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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 | |
---|---|---|---|---|---|---|---|---|
0.31 | 1.19% | 26.40 | 26.53 | 26.01 | 26.25 | 9,055,755 | 01:00:00 |
(Mark One)
|
|
|
|
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
|
For the Quarterly Period Ended
|
September 30, 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
|
☐
|
Emerging growth company
|
☐
|
|
|
|
Table of Contents
|
|
|
|
Page
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
(In millions, except per share data)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenues and other income:
|
|
|
|
|
|
|
|
||||||||
Revenues from contracts with customers
|
$
|
1,249
|
|
|
$
|
1,538
|
|
|
$
|
3,830
|
|
|
$
|
4,522
|
|
Net gain (loss) on commodity derivatives
|
47
|
|
|
(70
|
)
|
|
(28
|
)
|
|
(324
|
)
|
||||
Income from equity method investments
|
21
|
|
|
64
|
|
|
63
|
|
|
161
|
|
||||
Net gain on disposal of assets
|
22
|
|
|
16
|
|
|
56
|
|
|
323
|
|
||||
Other income
|
6
|
|
|
119
|
|
|
54
|
|
|
135
|
|
||||
Total revenues and other income
|
1,345
|
|
|
1,667
|
|
|
3,975
|
|
|
4,817
|
|
||||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|||||
Production
|
163
|
|
|
215
|
|
|
543
|
|
|
637
|
|
||||
Shipping, handling and other operating
|
138
|
|
|
152
|
|
|
462
|
|
|
408
|
|
||||
Exploration
|
22
|
|
|
56
|
|
|
107
|
|
|
173
|
|
||||
Depreciation, depletion and amortization
|
622
|
|
|
626
|
|
|
1,781
|
|
|
1,828
|
|
||||
Impairments
|
—
|
|
|
8
|
|
|
24
|
|
|
50
|
|
||||
Taxes other than income
|
81
|
|
|
86
|
|
|
232
|
|
|
215
|
|
||||
General and administrative
|
82
|
|
|
101
|
|
|
263
|
|
|
306
|
|
||||
Total costs and expenses
|
1,108
|
|
|
1,244
|
|
|
3,412
|
|
|
3,617
|
|
||||
Income from operations
|
237
|
|
|
423
|
|
|
563
|
|
|
1,200
|
|
||||
Net interest and other
|
(64
|
)
|
|
(58
|
)
|
|
(177
|
)
|
|
(168
|
)
|
||||
Other net periodic benefit costs
|
2
|
|
|
(8
|
)
|
|
9
|
|
|
(11
|
)
|
||||
Income before income taxes
|
175
|
|
|
357
|
|
|
395
|
|
|
1,021
|
|
||||
Provision (benefit) for income taxes
|
10
|
|
|
103
|
|
|
(105
|
)
|
|
315
|
|
||||
Net income
|
$
|
165
|
|
|
$
|
254
|
|
|
$
|
500
|
|
|
$
|
706
|
|
Net income per share:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
$
|
0.21
|
|
|
$
|
0.30
|
|
|
$
|
0.62
|
|
|
$
|
0.83
|
|
Diluted
|
$
|
0.21
|
|
|
$
|
0.30
|
|
|
$
|
0.62
|
|
|
$
|
0.83
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
802
|
|
|
848
|
|
|
813
|
|
|
852
|
|
||||
Diluted
|
803
|
|
|
849
|
|
|
813
|
|
|
853
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income
|
$
|
165
|
|
|
$
|
254
|
|
|
$
|
500
|
|
|
$
|
706
|
|
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
|
|
|
|
|||||
Postretirement and postemployment plans:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Change in actuarial gain (loss) in postretirement and postemployment plans
|
77
|
|
|
20
|
|
|
64
|
|
|
37
|
|
||||
Income tax provision
|
(39
|
)
|
|
—
|
|
|
(39
|
)
|
|
—
|
|
||||
Postretirement and postemployment plans, net of tax
|
38
|
|
|
20
|
|
|
25
|
|
|
37
|
|
||||
Foreign currency translation:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment related to sale of U.K. business
|
30
|
|
|
—
|
|
|
30
|
|
|
—
|
|
||||
Income tax provision
|
(7
|
)
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
||||
Foreign currency translation, net of tax
|
23
|
|
|
—
|
|
|
23
|
|
|
—
|
|
||||
Other, net of tax
|
1
|
|
|
—
|
|
|
1
|
|
|
4
|
|
||||
Other comprehensive income
|
62
|
|
|
20
|
|
|
49
|
|
|
41
|
|
||||
Comprehensive income
|
$
|
227
|
|
|
$
|
274
|
|
|
$
|
549
|
|
|
$
|
747
|
|
|
September 30,
|
|
December 31,
|
||||
(In millions, except par value and share amounts)
|
2019
|
|
2018
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,165
|
|
|
$
|
1,462
|
|
Receivables, less reserve of $12 and $11
|
1,148
|
|
|
1,079
|
|
||
Inventories
|
71
|
|
|
96
|
|
||
Other current assets
|
136
|
|
|
257
|
|
||
Current assets held for sale
|
—
|
|
|
27
|
|
||
Total current assets
|
2,520
|
|
|
2,921
|
|
||
Equity method investments
|
667
|
|
|
745
|
|
||
Property, plant and equipment, less accumulated depreciation, depletion and amortization of $17,366 and $21,830
|
16,717
|
|
|
16,804
|
|
||
Goodwill
|
95
|
|
|
97
|
|
||
Other noncurrent assets
|
374
|
|
|
723
|
|
||
Noncurrent assets held for sale
|
—
|
|
|
31
|
|
||
Total assets
|
$
|
20,373
|
|
|
$
|
21,321
|
|
Liabilities
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
1,374
|
|
|
$
|
1,320
|
|
Payroll and benefits payable
|
92
|
|
|
154
|
|
||
Accrued taxes
|
86
|
|
|
181
|
|
||
Other current liabilities
|
227
|
|
|
170
|
|
||
Long-term debt due within one year
|
600
|
|
|
—
|
|
||
Current liabilities held for sale
|
—
|
|
|
7
|
|
||
Total current liabilities
|
2,379
|
|
|
1,832
|
|
||
Long-term debt
|
4,903
|
|
|
5,499
|
|
||
Deferred tax liabilities
|
183
|
|
|
199
|
|
||
Defined benefit postretirement plan obligations
|
174
|
|
|
195
|
|
||
Asset retirement obligations
|
198
|
|
|
1,081
|
|
||
Deferred credits and other liabilities
|
265
|
|
|
279
|
