Marathon Oil Corporation Reports First Quarter 2014 Results

Marathon Oil Corporation Reports First Quarter 2014 Results

HOUSTON, May 6, 2014 (GLOBE NEWSWIRE) -- Marathon Oil Corporation (NYSE:MRO)
today reported first quarter of 2014 adjusted net income was $613 million, or
$0.88 per diluted share, compared to adjusted net income in the first quarter
of 2013 of $361 million, or $0.51 per diluted share. For the first quarter of
2014, net income was $1.149 billion, or $1.65 per diluted share, compared to
net income in the first quarter of 2013 of $383 million, or $0.54 per diluted
share.

Key Quarterly Highlights

•Adjusted net income per diluted share increased to $0.88, up 73% from
year-ago quarter

 --Adjusted net income increased to $613 million, up 70% from year-ago
quarter

•Three high-quality U.S. resource plays averaged net production of 154,000
boed, up 26% from year-ago quarter

 -- Eagle Ford downspacing results continued to consistently outperform
modeled type curves

 -- Austin Chalk and Eagle Ford co-development continuing on plan with
completion of first 2014 Austin Chalk well at a 30-day IP rate of 1,600 boed

 -- Bakken and Three Forks co-development progressing with high density
pilots delivering strong results; testing eight wells per 1,280-acre drilling
spacing unit

 -- Bakken re-completions program delivered five wells with initial
24-hour and 30-day IP rates exceeding expectations

 -- SCOOP extended-reach (XL) wells delivering strong results with two
wells at 30-day IP rates of up to 1,550 boed

•Recorded 97% average operational availability for Company-operated assets

•Marketing of North Sea businesses on schedule; bids due in second quarter

•Closed on sales of Angola Blocks 31 and 32 for aggregate cash proceeds of
approximately $2 billion, resulting in after-tax gain of $576 million, or
$0.83 per diluted share

•Completed second phase of $1 billion share repurchase; initiated and
substantially completed additional $500 million share repurchase

                                                           Three Months Ended
                                                           Mar. 31   Mar. 31
(In millions, except per diluted share data)                2014      2013
Adjusted net income (a)                                     $613      $361
Adjustments for special items (net of taxes):                        
Net gain on dispositions                                    576       64
Pension settlement                                          (40)      0
Unrealized loss on crude oil derivative instruments         0         (32)
Impairments                                                 0         (10)
Net income                                                  $1,149    $383
Adjusted net income - per diluted share (a)                 $0.88     $0.51
Net income - per diluted share                              $1.65     $0.54
Income from continuing operations - per diluted share (b)   $0.77     $0.54
Revenues and other income (b)                               $3,529    $4,020
Weighted average shares - diluted                           696       712
Exploration expenses                                                 
Unproved property impairments                               $41       $383
Dry well costs                                              2         21
Geological and geophysical                                  11        28
Other                                                       22        31
Total exploration expenses                                  $76       $463
Cash flow                                                            
Cash flow from continuing operations before changes in      $1,350    $1,552
working capital (c)
Changes in working capital for continuing operations        42        (49 )
Cash flow from discontinued operations                      78        25
Cash flow from operations                                   $1,470    $1,528

(a) Adjusted net income and adjusted net income per diluted share are
non-GAAP financial measures and should not be considered substitutes for net
income and net income per diluted share as determined in accordance with
accounting principles generally accepted in the United States. See below for
further discussion of adjusted net income and adjusted net income per diluted
share.

(b)In the first quarter of 2014, Marathon Oil closed the sale of its Angola
assets; the Angola business is reflected as discontinued operations in all
presented periods.

(c) Cash flow from continuing 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 continuing operations before changes in working
capital.

"Marathon Oil delivered strong financial results in the first quarter of 2014
underpinned by continued production growth across our U.S. resource plays
coupled with strong price realizations and lower exploration costs," said Lee
M. Tillman, Marathon Oil's president and CEO. "Importantly, we've already
advanced the three key priorities of our 2014 agenda -- ramping up U.S.
resource play drilling activity, marketing our North Sea businesses and
delivering shareholder value through opportunistic share repurchases.

