, investment and exploration budget,
exploration drilling activity, including the Gulf of Mexico, Ethiopia, the
Kurdistan Region of Iraq and Kenya, the timing of reaching total depth on the
Jisik-1 exploration well 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. The marketing and possible sale of the
U.K. and Norway businesses is subject to the identification of one or more
buyers, successful negotiations and execution of definitive agreements.
Expectations as to reserve replacement are based on current expectations, good
faith estimates and projections and are not guarantees of future performance.
The timing of closing the sales of the Company's 10 percent working interests
in Block 31 and Block 32 offshore Angola is subject to the satisfaction of
customary closing conditions. The closing of Block 32 is further subject to
obtaining necessary government approvals. The award of the block in Gabon is
subject to government approval and negotiation of an exploration and
production sharing contract. 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 Dec. 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.

Preliminary Consolidated Statements Three Months Ended        Year Ended
of Income (Unaudited)
                                   Dec. 31 Sept. 30 Dec. 31  Dec. 31 Dec. 31
(In millions, except per share      2013    2013     2012     2013    2012
data)
Revenues and other income:                                        
 Sales and other operating        $2,694  $3,031   $3,639   $12,419 $12,963
revenues, including related party
 Marketing revenues               485     668      492      2,082   2,729
 Income from equity method        114     114      110      423     370
investments
 Net gain (loss) on disposal of   (25)    (6)      1        (29)    127
assets
 Other income (loss)              26      19       (6)      64      32
Total revenues and other income     3,294   3,826    4,236    14,959  16,221
Costs and expenses:                                               
 Production                       593     571      623      2,331   2,199
 Marketing, including purchases   484     664      505      2,072   2,744
from related parties
 Other operating                  118     124      117      439     428
 Exploration                      242     152      234      988     706
 Depreciation, depletion and      640     719      699      2,790   2,477
amortization
 Impairments                      47      11       100      96      371
 Taxes other than income          84      91       70       352     248
 General and administrative       203     150      203      687     699
Total costs and expenses            2,411   2,482    2,551    9,755   9,872
Income from operations              883     1,344    1,685    5,204   6,349
 Net interest and other           (65)    (66)     (59)     (274)   (219)
Income from continuing operations   818     1,278    1,626    4,930   6,130
before income taxes
 Provision for income taxes       522     760      1,311    3,337   4,517
Income from continuing operations   296     518      315      1,593   1,613
Discontinued operations (a)         79      51       7        160     (31)
Net income                          $375    $569     $322     $1,753  $1,582
Adjusted net income (b)             $418    $617     $388     $1,874  $1,736
Adjustments for special items (net                                
of taxes):
Unrealized gain (loss) on crude oil 6       (39)     5        (33)    34
derivative instruments
Impairments                         (29)    0        (64)     (39)    (231)
Net gain (loss) on dispositions     (11)    0        0        (20)    72
Pension settlement                  (9)     (9)      (7)      (29)    (29)
Net income                          $375    $569     $322     $1,753  $1,582
Per Share Data                                                    
Basic:                                                            
Income from continuing operations   $0.43   $0.73    $0.45    $2.26   $2.28
Discontinued operations (a)         $0.11   $0.07    $0.01    $0.23   $(0.04)
Net income                          $0.54   $0.80    $0.46    $2.49   $2.24
Diluted:                                                          
Adjusted net income                 $0.60   $0.87    $0.55    $2.64   $2.45
Income from continuing operations   $0.43   $0.73    $0.44    $2.24   $2.27
Discontinued operations (a)         $0.11   $0.07    $0.01    $0.23   $(0.04)
Net income                          $0.54   $0.80    $0.45    $2.47   $2.23
Weighted Average Shares:                                          
Basic                               697     707      707      705     706
Diluted                             701     711      711      709     710

(a) In 2013, Marathon Oil entered into agreements to sell its Angola assets;
therefore, the Angola operations are reflected as discontinued operations in
all presented periods.

(b) 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.

