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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Marathon Oil Corp | NYSE:MRO | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.95 | -3.54% | 25.90 | 26.8192 | 25.87 | 26.74 | 11,480,519 | 00:51:51 |
(Mark One)
|
|
|
[X]
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
For the Quarterly Period Ended March 31, 2019
|
|
[ ]
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
For the transition period from _____ to _____
|
|
Delaware
|
|
25-0996816
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
Title of each class
|
|
Trading Symbol
|
|
Name of each exchange on which registered
|
Common Stock, par value $1.00
|
|
MRO
|
|
New York Stock Exchange
|
|
Large accelerated filer
þ
|
Accelerated filer
o
|
Non-accelerated filer
o
|
|
|
|
Smaller reporting company
o
|
Emerging growth company
o
|
|
|
Table of Contents
|
|
|
|
Page
|
|
||
|
||
|
||
|
||
|
||
|
||
|
|
|
|
||
|
||
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
(In millions, except per share data)
|
2019
|
|
2018
|
||||
Revenues and other income:
|
|
|
|
||||
Revenues from contracts with customers
|
$
|
1,200
|
|
|
$
|
1,537
|
|
Net loss on commodity derivatives
|
(91
|
)
|
|
(102
|
)
|
||
Income from equity method investments
|
11
|
|
|
37
|
|
||
Net gain on disposal of assets
|
42
|
|
|
257
|
|
||
Other income
|
35
|
|
|
4
|
|
||
Total revenues and other income
|
1,197
|
|
|
1,733
|
|
||
Costs and expenses:
|
|
|
|
|
|||
Production
|
187
|
|
|
217
|
|
||
Shipping, handling and other operating
|
154
|
|
|
130
|
|
||
Exploration
|
59
|
|
|
52
|
|
||
Depreciation, depletion and amortization
|
554
|
|
|
590
|
|
||
Impairments
|
6
|
|
|
8
|
|
||
Taxes other than income
|
72
|
|
|
64
|
|
||
General and administrative
|
94
|
|
|
100
|
|
||
Total costs and expenses
|
1,126
|
|
|
1,161
|
|
||
Income from operations
|
71
|
|
|
572
|
|
||
Net interest and other
|
(49
|
)
|
|
(45
|
)
|
||
Other net periodic benefit costs
|
5
|
|
|
(3
|
)
|
||
Income before income taxes
|
27
|
|
|
524
|
|
||
Provision (benefit) for income taxes
|
(147
|
)
|
|
168
|
|
||
Net income
|
$
|
174
|
|
|
$
|
356
|
|
Net income per share:
|
|
|
|
|
|
||
Basic
|
$
|
0.21
|
|
|
$
|
0.42
|
|
Diluted
|
$
|
0.21
|
|
|
$
|
0.42
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
||
Basic
|
819
|
|
|
851
|
|
||
Diluted
|
820
|
|
|
852
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Net income
|
$
|
174
|
|
|
$
|
356
|
|
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
||
Change in actuarial loss in postretirement and postemployment plans
|
(4
|
)
|
|
4
|
|
||
Other comprehensive income (loss)
|
(4
|
)
|
|
4
|
|
||
Comprehensive income
|
$
|
170
|
|
|
$
|
360
|
|
|
March 31,
|
|
December 31,
|
||||
(In millions, except par value and share amounts)
|
2019
|
|
2018
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,019
|
|
|
$
|
1,462
|
|
Receivables, less reserve of $12
and $11
|
1,086
|
|
|
1,079
|
|
||
Inventories
|
83
|
|
|
96
|
|
||
Other current assets
|
160
|
|
|
257
|
|
||
Current assets held for sale
|
428
|
|
|
27
|
|
||
Total current assets
|
2,776
|
|
|
2,921
|
|
||
Equity method investments
|
719
|
|
|
745
|
|
||
Property, plant and equipment, less accumulated depreciation,
depletion and amortization of $17,669 and $21,830
|
16,714
|
|
|
16,804
|
|
||
Goodwill
|
97
|
|
|
97
|
|
||
Other noncurrent assets
|
440
|
|
|
723
|
|
||
Noncurrent assets held for sale
|
664
|
|
|
31
|
|
||
Total assets
|
$
|
21,410
|
|
|
$
|
21,321
|
|
Liabilities
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
1,310
|
|
|
$
|
1,320
|
|
Payroll and benefits payable
|
76
|
|
|
154
|
|
||
Accrued taxes
|
149
|
|
|
181
|
|
||
Other current liabilities
|
220
|
|
|
170
|
|
||
Current liabilities held for sale
|
103
|
|
|
7
|
|
||
Total current liabilities
|
1,858
|
|
|
1,832
|
|
||
Long-term debt
|
5,501
|
|
|
5,499
|
|
||
Deferred tax liabilities
|
192
|
|
|
199
|
|
||
Defined benefit postretirement plan obligations
|
179
|
|
|
195
|
|
||
Asset retirement obligations
|
192
|
|
|
1,081
|
|
||
Deferred credits and other liabilities
|
317
|
|
|
279
|
|
||
Noncurrent liabilities held for sale
|
963
|
|
|
108
|
|
||
Total liabilities
|
9,202
|
|
|
9,193
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Stockholders’ Equity
|
|
|
|
|
|
||
Preferred stock – no shares issued or outstanding (no par value,
26 million shares authorized)
|
$
|
—
|
|
|
$
|
—
|
|
Common stock:
|
|
|
|
|
|
||
Issued – 937 million shares and 937 million shares (par value $1 per share,
1.925 billion shares authorized at March 31, 2019 and 1.925 billion shares authorized at December 31, 2018)
|
937
|
|
|
937
|
|
||
Held in treasury, at cost – 117 million shares and 118 million shares
|
(3,745
|
)
|
|
(3,816
|
)
|
||
Additional paid-in capital
|
7,149
|
|
|
7,238
|
|
||
Retained earnings
|
7,808
|
|
|
7,706
|
|
||
Accumulated other comprehensive income
|
59
|
|
|
63
|
|
||
Total stockholders' equity
|
12,208
|
|
|
12,128
|
|
||
Total liabilities and stockholders' equity
|
$
|
21,410
|
|
|
$
|
21,321
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Increase (decrease) in cash and cash equivalents
|
|
|
|
||||
Operating activities:
|
|
|
|
|
|
||
Net income
|
$
|
174
|
|
|
$
|
356
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||
Depreciation, depletion and amortization
|
554
|
|
|
590
|
|
||
Impairments
|
6
|
|
|
8
|
|
||
Exploratory dry well costs and unproved property impairments
|
49
|
|
|
42
|
|
||
Net gain on disposal of assets
|
(42
|
)
|
|
(257
|
)
|
||
Deferred income taxes
|
(31
|
)
|
|
(31
|
)
|
||
Net loss on derivative instruments
|
91
|
|
|
102
|
|
||
Net settlements of derivative instruments
|
22
|
|
|
(59
|
)
|
||
Pension and other post retirement benefits, net
|
(25
|
)
|
|
(34
|
)
|
||
Stock-based compensation
|
14
|
|
|
14
|
|
||
Equity method investments, net
|
14
|
|
|
32
|
|
||
Changes in:
|
|
|
|
|
|||
Current receivables
|
(73
|
)
|
|
(130
|
)
|
||
Inventories
|
4
|
|
|
(9
|
)
|
||
Current accounts payable and accrued liabilities
|
(102
|
)
|
|
81
|
|
||
Other current assets and liabilities
|
14
|
|
|
(25
|
)
|
||
All other operating, net
|
(154
|
)
|
|
(31
|
)
|
||
Net cash provided by operating activities
|
515
|
|
|
649
|
|
||
Investing activities:
|
|
|
|
|
|
||
Additions to property, plant and equipment