"With strong execution, we remain confident in our plans to grow production
from our three U.S. resource plays by 30 percent in 2014 over 2013. The
combination of downspacing with improved completion productivity has
consistently improved our well results. Across the resource plays we continue
to aggressively pursue co-development opportunities for the Austin Chalk in
the Eagle Ford, Three Forks in the Bakken and vertically stacked horizons in
Oklahoma.

"Marathon Oil is committed to rigorous portfolio management to simplify and
concentrate our portfolio toward higher-growth and higher-margin
opportunities. This quarter we closed on the sales of our interests in Angola
Blocks 31 and 32, and opened the data room for the marketing of our U.K. and
Norway North Sea businesses with bids due in the second quarter.

"The Company has completed the previously announced $1 billion share
repurchase tied to the Angola Block 31 sale representing 29 million shares. In
March we announced an additional $500 million share repurchase, which is now
substantially complete, further demonstrating our commitment to shareholder
value while exercising capital discipline. Upon completion of this additional
share repurchase there will be $1.5 billion remaining on our share repurchase
authorization.

"The investment case for Marathon Oil remains sound and is predicated on
demonstrated execution, profitable volumes growth, rigorous portfolio
management and disciplined capital allocation -- all combining to deliver
competitive long-term shareholder value," Tillman said.

Sales and Production Volumes

Total Company sales volumes from continuing operations (excluding Libya and
Alaska) during the first quarter of 2014 averaged 457,000 net barrels of oil
equivalent per day (boed) compared to 471,000 net boed for the first quarter
of 2013.

                                                    Three Months Ended
                                                    Mar. 31   Mar. 31
(mboed)                                              2014      2013
Net Sales Volumes                                             
North America E&P, excluding Alaska                  213       193
Alaska                                               0         5
International E&P excluding Libya (a) and Angola (b) 197       227
Oil Sands Mining (c)                                 47        51
Total Continuing Operations excluding Libya          457       476
Discontinued Operations (Angola)                     6         9
Total Company excluding Libya                        463       485
Libya                                                0         38
Total                                                463       523

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

(b)Angola is reflected as discontinued operations.

(c) Includes blendstocks.

                                              Three Months Ended Guidance (a)
                                              Mar. 31   Mar. 31  Q2
(mboed)                                        2014      2013     2014
Net Production Available for Sale                               
North America E&P, excluding Alaska            213       193      220-230
Alaska                                         0         5        
International E&P excluding Libya (b) and      190       222      182-192
Angola (c)
Oil Sands Mining (d)                           37        44       37-42
Total Continuing Operations excluding Libya    440       464      
Discontinued Operations (Angola)               6         6        
Total Company excluding Libya                  446       470      
Libya                                          2         46       
Total                                          448       516      

(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.

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

First quarter of 2014 production available for sale from continuing operations
(excluding Libya) averaged 440,000 net boed, compared to the first quarter of
2013 average of 464,000 net boed. First quarter of 2014 production available
for sale was impacted by an estimated 6,000 net boed by extreme winter weather
and by an estimated 14,000 net boed by lower reliability on non-operated
assets.

North America E&P production available for sale (excluding Alaska) in the
first quarter of 2014 was higher compared to the first quarter of 2013 as a
result of continued growth across the three resource plays, partly offset by
the cessation of production from Company-operated wells in the Powder River
Basin in Wyoming as well as natural decline in Gulf of Mexico production.
Extreme winter weather impacts on availability and completion operations
negatively impacted production available for sale.

International E&P production available for sale (excluding Libya and Angola)
for the first quarter of 2014 benefited from high operational availability
from operated assets. It was lower compared to the first quarter of 2013
primarily as a result of significant unplanned downtime at the non-operated
Foinaven field in the U.K. and the AMPCO methanol plant in Equatorial Guinea,
as well as natural decline from North Sea assets and production curtailments
at Alvheim in Norway due to severe winter weather.

Oil Sands Mining (OSM) production available for sale for the first quarter of
2014 was lower than the first quarter of 2013 primarily as a result of lower
mine reliability and nine days of planned mine maintenance.

The Company had no oil liftings from Libya in the first quarter of 2014 as a
result of ongoing third-party labor strikes at the Es Sider oil terminal.
Despite reported progress at other terminals, the Es Sider oil terminal
remains closed. Marathon Oil has not included production from Libya in
forecasts because of the uncertainty around future production levels.