|
||
Noncurrent liabilities held for sale
|
—
|
|
|
108
|
|
||
Total liabilities
|
8,102
|
|
|
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 (par value $1 per share, 1.925 billion shares authorized at September 30, 2019 and December 31, 2018)
|
937
|
|
|
937
|
|
||
Held in treasury, at cost – 136 million shares and 118 million shares
|
(4,028
|
)
|
|
(3,816
|
)
|
||
Additional paid-in capital
|
7,197
|
|
|
7,238
|
|
||
Retained earnings
|
8,053
|
|
|
7,706
|
|
||
Accumulated other comprehensive income
|
112
|
|
|
63
|
|
||
Total stockholders’ equity
|
12,271
|
|
|
12,128
|
|
||
Total liabilities and stockholders’ equity
|
$
|
20,373
|
|
|
$
|
21,321
|
|
|
Nine Months Ended
|
||||||
|
September 30,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Increase (decrease) in cash and cash equivalents
|
|
|
|
||||
Operating activities:
|
|
|
|
|
|
||
Net income
|
$
|
500
|
|
|
$
|
706
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||
Depreciation, depletion and amortization
|
1,781
|
|
|
1,828
|
|
||
Impairments
|
24
|
|
|
50
|
|
||
Exploratory dry well costs and unproved property impairments
|
85
|
|
|
144
|
|
||
Net gain on disposal of assets
|
(56
|
)
|
|
(323
|
)
|
||
Deferred income taxes
|
(34
|
)
|
|
62
|
|
||
Net loss on derivative instruments
|
28
|
|
|
324
|
|
||
Net settlements of derivative instruments
|
41
|
|
|
(255
|
)
|
||
Pension and other post retirement benefits, net
|
(51
|
)
|
|
(60
|
)
|
||
Stock-based compensation
|
45
|
|
|
44
|
|
||
Equity method investments, net
|
26
|
|
|
42
|
|
||
Changes in:
|
|
|
|
|
|||
Current receivables
|
(99
|
)
|
|
(389
|
)
|
||
Inventories
|
4
|
|
|
(11
|
)
|
||
Current accounts payable and accrued liabilities
|
(164
|
)
|
|
334
|
|
||
Other current assets and liabilities
|
108
|
|
|
—
|
|
||
All other operating, net
|
(189
|
)
|
|
(117
|
)
|
||
Net cash provided by operating activities
|
2,049
|
|
|
2,379
|
|
||
Investing activities:
|
|
|
|
|
|
||
Additions to property, plant and equipment
|
(1,934
|
)
|
|
(2,069
|
)
|
||
Additions to other assets
|
41
|
|
|
(135
|
)
|
||
Acquisitions, net of cash acquired
|
—
|
|
|
(25
|
)
|
||
Disposal of assets, net of cash transferred to the buyer
|
(84
|
)
|
|
1,249
|
|
||
Equity method investments - return of capital
|
51
|
|
|
48
|
|
||
All other investing, net
|
2
|
|
|
11
|
|
||
Net cash used in investing activities
|
(1,924
|
)
|
|
(921
|
)
|
||
Financing activities:
|
|
|
|
|
|
||
Purchases of common stock
|
(296
|
)
|
|
(349
|
)
|
||
Dividends paid
|
(122
|
)
|
|
(128
|
)
|
||
All other financing, net
|
(4
|
)
|
|
22
|
|
||
Net cash used in financing activities
|
(422
|
)
|
|
(455
|
)
|
||
Effect of exchange rate on cash and cash equivalents
|
—
|
|
|
(2
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
(297
|
)
|
|
1,001
|
|
||
Cash and cash equivalents at beginning of period
|
1,462
|
|
|
563
|
|
||
Cash and cash equivalents at end of period
|
$
|
1,165
|
|
|
$
|
1,564
|
|
|
|
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
|
||||||||||||||
Nine Months Ended September 30, 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
|
|
Shares issued - stock-based compensation
|
|
—
|
|
|
—
|
|
|
40
|
|
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
25
|
|
|||||||
Shares repurchased
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
96
|
|
|
—
|
|
|
96
|
|
|||||||
Other comprehensive income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|
17
|
|
|||||||
Dividends paid (per share amount of $0.05)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(43
|
)
|
|
—
|
|
|
(43
|
)
|
|||||||
June 30, 2018 Balance
|
|
$
|
—
|
|
|
$
|
937
|
|
|
$
|
(3,137
|
)
|
|
$
|
7,227
|
|
|
$
|
7,146
|
|
|
$
|
(41
|
)
|
|
$
|
12,132
|
|
Shares issued - stock-based compensation
|
|
—
|
|
|
—
|
|
|
21
|
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
14
|
|
|||||||
Shares repurchased
|
|
—
|
|
|
—
|
|
|
(339
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(339
|
)
|
|||||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
254
|
|
|
—
|
|
|
254
|
|
|||||||
Other comprehensive income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20
|
|
|
20
|
|
|||||||
Dividends paid (per share amount of $0.05)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(43
|
)
|
|
—
|
|
|
(43
|
)
|
|||||||
September 30, 2018 Balance
|
|
$
|
—
|
|
|
$
|
937
|
|
|
$
|
(3,455
|
)
|
|
$
|
7,226
|
|
|
$
|
7,357
|
|
|
$
|
(21
|
)
|
|
$
|
12,044
|
|
|
|
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
|
||||||||||||||
Nine Months Ended September 30, 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 (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
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
|
|
Shares issued - stock-based compensation
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
5
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||||
Shares repurchased
|
|
—
|
|
|
—
|
|
|
(236
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(236
|
)
|
|||||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
161
|
|
|
—
|
|
|
161
|
|
|||||||