|
(615
|
)
|
|
(662
|
)
|
||
Additions to other assets
|
14
|
|
|
(72
|
)
|
||
Acquisitions, net of cash acquired
|
—
|
|
|
(4
|
)
|
||
Disposal of assets, net of cash transferred to the buyer
|
13
|
|
|
1,180
|
|
||
Equity method investments - return of capital
|
12
|
|
|
9
|
|
||
All other investing, net
|
12
|
|
|
(2
|
)
|
||
Net cash provided by (used in) investing activities
|
(564
|
)
|
|
449
|
|
||
Financing activities:
|
|
|
|
|
|
||
Purchases of common stock
|
(30
|
)
|
|
(9
|
)
|
||
Dividends paid
|
(41
|
)
|
|
(42
|
)
|
||
All other financing, net
|
(1
|
)
|
|
2
|
|
||
Net cash used in financing activities
|
(72
|
)
|
|
(49
|
)
|
||
Effect of exchange rate on cash and cash equivalents
|
1
|
|
|
1
|
|
||
Net increase (decrease) in cash and cash equivalents
|
(120
|
)
|
|
1,050
|
|
||
Cash and cash equivalents at beginning of period
|
1,462
|
|
|
563
|
|
||
Cash and cash equivalents at end of period
|
$
|
1,342
|
|
|
$
|
1,613
|
|
|
|
|
|
||||
Reconciliation of cash and cash equivalents
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,019
|
|
|
$
|
1,613
|
|
Cash and cash equivalents included in current assets held for sale
|
323
|
|
|
—
|
|
||
Total cash and cash equivalents
|
$
|
1,342
|
|
|
$
|
1,613
|
|
|
|
Total Equity of Marathon Oil Stockholders
|
|
|
||||||||||||||||||||||||
(In millions)
|
|
Preferred
Stock
|
|
Common
Stock
|
|
Treasury
Stock
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Total
Equity
|
||||||||||||||
Three Months Ended March 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
December 31, 2017 Balance
|
|
$
|
—
|
|
|
$
|
937
|
|
|
$
|
(3,325
|
)
|
|
$
|
7,379
|
|
|
$
|
6,779
|
|
|
$
|
(62
|
)
|
|
$
|
11,708
|
|
Shares issued - stock-based compensation
|
|
—
|
|
|
—
|
|
|
158
|
|
|
(93
|
)
|
|
—
|
|
|
—
|
|
|
65
|
|
|||||||
Shares repurchased
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|||||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(49
|
)
|
|
—
|
|
|
—
|
|
|
(49
|
)
|
|||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
356
|
|
|
—
|
|
|
356
|
|
|||||||
Other comprehensive income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
4
|
|
|||||||
Dividends paid (per share amount of $0.05)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(42
|
)
|
|
—
|
|
|
(42
|
)
|
|||||||
March 31, 2018 Balance
|
|
$
|
—
|
|
|
$
|
937
|
|
|
$
|
(3,175
|
)
|
|
$
|
7,237
|
|
|
$
|
7,093
|
|
|
$
|
(58
|
)
|
|
$
|
12,034
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Three Months Ended March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
December 31, 2018 Balance
|
|
$
|
—
|
|
|
$
|
937
|
|
|
$
|
(3,816
|
)
|
|
$
|
7,238
|
|
|
$
|
7,706
|
|
|
$
|
63
|
|
|
$
|
12,128
|
|
Cumulative-effect adjustment (Note 2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(31
|
)
|
|
—
|
|
|
(31
|
)
|
|||||||
Shares issued - stock-based compensation
|
|
—
|
|
|
—
|
|
|
101
|
|
|
(39
|
)
|
|
—
|
|
|
—
|
|
|
62
|
|
|||||||
Shares repurchased
|
|
—
|
|
|
—
|
|
|
(30
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(30
|
)
|
|||||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(50
|
)
|
|
—
|
|
|
—
|
|
|
(50
|
)
|
|||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
174
|
|
|
—
|
|
|
174
|
|
|||||||
Other comprehensive income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
(4
|
)
|
|||||||
Dividends paid (per share amount of $0.05)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(41
|
)
|
|
—
|
|
|
(41
|
)
|
|||||||
March 31, 2019 Balance
|
|
$
|
—
|
|
|
$
|
937
|
|
|
$
|
(3,745
|
)
|
|
$
|
7,149
|
|
|
$
|
7,808
|
|
|
$
|
59
|
|
|
$
|
12,208
|
|
1
.
|
Basis of Presentation
|
•
|
Implemented an accounting policy to not recognize any right-of-use assets and lease liabilities related to short-term leases on the balance sheet.
|
•
|
Implemented an accounting policy to not separate the lease and nonlease components for all asset classes, except for vessels.
|
•
|
Elected the package of practical expedients which allows us to not reassess our prior conclusions regarding the lease identification and lease classification for contracts that commenced or expired prior to the effective date.
|
•
|
Elected the practical expedient pertaining to land easements which allows us to continue accounting for existing agreements under the previous accounting policies as nonlease transactions. Any modifications of existing contracts or new agreements will be assessed under the new lease accounting guidance and may become leases in the future.
|
3
.
|
Income and Dividends per Common Share
|
|
Three Months Ended March 31,
|
||||||
(In millions, except per share data)
|
2019
|
|
2018
|
||||
Net income
|
$
|
174
|
|
|
$
|
356
|
|
|
|
|
|
||||
Weighted average common shares outstanding
|
819
|
|
|
851
|
|
||
Effect of dilutive securities
|
1
|
|
|
1
|
|
||
Weighted average common shares, diluted
|
820
|
|
|
852
|
|
||
Net income per share:
|
|
|
|
||||
Basic
|
$
|
0.21
|
|
|
$
|
0.42
|
|
Diluted
|
$
|
0.21
|
|
|
$
|
0.42
|
|
|
|
|
|
||||
Dividends per share
|
$
|
0.05
|
|
|
$
|
0.05
|
|
4
.
|
Dispositions
|
5
.
|
Revenues
|
|
Three Months Ended March 31, 2019
|
|||||||||||||||||
United States
|
|
|
|
Northern
|
|
|
||||||||||||
(In millions)
|
Eagle Ford
|
Bakken
|
Oklahoma
|
Delaware
|
Other U.S.
|
Total
|
||||||||||||
Crude oil and condensate
|
$
|
318
|
|
$
|
372
|
|
$
|
77
|
|
$
|
64
|
|
$
|
28
|
|
$
|
859
|
|
Natural gas liquids
|
35
|
|
10
|
|
22
|
|
8
|
|
2
|
|
77
|
|
||||||
Natural gas
|
34
|
|
12
|
|
45
|
|
6
|
|
6
|
|
103
|
|
||||||
Other
|
2
|
|
—
|
|
—
|
|
—
|
|
21
|
|
23
|
|
||||||
Revenues from contracts with customers
|
$
|
389
|
|
$
|
394
|
|
$
|
144
|
|
$
|
78
|
|
$
|
57
|
|
$
|
1,062
|
|
|
Three Months Ended March 31, 2019
|
|||||||||||
International
|
|
|
Other
|
|
||||||||
(In millions)
|
E.G.
|
U.K.
|
International
|
Total
|
||||||||
Crude oil and condensate
|
$
|
47
|
|
$
|
56
|
|
$
|
10
|
|
$
|
113
|
|
Natural gas liquids
|
1
|
|
1
|
|
—
|
|
2
|
|
||||
Natural gas
|
7
|
|
8
|
|
—
|
|
15
|
|
||||
Other
|
—
|
|
8
|
|
—
|
|
8
|
|
||||
Revenues from contracts with customers
|
$
|
55
|
|
$
|
73
|
|
$
|
10
|
|
$
|
138
|
|
|
Three Months Ended March 31, 2018
|
|||||||||||||||||
United States
|
|
|
|
Northern
|
|
|
||||||||||||
(In millions)
|
Eagle Ford
|
Bakken
|
Oklahoma
|
Delaware
|
Other U.S.