For the second quarter of 2014, the Company continues to expect growth from
North America E&P production available for sale, driven by activity across the
U.S. resource plays. International E&P production available for sale is
expected to remain essentially flat in the second quarter as a result of
continued reliability issues and a planned turnaround at the outside-operated
Foinaven field and a planned turnaround at Brae in the U.K. OSM production
guidance also reflects a planned turnaround during the second quarter.

Segment Results

Total segment income was $637 million in the first quarter of 2014, compared
to $433 million in the first quarter of 2013.

                     Three Months Ended
                     Mar. 31   Mar. 31
(In millions)         2014      2013
Segment Income (Loss)          
North America E&P     $242      $(59)
International E&P     331       454
Oil Sands Mining      64        38
 Segment Income (a)  $637      $433

(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 first
quarter of 2014, compared to a loss of $59 million in the first quarter of
2013. The increase is primarily due to lower exploration expenses and higher
net sales volumes from the U.S. resource plays. In the first quarter of 2014
exploration expenses were $57 million, compared to $435 million in the
year-ago quarter primarily related to unproved property impairments.

EAGLE FORD: Marathon Oil's production in the Eagle Ford averaged 96,000 net
boed in the first quarter of 2014, an increase of 33 percent over the year-ago
average and 7 percent over the previous quarter. Approximately 65 percent of
first quarter net production was crude oil/condensate, 17 percent was natural
gas liquids (NGLs) and 18 percent was natural gas. Individual well results
were strong during the quarter and continued to consistently outperform the
modeled type curves. With the transition to higher density pad drilling --
from an average of three to four wells per pad -- coupled with a period of
rebuilding uncompleted well inventory, the number of wells brought to sales
was lower compared to the previous quarter. Marathon Oil reached total depth
on 83 gross Company-operated wells and brought 49 gross operated wells to
sales in the first quarter, compared to 71 and 86 gross wells respectively in
the fourth quarter of 2013. The Company ended March with 22 gross wells
awaiting completions. The Company's average time to drill an Eagle Ford well
in the first quarter of 2014, spud-to-total depth, averaged 14 days which
reflected the addition and ramp up of three new rigs and an increased number
of wells with longer laterals. Marathon Oil continues to target an average of
11 days spud-to-total depth for 2014.

The Company continued to progress co-development opportunities in the Austin
Chalk. In early April Marathon Oil brought online an Austin Chalk appraisal
well, the Children Weston 4H, with a 30-day initial production (IP) rate of
1,600 boed (76 percent liquids) constrained at a 16/64-inch choke. This is the
sixth Austin Chalk producer and continues the further appraisal of full Austin
Chalk potential. Two additional Austin Chalk wells are waiting on completion
and three more pilot groups, with a total of six Austin Chalk wells, are
currently drilling.

BAKKEN: Marathon Oil averaged approximately 43,000 net boed of production in
the Bakken during the first quarter of 2014, an increase of 16 percent over
the year-ago average and 7 percent over the previous quarter. The Company's
Bakken production averages 90 percent crude oil, 4 percent NGLs and 6 percent
natural gas. The Company reached total depth on 16 gross Company-operated
wells and brought 15 gross operated wells to sales in the first quarter,
compared to 15 and 22 gross wells respectively in the fourth quarter of 2013.
The Company's average time to drill a Bakken well, spud-to-total depth,
averaged 18 days in the first quarter. Both drilling and completion activities
were impacted by extraordinary winter weather. The Company recompleted five
wells during the first quarter of 2014 with favorable results in the Myrmidon
area and has recently expanded south into the Hector area. High density pilots
continue to test 320-acre spacing for co-development with four Middle Bakken
and four Three Forks wells per 1,280-acre spacing unit. Further high density
pilots with up to 12 wells per 1,280-acre spacing unit are planned by year-end
2014.

OKLAHOMA RESOURCE BASINS: The Company's unconventional Oklahoma production
averaged 15,000 net boed during the first quarter of 2014, an increase of 15
percent over the year-ago average and 7 percent over the previous quarter.
Importantly, liquids volumes have increased approximately 28 percent compared
to the year-ago quarter. During the first quarter, the Company reached total
depth on five gross Company-operated wells and brought four gross SCOOP wells
to sales. The 30-day IP rates for the two SCOOP XL wells were 990 boed (70
percent liquids) and 1,550 boed (66 percent liquids) respectively. Marathon
Oil has accumulated more than 100,000 net acres in the SCOOP area. The Company
continued to test other horizons in Oklahoma with two operated wells producing
in the Southern Mississippi Trend and the first of two Granite Wash horizontal
wells on line. Two additional wells in the Southern Mississippi Trend are
scheduled to spud in the second quarter of 2014.