Other comprehensive income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
(9
|
)
|
|||||||
Dividends paid (per share amount of $0.05)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(41
|
)
|
|
—
|
|
|
(41
|
)
|
|||||||
June 30, 2019 Balance
|
|
$
|
—
|
|
|
$
|
937
|
|
|
$
|
(3,984
|
)
|
|
$
|
7,170
|
|
|
$
|
7,928
|
|
|
$
|
50
|
|
|
$
|
12,101
|
|
Shares issued - stock-based compensation
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
|
9
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|||||||
Shares repurchased
|
|
—
|
|
|
—
|
|
|
(30
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(30
|
)
|
|||||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18
|
|
|
—
|
|
|
—
|
|
|
18
|
|
|||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
165
|
|
|
—
|
|
|
165
|
|
|||||||
Other comprehensive income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
62
|
|
|
62
|
|
|||||||
Dividends paid (per share amount of $0.05)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(40
|
)
|
|
—
|
|
|
(40
|
)
|
|||||||
September 30, 2019 Balance
|
|
$
|
—
|
|
|
$
|
937
|
|
|
$
|
(4,028
|
)
|
|
$
|
7,197
|
|
|
$
|
8,053
|
|
|
$
|
112
|
|
|
$
|
12,271
|
|
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.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In millions, except per share data)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income
|
$
|
165
|
|
|
$
|
254
|
|
|
$
|
500
|
|
|
$
|
706
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding
|
802
|
|
|
848
|
|
|
813
|
|
|
852
|
|
||||
Effect of dilutive securities
|
1
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Weighted average common shares, diluted
|
803
|
|
|
849
|
|
|
813
|
|
|
853
|
|
||||
Net income per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.21
|
|
|
$
|
0.30
|
|
|
$
|
0.62
|
|
|
$
|
0.83
|
|
Diluted
|
$
|
0.21
|
|
|
$
|
0.30
|
|
|
$
|
0.62
|
|
|
$
|
0.83
|
|
|
|
|
|
|
|
|
|
||||||||
Dividends per share
|
$
|
0.05
|
|
|
$
|
0.05
|
|
|
$
|
0.15
|
|
|
$
|
0.15
|
|
|
Three Months Ended September 30, 2019
|
||||||||||||||||||||||
(In millions)
|
Eagle Ford
|
|
Bakken
|
|
Oklahoma
|
|
Northern Delaware
|
|
Other U.S.
|
|
Total
|
||||||||||||
Crude oil and condensate
|
$
|
336
|
|
|
$
|
452
|
|
|
$
|
116
|
|
|
$
|
88
|
|
|
$
|
25
|
|
|
$
|
1,017
|
|
Natural gas liquids
|
23
|
|
|
6
|
|
|
28
|
|
|
5
|
|
|
2
|
|
|
64
|
|
||||||
Natural gas
|
28
|
|
|
8
|
|
|
37
|
|
|
3
|
|
|
5
|
|
|
81
|
|
||||||
Other
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
10
|
|
||||||
Revenues from contracts with customers
|
$
|
388
|
|
|
$
|
466
|
|
|
$
|
181
|
|
|
$
|
96
|
|
|
$
|
41
|
|
|
$
|
1,172
|
|
|
Three Months Ended September 30, 2018
|
||||||||||||||||||||||
(In millions)
|
Eagle Ford
|
|
Bakken
|
|
Oklahoma
|
|
Northern Delaware
|
|
Other U.S.
|
|
Total
|
||||||||||||
Crude oil and condensate
|
$
|
436
|
|
|
$
|
447
|
|
|
$
|
114
|
|
|
$
|
59
|
|
|
$
|
34
|
|
|
$
|
1,090
|
|
Natural gas liquids
|
70
|
|
|
19
|
|
|
48
|
|
|
12
|
|
|
3
|
|
|
152
|
|
||||||
Natural gas
|
36
|
|
|
9
|
|
|
46
|
|
|
6
|
|
|
5
|
|
|
102
|
|
||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
3
|
|
||||||
Revenues from contracts with customers
|
$
|
542
|
|
|
$
|
475
|
|
|
$
|
208
|
|
|
$
|
77
|
|
|
$
|
45
|
|
|
$
|
1,347
|
|
|
Nine Months Ended September 30, 2019
|
||||||||||||||||||||||
(In millions)
|
Eagle Ford
|
|
Bakken
|
|
Oklahoma
|
|
Northern Delaware
|
|
Other U.S.
|
|
Total
|
||||||||||||
Crude oil and condensate
|
$
|
1,004
|
|
|
$
|
1,277
|
|
|
$
|
304
|
|
|
$
|
229
|
|
|
$
|
83
|
|
|
$
|
2,897
|
|
Natural gas liquids
|
88
|
|
|
31
|
|
|
81
|
|
|
20
|
|
|
5
|
|
|
225
|
|
||||||
Natural gas
|
94
|
|
|
26
|
|
|
118
|
|
|
10
|
|
|
15
|
|
|
263
|
|
||||||
Other
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45
|
|
|
49
|
|
||||||
Revenues from contracts with customers
|
$
|
1,190
|
|
|
$
|
1,334
|
|
|
$
|
503
|
|
|
$
|
259
|
|
|
$
|
148
|
|
|
$
|
3,434
|
|
|
Nine Months Ended September 30, 2018
|
||||||||||||||||||||||
(In millions)
|
Eagle Ford
|
|
Bakken
|
|
Oklahoma
|
|
Northern Delaware
|
|
Other U.S.
|
|
Total
|
||||||||||||
Crude oil and condensate
|
$
|
1,196
|
|
|
$
|
1,182
|
|
|
$
|
340
|
|
|
$
|
173
|
|
|
$
|
131
|
|
|
$
|
3,022
|
|
Natural gas liquids
|
157
|
|
|
51
|
|
|
130
|
|
|
24
|
|
|
8
|
|
|
370
|
|
||||||
Natural gas
|
102
|
|
|
27
|
|
|
127
|
|
|
13
|
|
|
17
|
|
|
286
|
|
||||||
Other
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
15
|
|
||||||
Revenues from contracts with customers
|
$
|
1,458
|
|
|
$
|
1,260
|
|
|
$
|
597
|
|
|
$
|
210
|
|
|
$
|
168
|
|
|
$
|
3,693
|
|
|
Three Months Ended September 30, 2019
|
||||||||||||||
(In millions)
|
E.G.
|
|
U.K.
|
|
Other International
|
|
Total
|
||||||||
Crude oil and condensate
|
$
|
67
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
67
|
|
Natural gas liquids
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Natural gas
|
8
|
|
|
—
|
|
|
—
|
|
|
8
|
|
||||
Revenues from contracts with customers
|
$
|
77
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
77
|
|
|
Three Months Ended September 30, 2018
|
||||||||||||||
(In millions)
|
E.G.