|
Total
|
||||||||||||
Crude oil and condensate
|
$
|
366
|
|
$
|
330
|
|
$
|
115
|
|
$
|
55
|
|
$
|
53
|
|
$
|
919
|
|
Natural gas liquids
|
42
|
|
15
|
|
37
|
|
6
|
|
3
|
|
103
|
|
||||||
Natural gas
|
33
|
|
10
|
|
43
|
|
5
|
|
7
|
|
98
|
|
||||||
Other
|
2
|
|
—
|
|
—
|
|
—
|
|
3
|
|
5
|
|
||||||
Revenues from contracts with customers
|
$
|
443
|
|
$
|
355
|
|
$
|
195
|
|
$
|
66
|
|
$
|
66
|
|
$
|
1,125
|
|
|
Three Months Ended March 31, 2018
|
||||||||||||||
International
|
|
|
|
Other
|
|
||||||||||
(In millions)
|
E.G.
|
U.K.
|
Libya
|
International
|
Total
|
||||||||||
Crude oil and condensate
|
$
|
71
|
|
$
|
95
|
|
$
|
187
|
|
$
|
23
|
|
$
|
376
|
|
Natural gas liquids
|
1
|
|
—
|
|
—
|
|
—
|
|
1
|
|
|||||
Natural gas
|
9
|
|
8
|
|
9
|
|
—
|
|
26
|
|
|||||
Other
|
—
|
|
9
|
|
—
|
|
—
|
|
9
|
|
|||||
Revenues from contracts with customers
|
$
|
81
|
|
$
|
112
|
|
$
|
196
|
|
$
|
23
|
|
$
|
412
|
|
(In millions)
|
March 31, 2019
|
January 1, 2019
|
||||
Receivables from contracts with customers, included in receivables, less reserves
|
$
|
751
|
|
$
|
714
|
|
Contract asset (liability)
|
$
|
—
|
|
$
|
(1
|
)
|
|
Three Months Ended
|
||
(In millions)
|
March 31, 2019
|
||
Contract asset (liability) balance as of January 1, 2019
|
$
|
(1
|
)
|
Revenue recognized as performance obligations are satisfied
|
24
|
|
|
Amounts invoiced to customers
|
(23
|
)
|
|
Contract asset (liability) balance as of March 31, 2019
|
$
|
—
|
|
6
.
|
Segment Information
|
•
|
United States ("
U.S.
") – explores for, produces and markets crude oil and condensate, NGLs and natural gas in the
United States
|
•
|
International ("Int’l") – explores for, produces and markets crude oil and condensate, NGLs and natural gas outside of the
United States
and produces and markets products manufactured from natural gas, such as LNG and methanol, in Equatorial Guinea (“E.G.”)
|
|
Three Months Ended March 31, 2019
|
||||||||||||||
|
|
Not Allocated
|
|
|
|||||||||||
(In millions)
|
U.S.
|
|
Int'l
|
|
to Segments
|
|
Total
|
||||||||
Revenues from contracts with customers
|
$
|
1,062
|
|
|
$
|
138
|
|
|
$
|
—
|
|
|
$
|
1,200
|
|
Net gain (loss) on commodity derivatives
|
22
|
|
|
—
|
|
|
(113
|
)
|
(b)
|
(91
|
)
|
||||
Income from equity method investments
|
—
|
|
|
11
|
|
|
—
|
|
|
11
|
|
||||
Net gain on disposal of assets
|
—
|
|
|
—
|
|
|
42
|
|
(c)
|
42
|
|
||||
Other income
|
1
|
|
|
3
|
|
|
31
|
|
(d)
|
35
|
|
||||
Less costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Production
|
139
|
|
|
50
|
|
|
(2
|
)
|
|
187
|
|
||||
Shipping, handling and other operating
|
140
|
|
|
13
|
|
|
1
|
|
|
154
|
|
||||
Exploration
|
59
|
|
|
—
|
|
|
—
|
|
|
59
|
|
||||
Depreciation, depletion and amortization
|
514
|
|
|
34
|
|
|
6
|
|
|
554
|
|
||||
Impairments
|
—
|
|
|
—
|
|
|
6
|
|
(e)
|
6
|
|
||||
Taxes other than income
|
74
|
|
|
—
|
|
|
(2
|
)
|
|
72
|
|
||||
General and administrative
|
29
|
|
|
7
|
|
|
58
|
|
|
94
|
|
||||
Net interest and other
|
—
|
|
|
—
|
|
|
49
|
|
|
49
|
|
||||
Other net periodic benefit costs
|
—
|
|
|
(2
|
)
|
|
(3
|
)
|
|
(5
|
)
|
||||
Income tax benefit
|
(2
|
)
|
|
(11
|
)
|
|
(134
|
)
|
(f)
|
(147
|
)
|
||||
Segment income
|
$
|
132
|
|
|
$
|
61
|
|
|
$
|
(19
|
)
|
|
$
|
174
|
|
Capital expenditures
(a)
|
$
|
606
|
|
|
$
|
5
|
|
|
$
|
3
|
|
|
$
|
614
|
|
(a)
|
Includes accruals.
|
(b)
|
(c)
|
Primarily related to the sale of our working interest in the Droshky field (Gulf of Mexico), which closed during the first quarter of 2019.
|
(d)
|
Primarily related to the indemnification of certain tax liabilities in connection with the 2010-2011 Federal Tax Audit with the IRS (See
Note 7
).
|
(e)
|
Due to the anticipated sale of our non-operated interest in the Atrush block in Kurdistan (See
Note 10
).
|
(f)
|
|
Three Months Ended March 31, 2018
|
||||||||||||||
|
|
Not Allocated
|
|
|
|||||||||||
(In millions)
|
U.S.
|
|
Int'l
|
|
to Segments
|
|
Total
|
||||||||
Revenue from contracts with customers
|
$
|
1,125
|
|
|
$
|
412
|
|
|
$
|
—
|
|
|
$
|
1,537
|
|
Net loss on commodity derivatives
|
(59
|
)
|
|
—
|
|
|
(43
|
)
|
(b)
|
(102
|
)
|
||||
Income from equity method investments
|
—
|
|
|
37
|
|
|
—
|
|
|
37
|
|
||||
Net gain on disposal of assets
|
—
|
|
|
—
|
|
|
257
|
|
(c)
|
257
|
|
||||
Other income
|
3
|
|
|
1
|
|
|
—
|
|
|
4
|
|
||||
Less costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Production
|
151
|
|
|
67
|
|
|
(1
|
)
|
|
217
|
|
||||
Shipping, handling and other operating
|
111
|
|
|
19
|
|
|
—
|
|
|
130
|
|
||||
Exploration
|
51
|
|
|
1
|
|
|
—
|
|
|
52
|
|
||||
Depreciation, depletion and amortization
|
528
|
|
|
54
|
|
|
8
|
|
|
590
|
|
||||
Impairments
|
—
|
|
|
—
|
|
|
8
|
|
|
8
|
|
||||
Taxes other than income
|
64
|
|
|
—
|
|
|
—
|
|
|
64
|
|
||||
General and administrative
|
36
|
|
|
9
|
|
|
55
|
|
|
100
|
|
||||
Net interest and other
|
—
|
|
|
—
|
|
|
45
|
|
|
45
|
|
||||
Other net periodic benefit costs
|
—
|
|
|
(2
|
)
|
|
5
|
|
(d)
|
3
|
|
||||
Income tax provision (benefit)
|
3
|
|
|
170
|
|
|
(5
|
)
|
|
168
|
|
||||
Segment income
|
$
|
125
|
|
|
$
|
132
|
|
|
$
|
99
|
|
|
$
|
356
|
|
Capital expenditures
(a)
|
$
|
611
|
|
|
$
|
6
|
|
|
$
|
5
|
|
|
$
|
622
|
|
(a)
|
Includes accruals.
|
(b)
|
(c)
|
(d)
|
|
Three Months Ended March 31,
|
||||
|
2019
|
|
2018
|
||
Effective income tax expense (benefit) rate
(a)
|
(544
|
)%
|
|
32
|
%
|
(a)
|
In all periods presented, we maintained our valuation allowance on our net federal deferred tax assets in the U.S.
|
•
|
During the three months ended
March 31, 2019
, we settled the 2010-2011 U.S. Federal Tax Audit ("IRS Audit") resulting in a tax benefit of
$126 million
. Additionally, we recorded a non-cash deferred tax benefit of
$18 million
in the U.K. related to an internal restructuring. These two items are discrete to the first quarter of 2019. Excluding these discrete adjustments, the effective income tax rate for the quarter was a benefit of
8%
.