Preliminary Supplemental Statistics Three Months Ended        Year Ended
(Unaudited)
                                   Dec. 31 Sept. 30 Dec. 31  Dec. 31 Dec. 31
(in millions)                       2013    2013     2012     2013    2012
Segment Income                                                    
North America E&P                   $125    $242     $101     $529    $382
International E&P                   350     268      434      1,423   1,660
Oil Sands Mining                    42      106      17       206     171
Segment income                      517     616      552      2,158   2,213
Items not allocated to segments,                                  
net of income taxes:
Corporate and unallocated           (178)   (50)     (171)    (444)   (446)
Unrealized gain (loss) on crude    6       (39)     5        (33)    34
oil derivative instruments
Impairments                         (29)    0        (64)     (39)    (231)
Net gain (loss) on dispositions     (11)    0        0        (20)    72
Pension settlement                  (9)     (9)      (7)      (29)    (29)
Income from continuing operations   296     518      315      1,593   1,613
Discontinued operations (a)         79      51       7        160     (31)
Net income                         $375    $569     $322     $1,753  $1,582
Capital Expenditures (c)                                          
North America E&P                   $943    $832     $1,101   $3,649  $3,988
International E&P                   200     208      177      754     489
Oil Sands Mining                    77      66       52       286     188
Corporate                           21      7        28       68      115
Discontinued operations (a)         54      49       95       227     351
Total                               $1,295  $1,162   $1,453   $4,984  $5,131
Exploration Expenses                                              
North America E&P                   $166    $48      $195     $725    $588
International E&P                   76      104      39       263     118
Total                               $242    $152     $234     $988    $706
Provision for Income Taxes                                        
Current income taxes                $581    $876     $1,488   $3,397  $4,741
Deferred income taxes               (59)    (116)    (177)    (60)    (224)
Total                               $522    $760     $1,311   $3,337  $4,517

(c) Capital expenditures include changes in accruals.

Preliminary Supplemental Statistics Three Months Ended        Year Ended
(Unaudited)
                                   Dec. 31 Sept. 30 Dec. 31  Dec. 31 Dec. 31
                                   2013    2013     2012     2013    2012
North America E&P - Net Sales                                     
Volumes
Liquid Hydrocarbons (mbbld)         156     150      133      149     107
 Bakken                         38      36       33       37      28
 Eagle Ford                     73      66       47       65      28
Oklahoma resource basins            6       7        4        6       3
 Other North America            39      41       49       41      48
 Crude Oil and Condensate (mbbld)  132     126      117      126     96
 Bakken                         36      34       32       35      27
 Eagle Ford                     58      52       38       51      23
Oklahoma resource basins            2       2        1        2       1
 Other North America            36      38       46       38      45
 Natural Gas Liquids (mbbld)       24      24       16       23      11
 Bakken                         2       2        1        2       1
 Eagle Ford                     15      14       9        14      5
Oklahoma resource basins            4       5        3        4       2
 Other North America            3       3        3        3       3
 Natural Gas (mmcfd)               297     297      404      312     358
 Bakken                         13      12       10       13      8
 Eagle Ford                     100     93       72       94      37
Oklahoma resource basins            48      47       42       48      32
 Alaska                         0       0        100      7       92
 Other North America            136     145      180      150     189
International E&P - Net Sales                                     
Volumes
Liquid Hydrocarbons (mbbld)         106     129      191      144     175
 Equatorial Guinea              35      32       33       34      36
 Norway                         64      61       79       71      81
 United Kingdom                    7       20       20       15      16
 Libya                          0       16       59       24      42
 Natural Gas (mmcfd)               543     562      569      547     544
 Equatorial Guinea              455     463      445      442     428
 Norway                         53      43       54       51      53
 United Kingdom (d)             28      26       44       32      48
 Libya                          7       30       26       22      15
Oil Sands Mining - Net Sales                                      
Volumes
Synthetic Crude Oil (mbbld) (e)     51      49       48       48      47
                                                                 
Total Continuing Operations - Net   453     471      534      483     479
Sales Volumes (mboed)
Discontinued Operations - Net Sales 11      9        0        10      0
Volumes (mboed)(a)
Total Company - Net Sales Volumes   464     480      534      493     479
(mboed)
Net Sales Volumes of Equity Method                                
Investees (mtd)
 LNG                            6,282   7,302    6,327    6,548   6,290
 Methanol                       1,250   1,364    1,465    1,249   1,298

(d) Includes natural gas acquired for injection and subsequent resale of 6
mmcfd, 4 mmcfd, 12 mmcfd, 7 mmcfd, and 15 mmcfd in the fourth and third
quarters of 2013, the fourth quarter of 2012, and full-year 2013 and 2012,
respectively.