|
|
U.K.
|
|
Other International
|
|
Total
|
||||||||
Crude oil and condensate
|
$
|
100
|
|
|
$
|
41
|
|
|
$
|
20
|
|
|
$
|
161
|
|
Natural gas liquids
|
1
|
|
|
1
|
|
|
—
|
|
|
2
|
|
||||
Natural gas
|
9
|
|
|
11
|
|
|
—
|
|
|
20
|
|
||||
Other
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
||||
Revenues from contracts with customers
|
$
|
110
|
|
|
$
|
61
|
|
|
$
|
20
|
|
|
$
|
191
|
|
|
Nine Months Ended September 30, 2019
|
||||||||||||||
(In millions)
|
E.G.
|
|
U.K.
|
|
Other International
|
|
Total
|
||||||||
Crude oil and condensate
|
$
|
215
|
|
|
$
|
107
|
|
|
$
|
19
|
|
|
$
|
341
|
|
Natural gas liquids
|
3
|
|
|
1
|
|
|
—
|
|
|
4
|
|
||||
Natural gas
|
24
|
|
|
12
|
|
|
—
|
|
|
36
|
|
||||
Other
|
1
|
|
|
14
|
|
|
—
|
|
|
15
|
|
||||
Revenues from contracts with customers
|
$
|
243
|
|
|
$
|
134
|
|
|
$
|
19
|
|
|
$
|
396
|
|
|
Nine Months Ended September 30, 2018
|
||||||||||||||||||
(In millions)
|
E.G.
|
|
U.K.
|
|
Libya
|
|
Other International
|
|
Total
|
||||||||||
Crude oil and condensate
|
$
|
271
|
|
|
$
|
207
|
|
|
$
|
187
|
|
|
$
|
65
|
|
|
$
|
730
|
|
Natural gas liquids
|
3
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|||||
Natural gas
|
28
|
|
|
31
|
|
|
9
|
|
|
—
|
|
|
68
|
|
|||||
Other
|
—
|
|
|
24
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|||||
Revenues from contracts with customers
|
$
|
302
|
|
|
$
|
266
|
|
|
$
|
196
|
|
|
$
|
65
|
|
|
$
|
829
|
|
(In millions)
|
September 30, 2019
|
January 1, 2019
|
||||
Receivables from contracts with customers, included in receivables, less reserves
|
$
|
822
|
|
$
|
714
|
|
Contract asset (liability)
|
$
|
—
|
|
$
|
(1
|
)
|
(In millions)
|
Nine Months Ended September 30, 2019
|
||
Contract asset (liability) balance as of January 1, 2019
|
$
|
(1
|
)
|
Revenue recognized as performance obligations are satisfied
|
74
|
|
|
Amounts invoiced to customers
|
(52
|
)
|
|
Contract asset (liability) transferred to buyer(a)
|
(21
|
)
|
|
Contract asset (liability) balance as of September 30, 2019
|
$
|
—
|
|
(a)
|
•
|
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 as well as produces and markets products manufactured from natural gas, such as LNG and methanol, in Equatorial Guinea (“E.G.”)
|
|
Three Months Ended September 30, 2019
|
||||||||||||||
(In millions)
|
U.S.
|
|
Int’l
|
|
Not Allocated to Segments
|
|
Total
|
||||||||
Revenues from contracts with customers
|
$
|
1,172
|
|
|
$
|
77
|
|
|
$
|
—
|
|
|
$
|
1,249
|
|
Net gain (loss) on commodity derivatives
|
14
|
|
|
—
|
|
|
33
|
|
(b)
|
47
|
|
||||
Income from equity method investments
|
—
|
|
|
21
|
|
|
—
|
|
|
21
|
|
||||
Net gain on disposal of assets
|
—
|
|
|
—
|
|
|
22
|
|
(c)
|
22
|
|
||||
Other income
|
3
|
|
|
2
|
|
|
1
|
|
|
6
|
|
||||
Less costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Production
|
147
|
|
|
16
|
|
|
—
|
|
|
163
|
|
||||
Shipping, handling and other operating
|
137
|
|
|
1
|
|
|
—
|
|
|
138
|
|
||||
Exploration
|
22
|
|
|
—
|
|
|
—
|
|
|
22
|
|
||||
Depreciation, depletion and amortization
|
589
|
|
|
25
|
|
|
8
|
|
|
622
|
|
||||
Taxes other than income
|
80
|
|
|
—
|
|
|
1
|
|
|
81
|
|
||||
General and administrative
|
34
|
|
|
5
|
|
|
43
|
|
|
82
|
|
||||
Net interest and other
|
—
|
|
|
—
|
|
|
64
|
|
|
64
|
|
||||
Other net periodic benefit costs
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
||||
Income tax provision
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
||||
Segment income (loss)
|
$
|
180
|
|
|
$
|
43
|
|
|
$
|
(58
|
)
|
|
$
|
165
|
|
Capital expenditures(a)
|
$
|
667
|
|
|
$
|
1
|
|
|
$
|
7
|
|
|
$
|
675
|
|
(a)
|
Includes accruals.
|
(b)
|
(c)
|
|
Three Months Ended September 30, 2018
|
||||||||||||||
(In millions)
|
U.S.