|
•
|
During the three months ended
March 31, 2018
, we incurred tax expense in Libya of
$162 million
. Excluding Libya, the effective income tax rate for the three months ended March 31, 2018, was an expense of
2%
.
|
|
March 31,
|
|
December 31,
|
||||
(In millions)
|
2019
|
|
2018
|
||||
Crude oil and natural gas
|
$
|
12
|
|
|
$
|
11
|
|
Supplies and other items
|
71
|
|
|
85
|
|
||
Inventories
|
$
|
83
|
|
|
$
|
96
|
|
|
March 31,
|
|
December 31,
|
||||
(In millions)
|
2019
|
|
2018
|
||||
United States
|
$
|
16,068
|
|
|
$
|
16,011
|
|
International
|
566
|
|
|
710
|
|
||
Corporate
|
80
|
|
|
83
|
|
||
Net property, plant and equipment
|
$
|
16,714
|
|
|
$
|
16,804
|
|
•
|
2019
– During the three months ended
March 31, 2019
, we recorded a property impairment charge of
$6 million
, as a result of the anticipated sale of our subsidiary, Marathon Oil KDV B.V., in our International segment to a fair value of
$37 million
. The related fair value was measured using the market approach, based upon anticipated sales proceeds less costs to sell which resulted in a Level 2 classification. See
Note 4
for discussion of the divestiture in further detail.
|
•
|
2018
– During the three months ended
March 31, 2018
, we recorded a proved property impairment of
$8 million
, to a fair value of
$50 million
, as a result of anticipated sales proceeds in our non-operated Sarsang block in Kurdistan. The Sarsang block is included in our International segment. The fair value was measured using the market approach, based upon anticipated sales proceeds less costs to sell, which resulted in a Level 2 classification.
|
|
Three Months Ended March 31,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Exploration Expenses
|
|
|
|
||||
Unproved property impairments
|
$
|
44
|
|
|
$
|
40
|
|
Dry well costs
|
5
|
|
|
2
|
|
||
Geological and geophysical
|
6
|
|
|
6
|
|
||
Other
|
4
|
|
|
4
|
|
||
Total exploration expenses
|
$
|
59
|
|
|
$
|
52
|
|
|
|
|
|
||||
|
March 31,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Beginning balance
|
$
|
1,145
|
|
|
$
|
1,483
|
|
Incurred liabilities, including acquisitions
|
12
|
|
|
4
|
|
||
Settled liabilities, including dispositions
|
(109
|
)
|
|
(8
|
)
|
||
Accretion expense (included in depreciation, depletion and amortization)
|
13
|
|
|
18
|
|
||
Revisions of estimates
|
11
|
|
|
—
|
|
||
Held for sale
|
(862
|
)
|
|
—
|
|
||
Ending balance
|
$
|
210
|
|
|
$
|
1,497
|
|
•
|
Settled liabilities
is primarily related to the sale of our working interest in the Droshky field (Gulf of Mexico), which closed during the first quarter of 2019.
|
•
|
Held for sale
include the asset retirement obligations associated with the sale of our U.K. business, which was partially offset by settled liabilities for dispositions primarily related to the Droshky field in the first quarter of 2019. See
Note 4
for discussion of the divestitures in further detail.
|
•
|
Ending balance
includes
$18 million
classified as short-term at
March 31, 2019
.
|
•
|
Ending balance
includes
$52 million
classified as short-term at
March 31, 2018
.
|
(In millions)
|
|
March 31, 2019
|
||
Operating Leases:
|
Balance Sheet Location:
|
|
||
ROU asset
|
Other noncurrent assets
|
$
|
247
|
|
Current portion of long-term lease liability
|
Other current liabilities
|
$
|
92
|
|
Long-term lease liability
|
Deferred credits and other liabilities
|
$
|
162
|
|
•
|
Implemented an accounting policy to not recognize any right-of-use assets and lease liabilities related to short-term leases on the balance sheet.
|
•
|
Implemented an accounting policy to not separate the lease and nonlease components for all asset classes, except for vessels.
|
•
|
Elected the package of practical expedients which allows us to not reassess our prior conclusions regarding the lease identification and lease classification for contracts that commenced or expired prior to the effective date.
|
•
|
Elected the practical expedient pertaining to land easements which allows us to continue accounting for existing agreements under the previous accounting policies as nonlease transactions. Any modifications of existing contracts or new agreements will be assessed under the new lease accounting guidance and may become leases in the future.
|
(In millions)
|
Three Months Ended March 31, 2019
|
||
Lease costs:
|
|
||
Operating lease costs
(a)
|
$
|
21
|
|
Short-term lease costs
(b)
|
81
|
|
|
Variable lease costs
(c)
|
60
|
|
|
Total lease costs
|
$
|
162
|
|
|
|
||
Other information:
|
|
||
ROU assets obtained in exchange for new operating lease liabilities
(d)
|
$
|
268
|
|
(a)
|
Represents our net share of the ROU asset amortization and the interest expense.
|
(b)
|
Represents our net share of lease costs arising from leases of less than 1 year but longer than one month that were not included in the lease liability.
|
(c)
|
Represents our net share of variable lease payments that were not included in the lease liability.
|
(d)
|
Represents the cumulative value of ROU assets recognized at lease inception during the quarter. This amount is then amortized as we utilize the ROU asset, the net effect of which is the ending ROU asset of
$247 million
(first table above).
|
(In millions)
|
Operating Lease Obligations
|
||
2019
|
$
|
80
|
|
2020
|
94
|
|
|
2021
|
57
|
|
|
2022
|
34
|
|
|
2023
|
4
|
|
|
Thereafter
|
1
|
|
|
Total undiscounted lease payments
|
$
|
270
|
|
Less: Amount representing interest
|
16
|
|
|
Total operating lease liabilities
|
$
|
254
|
|
Current portion of long-term lease liability as of March 31, 2019
|
$
|
92
|
|
Long-term lease liability as of March 31, 2019
|
$
|
162
|
|
(In millions)
|
Operating Lease Future Cash Receipts
|
||
2019
|
$
|
5
|
|
2020
|
6
|
|
|
2021
|
6
|
|
|
2022
|
6
|
|
|
2023
|
6
|
|
|
Thereafter
|
66
|
|
|
Total undiscounted cash flows
|
$
|
95
|
|
|
March 31, 2019
|
|
|
||||||||||
(In millions)
|
Asset
|
|
Liability
|
|
Net Asset (Liability)
|
|
Balance Sheet Location
|
||||||
Not Designated as Hedges
|
|
|
|
|
|
|
|
||||||
Commodity
|
$
|
18
|
|
|
$
|
—
|
|
|
$
|
18
|
|
|
Other current assets
|
Commodity
|
1
|
|
|
—
|
|
|
1
|
|
|
Other noncurrent assets
|
|||
Commodity
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
Other current liabilities
|
|||
Commodity
|
—
|
|
|
4
|
|
|
(4
|
)
|
|
Deferred credits and other liabilities
|
|||
Total Not Designated as Hedges
|
$
|
19
|
|
|
$
|
5
|
|
|