GULF OF MEXICO: The Key Largo prospect, located on Walker Ridge Block 578, is
anticipated to spud in the third quarter as the first well with the new-build
deepwater drillship. Marathon Oil is operator and holds a 60 percent working
interest in the prospect.

The second appraisal well on the outside-operated Shenandoah prospect is
expected to be spud in the second quarter of 2014. The well will be located on
Walker Ridge Block 51, in which Marathon Oil holds a 10 percent working
interest.

The Company has farmed into the Perseus prospect located on Desoto Canyon
Blocks 143, 187, 188, 230 and 231. A well is anticipated to spud in the second
half of 2014. Marathon Oil holds a 30 percent non-operated working interest.

International E&P

The International E&P segment reported income of $331 million in the first
quarter of 2014, compared to segment income of $454 million in the first
quarter of 2013. The decrease is primarily a result of lower net sales volumes
in Libya, Norway and the U.K., partially offset by reduced depreciation,
depletion and amortization (DD&A) associated with these lower volumes and
lower taxes, primarily in Libya. Production expenses were higher by
approximately $60 million due primarily to planned workover activity in
Norway.

EQUATORIAL GUINEA: Production available for sale averaged 105,000 net boed in
the first quarter of 2014, compared to 110,000 net boed in the first quarter
of 2013. During the quarter work was completed on scheduled offshore riser
repairs, an unplanned repair at the methanol plant, as well as a planned 8-day
partial shut-down at the liquefied natural gas (LNG) plant, which was
accomplished ahead of schedule and under budget.

NORWAY:Production available for sale averaged 69,000 net boed for the first
quarter of 2014 compared to 86,500 net boed in the first quarter of 2013
primarily as a result of natural decline. Alvheim was also impacted in the
first quarter of 2014 by severe winter weather which resulted in eight days of
curtailed production.

U.K.: Production available for sale averaged 16,000 net boed in the first
quarter of 2014 compared to 26,000 net boed in the first quarter of 2013
primarily as a result of reliability issues at the outside-operated Foinaven
field, as well as natural decline and a delayed reinstatement of gas
compression at Brae. The reliability issues at Foinaven continue into the
second quarter and will impact production available for sale and the timing of
future liftings. Additionally, a planned turnaround at Foinaven is expected to
begin in the second quarter and extend into the third quarter of 2014.

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. Following the successful 2013 Mirawa-1 discovery, the Mirawa-2
appraisal well is expected to spud in the third quarter of 2014. Marathon Oil
holds a 45 percent working interest in the Harir Block.

On the outside-operated Atrush Block, the Atrush-4 development well reached
total depth in January. Well testing was completed in April and the well has
been suspended as a producer. The Chiya Khere-5 development well (formerly
Atrush-5), included in the previously approved Atrush development plan, 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.

KENYA: The Sala-1 exploration well was spud in February 2014 on the eastern
side of Block 9, where previous wells drilled in the sub-basin confirmed a
working petroleum system. The Company expects the well to reach a total depth
of approximately 11,300 feet in the second quarter. Marathon Oil has a 50
percent non-operated working interest in Block 9 with the option to operate
any commercial development.

ETHIOPIA: The Shimela-1 exploration well was spud in March. The well is
expected to reach a total depth of 8,850 feet in the second quarter. Marathon
Oil holds a 20 percent non-operated working interest in the South Omo Block.

The Company increased its acreage in Ethiopia through a farm-in to the Rift
Basin Area Block with 10.5 million gross acres. Marathon Oil holds a 50
percent working interest in the block with the option to operate if a
discovery is made.

GABON: In late October 2013, the Company was the high bidder as operator of
the G13 deepwater block in the pre-salt play offshore Gabon. Marathon Oil has
received a Model Production Sharing Contract (PSC) from the Gabonese
Government and negotiations toward a final PSC are ongoing. Award of the block
is subject to government approval.