|
|
Int’l
|
|
Not Allocated to Segments
|
|
Total
|
||||||||
Revenues from contracts with customers
|
$
|
1,347
|
|
|
$
|
191
|
|
|
$
|
—
|
|
|
$
|
1,538
|
|
Net gain (loss) on commodity derivatives
|
(89
|
)
|
|
—
|
|
|
19
|
|
(b)
|
(70
|
)
|
||||
Income from equity method investments
|
—
|
|
|
64
|
|
|
—
|
|
|
64
|
|
||||
Net gain on disposal of assets
|
—
|
|
|
—
|
|
|
16
|
|
(c)
|
16
|
|
||||
Other income
|
2
|
|
|
4
|
|
|
113
|
|
(d)
|
119
|
|
||||
Less costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Production
|
172
|
|
|
43
|
|
|
—
|
|
|
215
|
|
||||
Shipping, handling and other operating
|
136
|
|
|
16
|
|
|
—
|
|
|
152
|
|
||||
Exploration
|
55
|
|
|
1
|
|
|
—
|
|
|
56
|
|
||||
Depreciation, depletion and amortization
|
571
|
|
|
49
|
|
|
6
|
|
|
626
|
|
||||
Impairments
|
—
|
|
|
—
|
|
|
8
|
|
(e)
|
8
|
|
||||
Taxes other than income
|
86
|
|
|
—
|
|
|
—
|
|
|
86
|
|
||||
General and administrative
|
37
|
|
|
7
|
|
|
57
|
|
|
101
|
|
||||
Net interest and other
|
—
|
|
|
—
|
|
|
58
|
|
|
58
|
|
||||
Other net periodic benefit costs
|
—
|
|
|
(3
|
)
|
|
11
|
|
(f)
|
8
|
|
||||
Income tax provision
|
2
|
|
|
30
|
|
|
71
|
|
|
103
|
|
||||
Segment income (loss)
|
$
|
201
|
|
|
$
|
116
|
|
|
$
|
(63
|
)
|
|
$
|
254
|
|
Capital expenditures(a)
|
$
|
691
|
|
|
$
|
6
|
|
|
$
|
7
|
|
|
$
|
704
|
|
(a)
|
Includes accruals.
|
(b)
|
(c)
|
Sales of certain non-core proved properties in our International and United States segments.
|
(d)
|
(e)
|
(f)
|
|
Nine Months Ended September 30, 2019
|
||||||||||||||
(In millions)
|
U.S.
|
|
Int’l
|
|
Not Allocated to Segments
|
|
Total
|
||||||||
Revenues from contracts with customers
|
$
|
3,434
|
|
|
$
|
396
|
|
|
$
|
—
|
|
|
$
|
3,830
|
|
Net gain (loss) on commodity derivatives
|
41
|
|
|
—
|
|
|
(69
|
)
|
(b)
|
(28
|
)
|
||||
Income from equity method investments
|
—
|
|
|
63
|
|
|
—
|
|
|
63
|
|
||||
Net gain on disposal of assets
|
—
|
|
|
—
|
|
|
56
|
|
(c)
|
56
|
|
||||
Other income
|
8
|
|
|
7
|
|
|
39
|
|
(d)
|
54
|
|
||||
Less costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Production
|
433
|
|
|
112
|
|
|
(2
|
)
|
|
543
|
|
||||
Shipping, handling and other operating
|
424
|
|
|
24
|
|
|
14
|
|
|
462
|
|
||||
Exploration
|
107
|
|
|
—
|
|
|
—
|
|
|
107
|
|
||||
Depreciation, depletion and amortization
|
1,664
|
|
|
97
|
|
|
20
|
|
|
1,781
|
|
||||
Impairments
|
—
|
|
|
—
|
|
|
24
|
|
(e)
|
24
|
|
||||
Taxes other than income
|
233
|
|
|
—
|
|
|
(1
|
)
|
|
232
|
|
||||
General and administrative
|
94
|
|
|
20
|
|
|
149
|
|
|
263
|
|
||||
Net interest and other
|
—
|
|
|
—
|
|
|
177
|
|
|
177
|
|
||||
Other net periodic benefit costs
|
—
|
|
|
(3
|
)
|
|
(6
|
)
|
|
(9
|
)
|
||||
Income tax provision (benefit)
|
1
|
|
|
16
|
|
|
(122
|
)
|
(f)
|
(105
|
)
|
||||
Segment income (loss)
|
$
|
527
|
|
|
$
|
200
|
|
|
$
|
(227
|
)
|
|
$
|
500
|
|
Capital expenditures(a)
|
$
|
1,959
|
|
|
$
|
16
|
|
|
$
|
15
|
|
|
$
|
1,990
|
|
(a)
|
Includes accruals.
|
(b)
|
(c)
|
Primarily related to the sale of our working interest in the Droshky field (Gulf of Mexico) and the sale of our U.K. business (See Note 5).
|
(d)
|
Primarily related to the indemnification of certain tax liabilities in connection with the 2010-2011 Federal Tax Audit (See Note 8).
|
(e)
|
Primarily a result of anticipated sales of non-core proved properties in our International and United States segments (See Note 11).
|
(f)
|
|
Nine Months Ended September 30, 2018
|
||||||||||||||
(In millions)
|
U.S.
|
|
Int’l
|
|
Not Allocated to Segments
|
|
Total
|
||||||||
Revenue from contracts with customers
|
$
|
3,693
|
|
|
$
|
829
|
|
|
$
|
—
|
|
|
$
|
4,522
|
|
Net gain (loss) on commodity derivatives
|
(255
|
)
|
|
—
|
|
|
(69
|
)
|
(b)
|
(324
|
)
|
||||
Income from equity method investments
|
—
|
|
|
161
|
|
|
—
|
|
|
161
|
|
||||
Net gain on disposal of assets
|
—
|
|
|
—
|
|
|
323
|
|
(c)
|
323
|
|
||||
Other income
|
7
|
|
|
7
|
|
|
121
|
|
(d)
|
135
|
|
||||
Less costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Production
|
476
|
|
|
162
|
|
|
(1
|
)
|
|
637
|
|
||||
Shipping, handling and other operating
|
364
|
|
|
45
|
|
|
(1
|
)
|
|
408
|
|
||||
Exploration
|
170
|
|
|
3
|
|
|
—
|
|
|
173
|
|
||||
Depreciation, depletion and amortization
|
1,655
|
|
|
153
|
|
|
20
|
|
|
1,828
|
|
||||
Impairments
|
—
|
|
|
—
|
|
|
50
|
|
(e)
|
50
|
|
||||
Taxes other than income
|
218
|
|
|
—
|
|
|
(3
|
)
|
|
215
|
|
||||
General and administrative
|
108
|
|
|
25
|
|
|
173
|
|
|
306
|
|
||||
Net interest and other
|
—
|
|
|
—
|
|
|
168
|
|
|
168
|
|
||||
Other net periodic benefit costs
|
—
|
|
|
(7
|
)
|
|
18
|
|
(f)
|
11
|
|
||||
Income tax provision
|
5
|
|
|
226
|
|
|
84
|
|
|
315
|
|
||||
Segment income (loss)
|
$
|
449
|
|
|
$
|
390
|
|
|
$
|
(133
|
)
|
|
$
|
706
|
|
Capital expenditures(a)
|
$
|
1,943
|
|
|
$
|
28
|
|
|
$
|
17
|
|
|
$
|
1,988
|
|
(a)
|
Includes accruals.