$
|
14
|
|
|
|
|
December 31, 2018
|
|
|
||||||||||
(In millions)
|
Asset
|
|
Liability
|
|
Net Asset (Liability)
|
|
Balance Sheet Location
|
||||||
Not Designated as Hedges
|
|
|
|
|
|
|
|
||||||
Commodity
|
$
|
131
|
|
|
$
|
—
|
|
|
$
|
131
|
|
|
Other current assets
|
Commodity
|
—
|
|
|
4
|
|
|
(4
|
)
|
|
Deferred credits and other liabilities
|
|||
Total Not Designated as Hedges
|
$
|
131
|
|
|
$
|
4
|
|
|
$
|
127
|
|
|
|
|
|
2019
|
|
|
2020
|
|
|
2021
|
||||||||||||||
Crude Oil
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
|
|
Full
Year |
|
|
First Quarter
|
||||||||||
NYMEX WTI Three-Way Collars
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Volume (Bbls/day)
|
|
70,000
|
|
|
50,000
|
|
|
50,000
|
|
|
|
—
|
|
|
|
—
|
|
|||||
Weighted average price per Bbl:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ceiling
|
|
$
|
71.21
|
|
|
$
|
75.88
|
|
|
$
|
75.88
|
|
|
|
—
|
|
|
|
—
|
|
||
Floor
|
|
$
|
55.86
|
|
|
$
|
57.80
|
|
|
$
|
57.80
|
|
|
|
—
|
|
|
|
—
|
|
||
Sold put
|
|
$
|
48.71
|
|
|
$
|
50.80
|
|
|
$
|
50.80
|
|
|
|
—
|
|
|
|
—
|
|
||
Basis Swaps - Argus WTI Midland
(b)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Volume (Bbls/day)
|
|
10,000
|
|
|
15,000
|
|
|
15,000
|
|
|
|
15,000
|
|
|
|
—
|
|
|||||
Weighted average price per Bbl
|
|
$
|
(0.82
|
)
|
|
$
|
(1.40
|
)
|
|
$
|
(1.40
|
)
|
|
|
$
|
(0.94
|
)
|
|
|
—
|
|
|
Basis Swaps - Net Energy Clearbrook
(c)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Volume (Bbls/day)
|
|
1,000
|
|
|
1,000
|
|
|
1,000
|
|
|
|
—
|
|
|
|
—
|
|
|||||
Weighted average price per Bbl
|
|
$
|
(3.50
|
)
|
|
$
|
(3.50
|
)
|
|
$
|
(3.50
|
)
|
|
|
—
|
|
|
|
—
|
|
||
Basis Swaps - NYMEX WTI / ICE Brent
(d)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Volume (Bbls/day)
|
|
5,000
|
|
|
5,000
|
|
|
5,000
|
|
|
|
5,000
|
|
|
|
3,278
|
|
|||||
Weighted average price per Bbl
|
|
$
|
(7.24
|
)
|
|
$
|
(7.24
|
)
|
|
$
|
(7.24
|
)
|
|
|
$
|
(7.24
|
)
|
|
|
$
|
(7.24
|
)
|
NYMEX Roll Basis Swaps
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Volume (Bbls/day)
|
|
60,000
|
|
|
60,000
|
|
|
60,000
|
|
|
|
—
|
|
|
|
—
|
|
|||||
Weighted average price per Bbl
|
|
$
|
0.38
|
|
|
$
|
0.38
|
|
|
$
|
0.38
|
|
|
|
—
|
|
|
|
—
|
|
(a)
|
Between April 1, 2019 and April 29, 2019, we entered into
20,000
Bbls/day
and
20,000
Bbls/day of three-way collars for July - December 2019 and January - June 2020, with a ceiling of
$70.00
, a sold put of
$47.00
, and a floor of
$55.00
. We also entered into
10,000
Bbls/day of three-way collars for July - December 2019 with a ceiling of
$74.09
, a sold put of
$48.00
, and a floor of
$55.00
.
|
(b)
|
The basis differential price is indexed against Argus WTI Midland.
|
(c)
|
The basis differential price is indexed against Net Energy Canada Bakken SW at Clearbrook ("UHC").
|
(d)
|
The basis differential price is indexed against International Commodity Exchange ("ICE") Brent and NYMEX WTI.
|
|
March 31, 2019
|
||||||||||||||
(In millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Derivative instruments, assets
|
|
|
|
|
|
|
|
||||||||
Commodity
(a)
|
$
|
—
|
|
|
$
|
16
|
|
|
$
|
—
|
|
|
$
|
16
|
|
Derivative instruments, assets
|
$
|
—
|
|
|
$
|
16
|
|
|
$
|
—
|
|
|
$
|
16
|
|
Derivative instruments, liabilities
|
|
|
|
|
|
|
|
||||||||
Commodity
(a)
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
Derivative instruments, liabilities
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
(a)
|
|
December 31, 2018
|
||||||||||||||
(In millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Derivative instruments, assets
|
|
|
|
|
|
|
|
||||||||
Commodity
(a)
|
$
|
21
|
|
|
$
|
106
|
|
|
$
|
—
|
|
|
$
|
127
|
|
Derivative instruments, assets
|
$
|
21
|
|
|
$
|
106
|
|
|
$
|
—
|
|
|
$
|
127
|
|
Derivative instruments, liabilities
|
|
|
|
|
|
|
|
||||||||
Derivative instruments, liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(a)
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||
(In millions)
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
||||||||
Financial assets
|
|
|
|
|
|
|
|
||||||||
Current assets
|
$
|
4
|
|
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
3
|
|
Other noncurrent assets
|
25
|
|
|
32
|
|
|
76
|
|
|
81
|
|
||||
Total financial assets
|
$
|
29
|
|
|
$
|
35
|
|
|
$
|
79
|
|
|
$
|
84
|
|
Financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other current liabilities
|
$
|
42
|
|
|
$
|
58
|
|
|
$
|
37
|
|
|
$
|
58
|
|
Long-term debt, including current portion
(a)
|
5,875
|
|
|
5,528
|
|
|
5,469
|
|
|
5,528
|
|
||||
Deferred credits and other liabilities
|
86
|
|
|
111
|
|
|
93
|
|
|
88
|
|
||||
Total financial liabilities
|
$
|
6,003
|
|
|
$
|
5,697
|
|
|
$
|
5,599
|
|
|
$
|
5,674
|
|
(a)
|
Excludes capital leases and debt issuance costs.
|
|
Stock Options
|
|
Restricted Stock Awards & Units
|
||||||||||
|
Number of
Shares
|
|
Weighted
Average
Exercise Price
|
|
Awards
|
|
Weighted
Average Grant
Date Fair Value
|
||||||
Outstanding at December 31, 2018
|
6,180,007
|
|
|
$
|
24.39
|
|
|
8,504,946
|
|
|
$
|
14.04
|
|
Granted
|
648,526
|
|
(a)
|
$
|
16.79
|
|
|
3,824,208
|
|
|
$
|
16.98
|
|
Exercised/Vested
|
(10,470
|
)
|
|
$
|
14.92
|
|
|
(3,519,699
|
)
|
|
$
|
12.37
|
|
Canceled
|
(151,412
|
)
|
|
$
|
27.15
|
|
|
(157,302
|
)
|
|
$
|
14.58
|
|
Outstanding at March 31, 2019
|
6,666,651
|
|
|
$
|
23.60
|
|
|
8,652,153
|
|
|
$
|
16.01
|
|
|
|
|
|
|
|
|
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
|
Three Months Ended March 31,
|
||||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Service cost
|
$
|
4
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Interest cost
|
7
|
|
|
7
|
|
|
1
|
|
|
2
|
|
||||
Expected return on plan assets
|
(8
|
)
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization:
|
|
|
|
|
|
|
|
|
|
|
|||||
– prior service credit
|
(2
|
)
|
|
(2
|
)
|
|
(4
|
)
|
|
(2
|
)
|
||||
– actuarial loss
|
2
|
|
|
3
|
|
|
—
|
|
|
—
|
|
||||
Net settlement loss
(a)
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit cost
(b)
|
$
|
3
|
|
|
$
|
7
|
|
|
$
|
(3
|
)
|
|
$
|
1
|
|
(a)
|
Settlements are recognized as they occur, once it is probable that lump sum payments from a plan for a given year will exceed the plan’s total service and interest cost for that year.
|
(b)
|
Net periodic benefit cost reflects a calculated market-related value of plan assets which recognizes changes in fair value over three years.