Oil Sands Mining

The OSM segment reported income of $64 million for the first quarter of 2014,
compared to $38 million in the first quarter of 2013. The increase was
primarily a result of lower contract services and contract labor in the first
quarter of 2014 and higher turnaround costs in the same quarter of 2013. The
impact of higher price realizations in the first quarter of 2014 was mostly
offset by lower net sales volumes due to reliability issues at both mines.

Corporate and Other

In the first quarter of 2014, Marathon Oil acquired 16 million common shares
at a cost of approximately $550 million under the share repurchase program.
The additional $500 million share repurchase phase announced in March is
substantially complete. Upon completion, there will be $1.5 billion remaining
on the Company's share repurchase authorization.

Special Items

In the first quarter of 2014, Marathon Oil sold its interests in Angola Blocks
31 and 32 for aggregate cash proceeds of approximately $2 billion, which
resulted in a net after-tax gain of $576 million.

Marathon Oil recorded an after-tax settlement charge of $40 million ($63
million pre-tax) in the first quarter of 2014 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, May 6. The Company will
conduct a question and answer webcast/call on Wednesday, May 7 at 9:00 a.m.
EDT. The webcast slides, associated commentary and answers to questions will
include forward-looking information. To listen to the May 7 live webcast,
visit the Marathon Oil website at http://www.marathonoil.com. Replays of the
webcast will be available through June 6.

                                    # # #

In addition to net income and net income per diluted share determined in
accordance with generally accepted accounting principles (GAAP), Marathon Oil
has provided supplementally "adjusted net income" and "adjusted net income per
diluted share," non-GAAP financial measures which facilitate 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 the first
table of this release. "Adjusted net income" and "adjusted net income per
diluted share" should not be considered substitutes for net income and net
income per diluted share 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 continuing 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 continuing operations
before changes in working capital" is provided in the first table of this
release. "Cash flow from continuing 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 continuing operations before changes in working capital"
to evaluate Marathon Oil's financial performance between periods. Management
also uses "cash flow from continuing operations before changes in working
capital" to compare Marathon Oil's performance to certain competitors.

This release contains forward-looking statements with respect to production
available for sale, the percentage growth rate of production in the U.S.
resource plays, future drilling plans, exploration drilling activity in the
Gulf of Mexico, the Kurdistan Region of Iraq, Kenya and Ethiopia, the timing
of first production for the Atrush Block, the award of one block in Gabon,
planned turnarounds at Foinaven, Brae and OSM, the possible sale of the U.K.
and Norway North Sea businesses, and the common stock repurchase program. The
average number of days to drill a well and expectations as to the future
average number of days to drill a well referenced in this release may not be
indicative of future actual results. The initial or current production rates
referenced in this release may not be indicative of future production rates.
Factors that could potentially affect production available for sale, the
percentage growth rate of production in the U.S. resource plays, future
drilling plans, exploration drilling activity in the Gulf of Mexico, the
Kurdistan Region of Iraq, Kenya and Ethiopia, and the timing of first
production for the Atrush Block 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 award of the
block in Gabon is subject to government approval and negotiation of an
exploration and production sharing contract. The planned turnarounds at
Foinaven, Brae and OSM are based on current expectations and good faith
projections and are not a guarantee of future performance. The possible sale
of the U.K. and Norway North Sea businesses is subject to the identification
of one or more buyers, board approval, successful negotiations, and execution
of definitive agreements. 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,
2013, 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
                                                      Mar. 31 Dec. 31 Mar. 31
(In millions, except per share data)                   2014    2013    2013
Revenues and other income:                                           
 Sales and other operating revenues, including       $2,830  $2,694  $3,354
related party
 Marketing revenues                                  540     485     430
 Income from equity method investments               137     114     118
 Net gain (loss) on disposal of assets               2       (25)    109
 Other income                                        20      26      9
Total revenues and other income                        3,529   3,294   4,020
Costs and expenses:                                                  
 Production                                          613     593     564
 Marketing, including purchases from related parties 540     484     429
 Other operating                                     114     118     111
 Exploration                                         76      242     463
 Depreciation, depletion and amortization            697     640     720
 Impairments                                         17      47      38
 Taxes other than income                             98      84      84
 General and administrative                          192     203     172
Total costs and expenses                               2,347   2,411   2,581
Income from operations                                 1,182   883     1,439
 Net interest and other                              (52)    (65)    (72)
Income from continuing operations before income taxes  1,130   818     1,367
 Provision for income taxes                          590     522     987
Income from continuing operations                      540     296     380
Discontinued operations (a)                            609     79      3
Net income                                             $1,149  $375    $383
Adjusted net income (b)                                $613    $418    $361
Adjustments for special items (net of taxes):                        
Net gain (loss) on dispositions                        576     (11)    64
Pension settlement                                     (40)    (9)     0
Unrealized gain (loss) on crude oil derivative         0       6       (32)
instruments
Impairments                                            0       (29)    (10)
Net income                                             $1,149  $375    $383
Per Share Data                                                       
Basic:                                                               
Income from continuing operations                      $0.78   $0.43   $0.54
Discontinued operations (a)                            $0.88   $0.11   $0.00
Net income                                             $1.66   $0.54   $0.54
Diluted:                                                             
Adjusted net income (b)                                $0.88   $0.60   $0.51
Income from continuing operations                      $0.77   $0.43   $0.54
Discontinued operations (a)                            $0.88   $0.11   $0.00
Net income                                             $1.65   $0.54   $0.54
Weighted Average Shares:                                             
Basic                                                  693     697     708
Diluted                                                696     701     712