|
(b)
|
(c)
|
(d)
|
(e)
|
Due to the anticipated sales of certain non-core proved properties in our International and United States segments (See Note 11).
|
(f)
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Effective income tax expense (benefit) rate(a)
|
6
|
%
|
|
29
|
%
|
|
(27
|
)%
|
|
31
|
%
|
(a)
|
In all periods presented, we maintained our valuation allowance on our net federal deferred tax assets in the U.S.
|
•
|
Income taxes for the third quarter of 2019 were impacted by the income mix between domestic and international operations. Income taxes for the nine months ended September 30, 2019 were impacted by the settlement of the 2010-2011 U.S. Federal Tax Audit (“IRS Audit”) in the first quarter of 2019, resulting in a tax benefit of $126 million. Additionally, in the first quarter of 2019, 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 nine months of 2019. Excluding these discrete adjustments, the effective income tax rate for the first nine months of 2019 was an expense of 10%.
|
•
|
Income taxes for the third quarter of 2018 were impacted by deferred tax expense in the U.K. During the nine months ended September 30, 2018, income taxes were impacted by the tax expense in Libya of $162 million.
|
(In millions)
|
September 30, 2019
|
|
December 31, 2018
|
||||
Crude oil and natural gas
|
$
|
9
|
|
|
$
|
11
|
|
Supplies and other items
|
62
|
|
|
85
|
|
||
Inventories
|
$
|
71
|
|
|
$
|
96
|
|
(In millions)
|
September 30, 2019
|
|
December 31, 2018
|
||||
United States
|
$
|
16,127
|
|
|
$
|
16,011
|
|
International
|
512
|
|
|
710
|
|
||
Corporate
|
78
|
|
|
83
|
|
||
Net property, plant and equipment
|
$
|
16,717
|
|
|
$
|
16,804
|
|
|
Nine Months Ended September 30,
|
||||||||||||||
|
2019
|
|
2018
|
||||||||||||
(In millions)
|
Fair Value
|
|
Impairment
|
|
Fair Value
|
|
Impairment
|
||||||||
Long-lived assets held for use
|
$
|
56
|
|
|
$
|
24
|
|
|
$
|
108
|
|
|
$
|
50
|
|
•
|
2019 – During the nine months ended September 30, 2019, we recorded pre-tax non-cash proved property impairments of $24 million, primarily as a result of anticipated sales for certain non-core proved properties in our United States segment and the sale of our non-operated interest in the Atrush block (Kurdistan) in our International segment. 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 5 for further detail.
|
•
|
2018 – During the nine months ended September 30, 2018, we recorded pre-tax non-cash proved property impairments of $50 million, to a fair value of $108 million, primarily as a result of anticipated sales for certain non-core proved properties in our International and United States segments. The related fair value measurement utilized the market approach, based upon anticipated sales proceeds less costs to sell which resulted in a Level 2 classification.
|
|
September 30,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Beginning balance
|
$
|
1,145
|
|
|
$
|
1,483
|
|
Incurred liabilities, including acquisitions
|
25
|
|
|
10
|
|
||
Settled liabilities, including dispositions
|
(1,106
|
)
|
|
(105
|
)
|
||
Accretion expense (included in depreciation, depletion and amortization)
|
29
|
|
|
53
|
|
||
Revisions of estimates
|
15
|
|
|
(130
|
)
|
||
Held for sale
|
108
|
|
|
(10
|
)
|
||
Ending balance
|
$
|
216
|
|
|
$
|
1,301
|
|
•
|
Settled liabilities primarily relates to the sale of our U.K. business, which closed during the third quarter of 2019.
|
•
|
Held for sale reflects a transfer to settled liabilities during 2019. This transfer was primarily related to the Droshky field (Gulf of Mexico), which was considered held for sale at year-end 2018 and closed in the first quarter of 2019.
|
•
|
Ending balance includes $18 million classified as short-term at September 30, 2019.
|
•
|
Settled liabilities primarily relate to the sale of non-core, non-operated conventional properties in the Gulf of Mexico as well as retirements in the U.K. See Note 5 for discussion of these divestitures in further detail.
|
•
|
Revisions of estimates were primarily due to the acceleration of U.K. abandonment activities to capture favorable market conditions and lower estimated abandonment costs.
|
•
|
Ending balance includes $58 million classified as short-term at September 30, 2018.
|
(In millions)
|
|
September 30, 2019
|
||
Operating Leases:
|
Balance Sheet Location:
|
|
||
ROU asset
|
Other noncurrent assets
|
$
|
226
|
|
Current portion of long-term lease liability
|
Other current liabilities
|
$
|
104
|
|
Long-term lease liability
|
Deferred credits and other liabilities
|
$
|
127
|
|
•
|
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.
|
(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 one 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 first nine months of 2019. This amount is then amortized as we utilize the ROU asset, the net effect of which is the ending ROU asset of $226 million (first table above).