|
|
Three Months Ended March 31,
|
|
|
||||||
(In millions)
|
2019
|
|
2018
|
|
Income Statement Line
|
||||
Postretirement and postemployment plans
|
|
|
|
|
|
||||
Amortization of prior service credit
|
$
|
6
|
|
|
$
|
4
|
|
|
Other net periodic benefit costs
|
Amortization of actuarial loss
|
(2
|
)
|
|
(3
|
)
|
|
Other net periodic benefit costs
|
||
Net settlement loss
|
—
|
|
|
(4
|
)
|
|
Other net periodic benefit costs
|
||
|
4
|
|
|
(3
|
)
|
|
Income (loss) before income taxes
|
||
|
—
|
|
|
—
|
|
|
(Provision) benefit for income taxes
(a)
|
||
Total reclassifications to expense, net of tax
|
$
|
4
|
|
|
$
|
(3
|
)
|
|
Net income (loss)
|
(a)
|
During 2019 and 2018 we had a full valuation allowance on net federal deferred tax assets and as such, there is no tax impact to our postretirement and postemployment plans.
|
|
|
Three Months Ended March 31,
|
||||||
(In millions)
|
|
2019
|
|
2018
|
||||
Included in operating activities:
|
|
|
|
|
||||
Interest paid, net of amounts capitalized
|
|
$
|
52
|
|
|
$
|
52
|
|
Income taxes paid to taxing authorities
|
|
29
|
|
|
231
|
|
||
Noncash investing activities:
|
|
|
|
|
|
|
||
Increase in asset retirement costs
|
|
$
|
23
|
|
|
$
|
4
|
|
Asset retirement obligations assumed by buyer
(a)
|
|
98
|
|
|
1
|
|
(a)
|
In the first quarter of 2019, we closed on the sale of our working interest in the Droshky field (Gulf of Mexico), including our
$98 million
asset retirement obligation.
|
•
|
EGHoldings, in which we have a
60%
noncontrolling interest. EGHoldings is engaged in LNG production activity.
|
•
|
AMPCO, in which we have a
45%
interest. AMPCO is engaged in methanol production activity.
|
|
Ownership as of
|
|
March 31,
|
|
December 31,
|
||||
(In millions)
|
March 31, 2019
|
|
2019
|
|
2018
|
||||
EGHoldings
|
60%
|
|
$
|
368
|
|
|
$
|
402
|
|
Alba Plant LLC
|
52%
|
|
169
|
|
|
167
|
|
||
AMPCO
|
45%
|
|
182
|
|
|
176
|
|
||
Total
|
|
|
$
|
719
|
|
|
$
|
745
|
|
|
Three Months Ended March 31,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Income data:
|
|
|
|
||||
Revenues and other income
|
$
|
220
|
|
|
$
|
198
|
|
Income from operations
|
49
|
|
|
97
|
|
||
Net income
|
32
|
|
|
79
|
|
•
|
In the first quarter of 2019, we entered into an agreement to sell our business in the U.K., for proceeds of approximately
$140 million
, which reflects the assumption by the buyer of the cash equivalent and working capital balances, which was approximately
$350 million
at
December 31, 2018
. Though there are certain contractual requirements that must be satisfied, the transaction is expected to close in the second half of 2019, with an effective date of January 1, 2019.
|
•
|
In February 2019, we closed the sale of our working interest in the Droshky field (Gulf of Mexico) for a pre-tax gain of $42 million, further concentrating and simplifying our portfolio.
|
•
|
Returned additional capital to shareholders by acquiring approximately
1 million
common shares at a cost of
$14 million
, with
$786 million
of repurchase authorization remaining.
|
•
|
At the end of the
first quarter
2019, we had approximately
$4.4 billion
of liquidity, comprised of
$1.0 billion
in cash and an undrawn
$3.4 billion
revolving credit facility. The company is rated investment grade at all three major credit ratings agencies following a recent upgrade by Moody’s Investor Services, Inc.
|
•
|
Reduced estimated costs of our asset retirement obligations by approximately $100 million in connection with the disposition of our working interest of the Droshky field in the Gulf of Mexico.
|
•
|
Total net sales volumes for the quarter were
385
mboed, including
297
mboed in the U.S. resource plays. Our U.S. resource plays net sales volumes increased
7%
compared to the same quarter last year.
|
•
|
Wells to sales for the quarter increased 45% in the U.S. resource plays compared to the same quarter last year.
|
•
|
Our net income per share was
$0.21
in the
first quarter
of
2019
as compared to a net income per share of
$0.42
in the same period last year. Included in net income results for the current quarter:
|
◦
|
A decrease in revenues from contracts with customers of approximately
22%
to
$1.2 billion
, compared to the same quarter last year, primarily as a result of the sale of our Libya subsidiary in the prior year and lower price realizations and net sales volumes in the current quarter. See
Note 4
for further detail on the Libya disposition.
|
◦
|
Total costs and expenses from operations decreased
$35 million
during the quarter compared to the same quarter last year primarily as a result of lower production expenses and the sale of our Libya subsidiary. See
Note 4
for further detail on the Libya disposition.
|
|
Three Months Ended March 31,
|
||||
Net Sales Volumes
|
2019
|
|
2018
|
|
Increase (Decrease)
|
United States
(mboed)
|
297
|
|
284
|
|
5%
|
International
(mboed)
(a)
|
88
|
|
147
|
|
(40)%
|
Total
(mboed)
|
385
|
|
431
|
|
(11)%
|
(a)
|
In the first quarter of 2019, we announced the sale of our U.K. business, which is expected to close in the second half of 2019 subject to certain contractual requirements that must be satisfied. The three months ended March 31, 2019 and 2018 includes net sales volumes related to the U.K. of
11
mboed and
17
mboed. We closed on the sale of our Libya subsidiary in the first quarter of 2018. The three months ended March 31, 2018 includes net sales volumes relating to Libya of
32
mboed. See
Note 4
to the consolidated financial statements for further information.
|
|
Three Months Ended March 31,
|
||||
Net Sales Volumes
|
2019
|
|
2018
|
|
Increase (Decrease)
|
Equivalent Barrels
(mboed)
|
|
|
|
|
|
Eagle Ford
|
105
|
|
104
|
|
1%
|
Bakken
|
92
|
|
74
|
|
24%
|
Oklahoma
|
63
|
|
74
|
|
(15)%
|
Northern Delaware
|
26
|
|
16
|
|
63%
|
Other United States
|
11
|
|
16
|
|
(31)%
|
Total United States
(mboed)
|
297
|
|
284
|
|
5%
|
|
Three Months Ended March 31, 2019
|
||||||||
Sales Mix - U.S. Resource Plays
|
Eagle Ford
|
|
Bakken
|
|
Oklahoma
|
|
Northern Delaware
|
|
Total
|
Crude oil and condensate
|
58%
|
|
86%
|
|
25%
|
|
57%
|
|
60%
|
Natural gas liquids
|
22%
|
|
8%
|
|
29%
|
|
22%
|
|
18%
|
Natural gas
|
20%
|
|
6%
|
|
46%
|
|
21%
|
|
22%
|
|
Three Months Ended March 31,
|
||
Drilling Activity - U.S. Resource Plays
|
2019
|
|
2018
|
Gross Operated
|
|
|
|
Eagle Ford:
|
|
|
|
Wells drilled to total depth
|
30
|
|
34
|
Wells brought to sales
|
41
|
|
34
|
Bakken:
|
|
|
|
Wells drilled to total depth
|
12
|
|
19
|
Wells brought to sales
|
29
|
|
11
|
Oklahoma:
|
|
|
|
Wells drilled to total depth
|
20
|
|
13
|
Wells brought to sales
|
18
|
|
17
|
Northern Delaware:
|
|
|
|
Wells drilled to total depth
|
13
|
|
20
|
Wells brought to sales
|
15
|
|
9
|
•
|
Eagle Ford
– Our net sales volumes were
105
mboed in the
first quarter
of
2019
which was
1%
higher compared to the prior year quarter. We brought
41
gross company-operated wells sales in the quarter. We continue to concentrate in the condensate window as we focus on capital efficient development by maximizing our available surface facility capacity.
|
•
|
Bakken
– Our net sales volumes of
92
mboed represent a
24%
increase over the prior year quarter of
74
mboed. We brought
29
gross company-operated wells to sales in the
first quarter
2019
. We continue to enhance our Williston Basin footprint and during the second quarter of 2019, executed a small bolt-on acquisition that added more than 50 company-operated locations to our inventory.