(e)Includes blendstocks.

Preliminary Supplemental Statistics Three Months Ended        Year Ended
(Unaudited)
                                   Dec. 31 Sept. 30 Dec. 31  Dec. 31 Dec. 31
                                   2013    2013     2012     2013    2012
North America E&P - Average                                       
Realizations (f)
Liquid Hydrocarbons ($ per bbl) (g) $79.93  $90.49   $83.02   $85.20  $85.80
 Bakken                         81.61   95.24    79.88    87.76   81.36
 Eagle Ford                     80.71   87.96    85.26    84.95   88.09
Oklahoma resource basins            51.56   51.34    48.03    50.77   49.21
Other North America                 81.28   97.12    85.53    88.16   89.03
 Crude Oil and Condensate ($ per   $87.61  $101.05  $89.72   $94.19  $91.30
bbl)
 Bakken                         83.70   97.76    81.69    90.25   83.11
 Eagle Ford                     92.84   104.08   98.68    99.69   100.14
Oklahoma resource basins            94.97   101.82   83.98    94.84   89.26
Other North America                 82.86   99.93    87.92    90.42   91.75
 Natural Gas Liquids ($ per bbl)   $38.03  $35.01   $35.29   $35.12  $39.57
 Bakken                         45.10   44.08    41.15    41.60   42.35
 Eagle Ford                     33.70   30.11    30.23    30.16   32.96
Oklahoma resource basins            36.29   35.11    33.31    35.28   31.82
Other North America                 59.62   55.81    49.62    55.69   52.51
 Natural Gas ($ per mcf)           $3.76   $3.51    $4.39    $3.84   $3.92
 Bakken                         3.80    3.73     3.50     3.90    3.11
 Eagle Ford                     3.57    3.53     3.38     3.67    3.03
Oklahoma resource basins            3.74    3.10     4.24     3.78    3.05
 Alaska                         0.00    0.00     7.15     7.79    6.86
Other North America                 3.91    3.65     3.35     3.76    2.84
International E&P- Average                                        
Realizations (f)
Liquid Hydrocarbons ($ per bbl)     $97.44  $101.30  $108.01  $102.10 $107.78
 Equatorial Guinea              62.60   57.35    58.12    60.34   64.33
 Norway                         114.33  115.45   114.64   113.38  116.70
 United Kingdom                 115.25  108.34   109.04   108.92  107.31
 Libya                          0.00    124.19   126.70   122.92  127.31
 Natural Gas ($ per mcf)           $2.14   $1.95    $2.46    $2.25   $2.29
 Equatorial Guinea (h)          0.24    0.24     0.24     0.24    0.24
 Norway                         13.56   12.17    12.74    13.01   11.15
 United Kingdom                 10.21   10.67    10.62    10.64   9.72
 Libya                          7.38    5.92     5.19     5.44    5.76
Oil Sands Mining - Average                                        
Realizations (f)
Synthetic Crude Oil ($ per bbl)     $78.77  $102.64  $76.36   $87.51  $81.72
                                                                 
Discontinued Operations - Average   $105.43 $107.01  $0.00    $104.77 $0.00
Realizations ($ per bbl)(a)

(f)Excludes gains or losses on derivative instruments.

(g)Inclusion of realized gains (losses) on crude oil derivative instruments
would have increased (decreased) North America E&P average liquid hydrocarbon
realizations by $(0.18) per bbl, $(1.81) per bbl, and $1.27 per bbl for the
fourth and third quarters of 2013 and the fourth quarter of 2012, and by
$(0.27) per bbl and $0.40 per bbl for full-year 2013 and 2012.

(h)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
 
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