|
(In millions)
|
Operating Lease Obligations
|
||
2019
|
$
|
35
|
|
2020
|
107
|
|
|
2021
|
62
|
|
|
2022
|
34
|
|
|
2023
|
4
|
|
|
Thereafter
|
1
|
|
|
Total undiscounted lease payments
|
$
|
243
|
|
Less: amount representing interest
|
12
|
|
|
Total operating lease liabilities
|
$
|
231
|
|
Less: current portion of long-term lease liability as of September 30, 2019
|
104
|
|
|
Long-term lease liability as of September 30, 2019
|
$
|
127
|
|
(In millions)
|
Operating Lease Obligations
|
||
2019
|
$
|
62
|
|
2020
|
54
|
|
|
2021
|
35
|
|
|
2022
|
12
|
|
|
2023
|
5
|
|
|
Thereafter
|
49
|
|
|
Sublease rentals
|
—
|
|
|
Total minimum lease payments
|
$
|
217
|
|
(In millions)
|
Operating Lease Future Cash Receipts
|
||
2019
|
$
|
2
|
|
2020
|
6
|
|
|
2021
|
6
|
|
|
2022
|
6
|
|
|
2023
|
6
|
|
|
Thereafter
|
67
|
|
|
Total undiscounted cash flows
|
$
|
93
|
|
|
September 30, 2019
|
|
|
||||||||||
(In millions)
|
Asset
|
|
Liability
|
|
Net Asset (Liability)
|
|
Balance Sheet Location
|
||||||
Not Designated as Hedges
|
|
|
|
|
|
|
|
||||||
Commodity
|
$
|
58
|
|
|
$
|
5
|
|
|
$
|
53
|
|
|
Other current assets
|
Commodity
|
6
|
|
|
—
|
|
|
6
|
|
|
Other noncurrent assets
|
|||
Commodity
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
Deferred credits and other liabilities
|
|||
Total Not Designated as Hedges
|
$
|
64
|
|
|
$
|
6
|
|
|
$
|
58
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cash Flow Hedges
|
|
|
|
|
|
|
|||||||
Interest Rate
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
(1
|
)
|
|
Deferred credits and other liabilities
|
Total Designated Hedges
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
(1
|
)
|
|
|
Total
|
$
|
64
|
|
|
$
|
7
|
|
|
$
|
57
|
|
|
|
|
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
|
|
Fourth Quarter
|
|
Full Year
|
|
Full Year
|
||||||
NYMEX WTI Three-Way Collars
|
|
|
|
|
|
|
||||||
Volume (Bbls/day)
|
|
80,000
|
|
|
42,945
|
|
|
—
|
|
|||
Weighted average price per Bbl:
|
|
|
|
|
|
|
||||||
Ceiling
|
|
$
|
74.19
|
|
|
$
|
65.58
|
|
|
$
|
—
|
|
Floor
|
|
$
|
56.75
|
|
|
$
|
55.00
|
|
|
$
|
—
|
|
Sold put
|
|
$
|
49.50
|
|
|
$
|
47.77
|
|
|
$
|
—
|
|
Basis Swaps - Argus WTI Midland (a)
|
|
|
|
|
|
|
||||||
Volume (Bbls/day)
|
|
15,000
|
|
|
15,000
|
|
|
—
|
|
|||
Weighted average price per Bbl
|
|
$
|
(1.40
|
)
|
|
$
|
(0.94
|
)
|
|
$
|
—
|
|
Basis Swaps - Net Energy Clearbrook (b)
|
|
|
|
|
|
|
||||||
Volume (Bbls/day)
|
|
2,000
|
|
|
—
|
|
|
—
|
|
|||
Weighted average price per Bbl
|
|
$
|
(3.33
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Basis Swaps - NYMEX WTI / ICE Brent (c)
|
|
|
|
|
|
|
||||||
Volume (Bbls/day)
|
|
5,000
|
|
|
5,000
|
|
|
808
|
|
|||
Weighted average price per Bbl
|
|
$
|
(7.24
|
)
|
|
$
|
(7.24
|
)
|
|
$
|
(7.24
|
)
|
Basis Swaps - Argus WTI Houston (d)
|
|
|
|
|
|
|
||||||
Volume (Bbls/day)
|
|
10,000
|
|
|
—
|
|
|
—
|
|
|||
Weighted average price per Bbl
|
|
$
|
5.51
|
|
|
$
|
—
|
|
|
$
|
—
|
|
NYMEX Roll Basis Swaps
|
|
|
|
|
|
|
||||||
Volume (Bbls/day)
|
|
60,000
|
|
|
—
|
|
|
—
|
|
|||
Weighted average price per Bbl
|
|
$
|
0.38
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(a)
|
The basis differential price is indexed against Argus WTI Midland.
|
(b)
|
The basis differential price is indexed against Net Energy Canada Bakken SW at Clearbrook (“UHC”).
|
(c)
|
The basis differential price is indexed against International Commodity Exchange (“ICE”) Brent and NYMEX WTI.
|
(d)
|
The basis differential price is indexed against Argus WTI Houston.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Mark-to-market gain (loss)
|
$
|
33
|
|
|
$
|
19
|
|
|
$
|
(69
|
)
|
|
$
|
(69
|
)
|
Net settlements of commodity derivative instruments
|
$
|
14
|
|
|
$
|
(89
|
)
|
|
$
|
41
|
|
|
$
|
(255
|
)
|
|
September 30, 2019
|
|
December 31, 2018
|
||||||||||
(In millions, except fixed rates)
|
Aggregate Notional Amount
|
|
Weighted Average, LIBOR
|
|
Aggregate Notional Amount
|
|
Weighted Average, LIBOR
|
||||||
Interest rate swaps
|
$
|
160
|
|
|
1.50
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
September 30, 2019
|
||||||||||||||
(In millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Derivative instruments, assets
|
|
|
|
|
|
|
|
||||||||
Commodity(a)
|
$
|
—
|
|
|
$
|
61
|
|
|
$
|
—
|
|
|
$
|
61
|
|
Derivative instruments, assets
|
$
|
—
|
|
|
$
|
61
|
|
|
$
|
—
|
|
|
$
|
61
|
|
Derivative instruments, liabilities
|
|
|
|
|
|
|
|
||||||||
Commodity(a)
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(3
|
)
|
Interest rate
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
Derivative instruments, liabilities
|
$
|
(3
|
)
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
(4
|
)
|
(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)
|
|
September 30, 2019
|
|
December 31, 2018
|
||||||||||||
(In millions)
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
||||||||
Financial assets
|
|
|
|
|
|
|
|
||||||||
Current assets
|
$
|
4
|
|
|
$
|
4
|
|
|
$
|
3
|
|
|
$
|
3
|
|
Other noncurrent assets
|
29
|
|
|
35
|
|
|
76
|
|
|
81
|
|
||||
Total financial assets
|
$
|
33
|
|
|
$
|
39
|
|
|
$
|
79
|
|
|
$
|
84
|
|
Financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other current liabilities
|
$
|
75
|
|
|
$
|
103
|
|
|
$
|
37
|
|
|
$
|
58
|
|
Long-term debt, including current portion(a)
|
6,018
|
|
|
5,529
|
|
|
5,469
|
|
|
5,528
|
|
||||
Deferred credits and other liabilities
|
108
|
|
|
96
|
|
|
93
|
|
|
88
|
|
||||
Total financial liabilities
|
$
|
6,201
|
|
|
$
|
5,728
|
|
|
$
|
5,599
|
|
|
$
|
5,674
|
|
(a)
|
Excludes debt issuance costs.