|
•
|
Oklahoma
– Our net sales volumes in the
first quarter
of
2019
decreased by
15%
from the prior year quarter, with net sales volumes of
63
mboed. We brought
18
gross company-operated wells to sales in the quarter, with 16 of these wells brought to sales during March. Additionally, development continues in the over-pressured STACK Meramac with various spacing designs.
|
•
|
Northern Delaware
– Our net sales volumes were
26
mboed in the
first quarter
of
2019
which was
63%
higher compared to the prior year quarter, while bringing
15
gross company-operated wells to sales. Our first quarter 2019 wells to sales include a mix of early development and delineation drilling across both the Malaga and Red Hills area.
|
|
Three Months Ended March 31,
|
||||
Net Sales Volumes
|
2019
|
|
2018
|
|
Increase (Decrease)
|
Equivalent Barrels
(mboed)
|
|
|
|
|
|
Equatorial Guinea
|
75
|
|
93
|
|
(19)%
|
United Kingdom
(a)
|
11
|
|
17
|
|
(35)%
|
Libya
|
—
|
|
32
|
|
(100)%
|
Other International
|
2
|
|
5
|
|
(60)%
|
Total International
(mboed)
|
88
|
|
147
|
|
(40)%
|
Equity Method Investees
|
|
|
|
|
|
LNG
(mtd)
|
4,636
|
|
5,541
|
|
(16)%
|
Methanol
(mtd)
|
1,003
|
|
1,195
|
|
(16)%
|
Condensate and LPG
(boed)
|
9,890
|
|
12,416
|
|
(20)%
|
(a)
|
Includes natural gas acquired for injection and subsequent resale.
|
•
|
Equatorial Guinea
– Net sales volumes in the
first quarter
2019
were lower compared to the same period in
2018
as a result of a planned triennial turnaround in E.G.
|
•
|
United Kingdom
–
First quarter
2019
net sales volumes were lower compared to the
first quarter
of
2018
primarily due to timing of liftings and operational issues in the non-operated Foinaven complex. In the first quarter of 2019, we entered into an agreement to sell our U.K. business. See
Note 4
to the consolidated financial statements for further information.
|
•
|
Libya
– During the
first quarter
of 2018 we closed on the sale of our subsidiary in Libya. See
Note 4
to the consolidated financial statements for further information.
|
|
Three Months Ended March 31,
|
|||||||||
|
2019
|
|
2018
|
|
Increase (Decrease)
|
|||||
Average Price Realizations
(a)
|
|
|
|
|
|
|||||
Crude oil and condensate
(per bbl)
(b)
|
$
|
54.05
|
|
|
$
|
62.22
|
|
|
(13
|
)%
|
Natural gas liquids
(per bbl)
|
15.66
|
|
|
22.95
|
|
|
(32
|
)%
|
||
Natural gas
(per mcf)
(c)
|
2.93
|
|
|
2.59
|
|
|
13
|
%
|
||
Benchmarks
|
|
|
|
|
|
|||||
WTI crude oil average of daily prices
(per bbl)
|
$
|
54.90
|
|
|
$
|
62.89
|
|
|
(13
|
)%
|
Magellan East Houston ("MEH") crude oil average of daily prices
(per bbl)
(d)
|
60.42
|
|
|
|
|
|
|
|||
LLS crude oil average of daily prices
(per bbl)
(d)
|
|
|
|
65.83
|
|
|
|
|
||
Mont Belvieu NGLs
(per bbl)
(d)
|
23.24
|
|
|
26.26
|
|
|
(12
|
)%
|
||
Henry Hub natural gas settlement date average
(per mmbtu)
|
3.15
|
|
|
3.00
|
|
|
5
|
%
|
(a)
|
Excludes gains or losses on commodity derivative instruments.
|
(b)
|
Inclusion of realized gains (losses) on crude oil derivative instruments would have impacted average price realizations by
$1.10
per bbl and
$(4.33)
per bbl for the
first quarter
2019
and
2018
.
|
(c)
|
Inclusion of realized gains (losses) on natural gas derivative instruments would have a minimal impact on average price realizations for the periods presented.
|
(d)
|
Benchmark change due to industry shift to MEH in the
first quarter
2019
.
|
(e)
|
Bloomberg Finance LLP: Y-grade Mix NGL of 50% ethane, 25% propane, 10% butane, 5% isobutane and 10% natural gasoline.
|
|
Three Months Ended March 31,
|
|||||||||
|
2019
|
|
2018
|
|
Increase (Decrease)
|
|||||
Average Price Realizations
|
|
|
|
|
|
|||||
Crude oil and condensate (
per bbl
)
|
$
|
53.93
|
|
|
$
|
66.23
|
|
|
(19
|
)%
|
Natural gas liquids (
per bbl
)
|
1.96
|
|
|
1.83
|
|
|
7
|
%
|
||
Natural gas (
per mcf
)
|
0.48
|
|
|
0.65
|
|
|
(26
|
)%
|
||
Benchmark
|
|
|
|
|
|
|||||
Brent (Europe) crude oil (
per bbl
)
(a)
|
$
|
63.17
|
|
|
$
|
66.81
|
|
|
(5
|
)%
|
(a)
|
Average of monthly prices obtained from the United States Energy Information Agency website.
|
|
Three Months Ended March 31,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Revenues from contracts with customers
|
|
|
|
||||
United States
|
$
|
1,062
|
|
|
$
|
1,125
|
|
International
|
138
|
|
|
412
|
|
||
Segment revenues from contracts with customers
|
$
|
1,200
|
|
|
$
|
1,537
|
|
|
|
|
|
Increase (Decrease) Related to
|
|
|
||||||||||
(In millions)
|
|
Three Months Ended March 31, 2018
|
|
Price Realizations
|
|
Net Sales Volumes
|
|
Three Months Ended March 31, 2019
|
||||||||
United States Price/Volume Analysis
|
||||||||||||||||
Crude oil and condensate
|
|
$
|
919
|
|
|
$
|
(130
|
)
|
|
$
|
70
|
|
|
$
|
859
|
|
Natural gas liquids
|
|
103
|
|
|
(36
|
)
|
|
10
|
|
|
77
|
|
||||
Natural gas
|
|
98
|
|
|
12
|
|
|
(7
|
)
|
|
103
|
|
||||
Other sales
|
|
5
|
|
|
|
|
|
|
23
|
|
||||||
Total
|
|
$
|
1,125
|
|
|
|
|
|
|
$
|
1,062
|
|
||||
International Price/Volume Analysis
|
||||||||||||||||
Crude oil and condensate
|
|
$
|
376
|
|
|
$
|
(26
|
)
|
|
$
|
(237
|
)
|
|
$
|
113
|
|
Natural gas liquids
|
|
1
|
|
|
—
|
|
|
1
|
|
|
2
|
|
||||
Natural gas
|
|
26
|
|
|
(5
|
)
|
|
(6
|
)
|
|
15
|
|
||||
Other sales
|
|
9
|
|
|
|
|
|
|
8
|
|
||||||
Total
|
|
$
|
412
|
|
|
|
|
|
|
$
|
138
|
|
|
Three Months Ended March 31,
|
||||||||||||||||
($ per boe)
|
2019
|
2018
|
Increase (Decrease)
|
|
2019
|
2018
|
Increase (Decrease)
|
||||||||||
Production Expense and Production Expense Rate
|
Expense
|
|
Rate
|
||||||||||||||
United States
|
$
|
139
|
|
$
|
151
|
|
(8
|
)%
|
|
$
|
5.21
|
|
$
|
5.89
|
|
(12
|
)%
|
International
|
$
|
50
|
|
$
|
67
|
|
(25
|
)%
|
|
$
|
6.22
|
|
$
|
5.07
|
|
23
|
%
|
|
Three Months Ended March 31,
|
|||||||||
(In millions)
|
2019
|
|
2018
|
|
Increase (Decrease)
|
|||||
Exploration Expenses
|
|
|
|
|
|
|||||
Unproved property impairments
|
$
|
44
|
|
|
$
|
40
|
|
|
10
|
%
|
Dry well costs
|
5
|
|
|
2
|
|
|
150
|
%
|
||
Geological and geophysical
|
6
|
|
|
6
|
|
|
—
|
%
|
||
Other
|
4
|
|
|
4
|
|
|
—
|
%
|
||
Total exploration expenses
|
$
|
59
|
|
|
$
|
52
|
|
|
13
|
%
|
|
Three Months Ended March 31,
|
||||||||||||||||
($ per boe)
|
2019
|
2018
|
Increase (Decrease)
|
|