(a)In the first quarter of 2014, Marathon Oil closed the sale of its Angola
assets; the Angola business is reflected as discontinued operations in all
presented periods.

(b) Adjusted net income and adjusted net income per diluted share are non-GAAP
financial measures and should not be considered substitutes for net income and
net income per diluted share as determined in accordance with accounting
principles generally accepted in the United States. See above for further
discussion of adjusted net income and adjusted net income per diluted share.

Supplemental Statistics (Unaudited)                    Three Months Ended
                                                      Mar. 31 Dec. 31 Mar. 31
(in millions)                                          2014    2013    2013
Segment Income (Loss)                                                
North America E&P                                      $242    $125    $(59)
International E&P                                      331     350     454
Oil Sands Mining                                       64      42      38
Segment income                                         637     517     433
Items not allocated to segments, net of income taxes:                
Corporate and unallocated                              (57)    (178)   (75)
Net gain (loss) on dispositions                        0       (11)    64
Pension settlement                                     (40)    (9)     0
Unrealized gain (loss) on crude oil derivative        0       6       (32)
instruments
Impairments                                            0       (29)    (10)
Income from continuing operations                      540     296     380
Discontinued operations (a)                            609     79      3
Net income                                            $1,149  $375    $383
Capital Expenditures (c)                                             
North America E&P                                      $867    $943    $970
International E&P                                      171     210     171
Oil Sands Mining                                       68      77      45
Discontinued Operations (a)                            44      54      54
Corporate                                              3       11      30
Total                                                  $1,153  $1,295  $1,270
Exploration Expenses                                                 
North America E&P                                      $57     $166    $435
International E&P                                      19      76      28
Total                                                  $76     $242    $463
Provision for Income Taxes                                           
Current income taxes                                   $485    $581    $942
Deferred income taxes                                  105     (59)    45
Total                                                  $590    $522    $987

(c) Capital expenditures include changes in accruals.

Supplemental Statistics (Unaudited)                    Three Months Ended
                                                      Mar. 31 Dec. 31 Mar. 31
                                                      2014    2013    2013
North America E&P - Net Sales Volumes                                
Liquid Hydrocarbons (mbbld)                            163     156     141
 Bakken                                            40      38      35
 Eagle Ford                                        78      73      58
Oklahoma resource basins                               6       6       5
 Other North America                               39      39      43
 Crude Oil and Condensate (mbbld)                     138     132     121
 Bakken                                            38      36      33
 Eagle Ford                                        62      58      46
Oklahoma resource basins                               2       2       1
 Other North America                               36      36      41
 Natural Gas Liquids (mbbld)                          25      24      20
 Bakken                                            2       2       2
 Eagle Ford                                        16      15      12
Oklahoma resource basins                               4       4       4
 Other North America                               3       3       2
 Natural Gas (mmcfd)                                  300     297     340
 Bakken                                            16      13      13
 Eagle Ford                                        107     100     83
Oklahoma resource basins                               54      48      50
 Alaska                                            0       0       31
 Other North America                               123     136     163
International E&P - Net Sales Volumes                                
Liquid Hydrocarbons (mbbld)                            110     106     171
 Equatorial Guinea                                 35      35      37
 Norway                                            62      64      79
 United Kingdom                                       13      7       21
 Libya                                             0       0       34
 Natural Gas (mmcfd)                                  518     543     568
 Equatorial Guinea                                 435     455     447
 Norway                                            50      53      54
 United Kingdom (d)                                30      28      41
 Libya                                             3       7       26
Oil Sands Mining - Net Sales Volumes                                 
Synthetic Crude Oil (mbbld) (e)                        47      51      51
                                                                    