2019
|
2018
|
Increase (Decrease)
|
||||||||||
DD&A Expense and DD&A Expense Rate
|
Expense
|
|
Rate
|
||||||||||||||
United States
|
$
|
514
|
|
528
|
|
(3
|
)%
|
|
$
|
19.27
|
|
$
|
20.66
|
|
(7
|
)%
|
|
International
|
$
|
34
|
|
$
|
54
|
|
(37
|
)%
|
|
$
|
4.22
|
|
$
|
4.13
|
|
2
|
%
|
|
Three Months Ended March 31,
|
|||||||||
(In millions)
|
2019
|
|
2018
|
|
Increase (Decrease)
|
|||||
United States
|
$
|
132
|
|
|
$
|
125
|
|
|
6
|
%
|
International
|
61
|
|
|
132
|
|
|
(54
|
)%
|
||
Segment income
|
193
|
|
|
257
|
|
|
(25
|
)%
|
||
Items not allocated to segments, net of income taxes
|
(19
|
)
|
|
99
|
|
|
(119
|
)%
|
||
Net income
|
$
|
174
|
|
|
$
|
356
|
|
|
(51
|
)%
|
|
Three Months Ended March 31,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Sources of cash and cash equivalents
|
|
|
|
|
|
||
Operating activities
|
$
|
515
|
|
|
$
|
649
|
|
Disposal of assets, net of cash transferred to the buyer
|
13
|
|
|
1,180
|
|
||
Additions to other assets
|
14
|
|
|
—
|
|
||
Other
|
25
|
|
|
12
|
|
||
Total sources of cash and cash equivalents
|
$
|
567
|
|
|
$
|
1,841
|
|
Uses of cash and cash equivalents
|
|
|
|
||||
Additions to property, plant and equipment
|
$
|
(615
|
)
|
|
$
|
(662
|
)
|
Additions to other assets
|
—
|
|
|
(72
|
)
|
||
Acquisitions, net of cash acquired
|
—
|
|
|
(4
|
)
|
||
Purchases of common stock
|
(30
|
)
|
|
(9
|
)
|
||
Dividends paid
|
(41
|
)
|
|
(42
|
)
|
||
Other
|
(1
|
)
|
|
(2
|
)
|
||
Total uses of cash and cash equivalents
|
$
|
(687
|
)
|
|
$
|
(791
|
)
|
|
Three Months Ended March 31,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
United States
|
$
|
606
|
|
|
$
|
611
|
|
International
|
5
|
|
|
6
|
|
||
Corporate
|
3
|
|
|
5
|
|
||
Total capital expenditures
|
614
|
|
|
622
|
|
||
Change in capital expenditure accrual
|
1
|
|
|
40
|
|
||
Total use of cash and cash equivalents for property, plant and equipment
|
$
|
615
|
|
|
$
|
662
|
|
•
|
conditions in the oil and gas industry, including supply and demand levels for crude oil and condensate, NGLs and natural gas and the resulting impact on price;
|
•
|
changes in expected reserve or production levels;
|
•
|
changes in political and economic conditions in the jurisdictions in which we operate, including changes in foreign currency exchange rates, interest rates, inflation rates, and global and domestic market conditions;
|
•
|
risks related to our hedging activities;
|
•
|
liability resulting from litigation;
|
•
|
capital available for exploration and development;
|
•
|
the inability of any party to satisfy closing conditions or delays in execution with respect to our asset acquisitions and dispositions, including the sale of our U.K. business;
|
•
|
drilling and operating risks;
|
•
|
lack of, or disruption in, access to pipelines or other transportation methods;
|
•
|
well production timing;
|
•
|
availability of drilling rigs, materials and labor, including the costs associated therewith;
|
•
|
difficulty in obtaining necessary approvals and permits;
|
•
|
non-performance by third parties of contractual obligations;
|
•
|
unforeseen hazards such as weather conditions, acts of war or terrorist acts and the governmental or military response thereto;
|
•
|
cyber-attacks;
|
•
|
changes in safety, health, environmental, tax and other regulations;
|
•
|
other geological, operating and economic considerations; and
|
•
|
the risk factors, forward-looking statements and challenges and uncertainties described in our
2018
Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other filings with the SEC.
|
(In millions)
|
Hypothetical Price Increase of 10%
|
|
Hypothetical Price Decrease of 10%
|
||||
Crude oil derivatives
|
$
|
(30
|
)
|
|
$
|
30
|
|
Period
|
Total Number of
Shares
Purchased
(a)
|
|
Average
Price Paid
per Share
|
|
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs
(b)
|
|
Approximate
Dollar Value of
Shares that May
Yet Be Purchased
Under the Plans
or Programs
(b)
|
||||||
01/01/2019
–
01/31/2019
|
6,153
|
|
|
$
|
14.72
|
|
|
—
|
|
|
$
|
800,286,037
|
|
02/01/2019
–
02/28/2019
|
152,607
|
|
|
$
|
16.66
|
|
|
—
|
|
|
$
|
800,286,037
|
|
03/01/2019
–
03/31/2019
|
1,575,353
|
|
|
$
|
17.06
|
|
|
836,025
|
|
|
$
|
786,036,185
|
|
Total
|
1,734,113
|
|
|
$
|
17.02
|
|
|
836,025
|
|
|
|
|
(a)
|
898,088
shares of restricted stock were delivered by employees to Marathon Oil, upon vesting, to satisfy tax withholding requirements.
|
(b)
|
In January 2006, we announced a $2.0 billion share repurchase program. Our Board of Directors subsequently increased the authorization for repurchases under the program by $500 million in January 2007, by $500 million in May 2007, by $2.0 billion in July 2007, and by $1.2 billion in December 2013, for a total authorized amount of $6.2 billion.
|
May 2, 2019
|
|
MARATHON OIL CORPORATION
|
|
|
|
|
By:
|
/s/ Gary E. Wilson
|
|
|
Gary E. Wilson
|
|
|
Vice President, Controller and Chief Accounting Officer
|
|
|
(Duly Authorized Officer)
|
|
|
|
Incorporated by Reference (File No. 001-05153, unless otherwise indicated)
|
|||||
Exhibit Number
|
|
Exhibit Description
|
Form
|
|
Exhibit
|
|
Filing Date
|
|
3.1
|
|
8-K
|
|
3.1
|
|
6/1/2018
|
|
|
3.2
|
|
10-Q
|
|
3.2
|
|
8/4/2016
|
|
|
3.3
|
|
10-K
|
|
3.3
|
|
2/28/2014
|
|
|
4.1
|
|
10-K
|
|
4.2
|
|
2/28/2014
|
|
|
10.1*
|
|
|
|
|
|
|
|
|
10.2*
|
|
|
|
|
|
|
|
|
10.3*
|
|
|
|
|
|
|
|
|
10.4*
|
|
|
|
|
|
|
|
|
10.5*
|
|
|
|
|
|
|
|
|
31.1*
|
|
|
|
|
|
|
|
|
31.2*
|
|
|
|
|
|
|
|
|
32.1*
|
|
|
|
|
|
|
|
|
32.2*
|
|
|
|
|
|
|
|
|
101.INS*
|
|
XBRL Instance Document - the XBRL Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
|
|
|
|
|
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema
|
|
|
|
|
|
|
101.CAL*
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
|
|
|
|
|
101.DEF*
|
|
XBRL Taxonomy Extension Definition Linkbase
|
|
|
|
|
|
|
101.LAB*
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
|
|
|
|
|
101.PRE*
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
|
|
|
|
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*
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1 Year Marathon Oil Chart |
1 Month Marathon Oil Chart |
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