Total Continuing Operations - Net Sales Volumes        457     453     514
(mboed)
Discontinued Operations - Net Sales Volumes (mboed)(a) 6       11      9
Total Company - Net Sales Volumes (mboed)              463     464     523
Net Sales Volumes of Equity Method Investees (mtd)                   
 LNG                                               6,579   6,282   6,787
 Methanol                                          1,153   1,250   1,410

(d) Includes natural gas acquired for injection and subsequent resale of 7
mmcfd, 6 mmcfd and 11 mmcfd in the first quarter of 2014 and in the fourth and
first quarters of 2013, respectively.

(e) Includes blendstocks.

Supplemental Statistics (Unaudited)                    Three Months Ended
                                                      Mar. 31 Dec. 31 Mar. 31
                                                      2014    2013    2013
North America E&P - Average Price Realizations (f)                   
Liquid Hydrocarbons ($ per bbl) (g)                    $84.79  $79.93  $86.14
 Bakken                                            87.60   81.61   88.60
 Eagle Ford                                        84.16   80.71   88.06
Oklahoma resource basins                               58.75   51.56   52.86
Other North America                                    87.40   81.28   85.41
 Crude Oil and Condensate ($ per bbl)                 $92.48  $87.61  $94.68
 Bakken                                            89.46   83.70   91.22
 Eagle Ford                                        96.10   92.84   103.78
Oklahoma resource basins                               94.38   94.97   90.07
Other North America                                    89.25   82.86   87.30
 Natural Gas Liquids ($ per bbl)                      $43.11  $38.03  $35.48
 Bakken                                            57.62   45.10   41.05
 Eagle Ford                                        37.50   33.70   28.16
Oklahoma resource basins                               44.58   36.29   41.27
Other North America                                    61.83   59.62   56.58
 Natural Gas ($ per mcf)                              $5.28   $3.76   $3.86
 Bakken                                            8.41    3.80    3.61
 Eagle Ford                                        4.89    3.57    3.35
Oklahoma resource basins                               5.50    3.74    3.56
 Alaska                                            0.00    0.00    7.90
Other North America                                    5.10    3.91    3.49
International E&P- Average Price Realizations (f)                    
Liquid Hydrocarbons ($ per bbl)                        $96.49  $97.44  $107.79
 Equatorial Guinea                                 62.37   62.60   65.89
 Norway                                            112.94  114.33  117.13
 United Kingdom                                    109.53  115.25  112.25
 Libya                                             0.00    0.00    129.56
 Natural Gas ($ per mcf)                              $1.98   $2.14   $2.57
 Equatorial Guinea (h)                             0.24    0.24    0.24
 Norway                                            12.01   13.56   14.00
 United Kingdom                                    10.02   10.21   11.27
 Libya                                             6.65    7.38    5.04
Oil Sands Mining - Average Price Realizations (f)                    
Synthetic Crude Oil ($ per bbl)                        $88.50  $78.77  $79.98
                                                                    
Discontinued Operations - Average Realizations ($ per  $99.82  $105.43 $105.95
bbl)(a)

(f) Excludes gains or losses on derivative instruments.

(g) There were no open crude oil derivative instruments in the first quarter
of 2014. Inclusion of realized losses on crude oil derivative instruments
would have decreased North America E&P average liquid hydrocarbon price
realizations by $0.18 per bbl and $0.31 per bbl for the fourth and first
quarters of 2013.

(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:
         Chris Phillips: 713-296-3213
 
Press spacebar to pause and continue. Press esc to stop.