|
Sub-Series A Bonds
|
Par Amount
|
Interest Rate
|
Mandatory Purchase Date
|
Maturity Date
|
Sub-series A-1 Bonds
|
$200 million
|
2.00%
|
April 1, 2023
|
June 1, 2037
|
Sub-series A-2 Bonds
|
$200 million
|
2.10%
|
July 1, 2024
|
June 1, 2037
|
Sub-series A-3 Bonds
|
$200 million
|
2.20%
|
July 1, 2026
|
June 1, 2037
|
|
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
|
|
|
3,910,971
|
|
|
$
|
16.90
|
|
Exercised/Vested
|
(11,470
|
)
|
|
$
|
14.25
|
|
|
(3,608,790
|
)
|
|
$
|
12.45
|
|
Canceled
|
(925,010
|
)
|
|
$
|
25.33
|
|
|
(1,504,665
|
)
|
|
$
|
15.76
|
|
Outstanding at September 30, 2019
|
5,892,053
|
|
|
$
|
23.42
|
|
|
7,302,462
|
|
|
$
|
16.00
|
|
|
Three Months Ended September 30,
|
||||||||||||||
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Service cost
|
$
|
5
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
3
|
|
|
7
|
|
|
1
|
|
|
2
|
|
||||
Expected return on plan assets
|
(3
|
)
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization:
|
|
|
|
|
|
|
|
|
|
|
|
||||
– prior service cost (credit)
|
(1
|
)
|
|
(2
|
)
|
|
(5
|
)
|
|
(2
|
)
|
||||
– actuarial loss
|
2
|
|
|
3
|
|
|
1
|
|
|
—
|
|
||||
Net settlement loss(a)
|
—
|
|
|
10
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit cost(b)
|
$
|
6
|
|
|
$
|
13
|
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
Nine Months Ended September 30,
|
||||||||||||||
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Service cost
|
$
|
14
|
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Interest cost
|
17
|
|
|
20
|
|
|
3
|
|
|
6
|
|
||||
Expected return on plan assets
|
(19
|
)
|
|
(26
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization:
|
|
|
|
|
|
|
|
|
|
|
|||||
– prior service credit
|
(5
|
)
|
|
(7
|
)
|
|
(14
|
)
|
|
(6
|
)
|
||||
– actuarial loss
|
6
|
|
|
9
|
|
|
1
|
|
|
1
|
|
||||
Net settlement loss(a)
|
2
|
|
|
16
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit cost(b)
|
$
|
15
|
|
|
$
|
25
|
|
|
$
|
(10
|
)
|
|
$
|
2
|
|
(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.
|
|
Pension Benefits
|
||||||
(In millions)
|
September 30, 2019
|
|
December 31, 2018
|
||||
Accumulated benefit obligation
|
$
|
—
|
|
|
$
|
511
|
|
Change in benefit obligations:
|
|
|
|
||||
Beginning balance
|
$
|
511
|
|
|
$
|
599
|
|
Interest cost
|
8
|
|
|
14
|
|
||
Plan amendment
|
—
|
|
|
3
|
|
||
Divestiture(a)
|
(549
|
)
|
|
—
|
|
||
Actuarial loss (gain)
|
36
|
|
|
(38
|
)
|
||
Foreign currency exchange rate changes
|
6
|
|
|
(29
|
)
|
||
Settlements paid
|
—
|
|
|
(23
|
)
|
||
Benefits paid
|
(12
|
)
|
|
(15
|
)
|
||
Ending balance
|
$
|
—
|
|
|
$
|
511
|
|
Change in fair value of plan assets:
|
|
|
|
||||
Beginning balance
|
$
|
594
|
|
|
$
|
670
|
|
Actual return on plan assets
|
68
|
|
|
(21
|
)
|
||
Employer contributions
|
8
|
|
|
17
|
|
||
Foreign currency exchange rate changes
|
8
|
|
|
(34
|
)
|
||
Divestiture
|
(666
|
)
|
|
—
|
|
||
Settlements paid
|
—
|
|
|
(23
|
)
|
||
Benefits paid
|
(12
|
)
|
|
(15
|
)
|
||
Ending balance
|
$
|
—
|
|
|
$
|
594
|
|
Funded status of plans at September 30, 2019 and December 31, 2018
|
$
|
—
|
|
|
$
|
83
|
|
Amounts recognized in the consolidated balance sheets:
|
|
|
|
||||
Noncurrent assets
|
$
|
—
|
|
|
$
|
83
|
|
Accrued benefit cost
|
$
|
—
|
|
|
$
|
83
|
|
Pretax amounts in accumulated other comprehensive loss:
|
|
|
|
||||
Net loss (gain)
|
$
|
—
|
|
|
$
|
59
|
|
Prior service cost (credit)
|
—
|
|
|
5
|
|
(a)
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|
|
||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
Income Statement Line
|
||||||||
Postretirement and postemployment plans
|
|
|
|
|
|
|
|
|
|||||||||
Amortization of prior service credit
|
$
|
6
|
|
|
$
|
4
|
|
|
$
|
19
|
|
|
$
|
13
|
|
|
Other net periodic benefit costs
|
Amortization of actuarial loss
|
(3
|
)
|
|
(3
|
)
|
|
(7
|
)
|
|
(10
|
)
|
|
Other net periodic benefit costs
|
||||
Net settlement loss
|
—
|
|
|
(10
|
)
|
|
(2
|
)
|
|
(16
|
)
|
|
Other net periodic benefit costs
|
||||
|
3
|
|
|
(9
|
)
|
|
10
|
|
|
(13
|
)
|
|
Income before income taxes
|
||||
Other insignificant
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|
Net interest and other
|
||||
U.K. pension plan transferred to buyer (a)(b)
|
83
|
|
|
—
|
|
|
83
|
|
|
—
|
|
|
Net gain (loss) on disposal of assets
|
||||
Foreign currency translation adjustment related to sale of U.K. business(b)
|
30
|
|
|
—
|
|
|
30
|
|
|
—
|
|
|
Net gain (loss) on disposal of assets
|
||||
Income tax provision(c)
|
(46
|
)
|
|
—
|
|
|
(46
|
)
|
|
—
|
|
|
Provision for income taxes
|
||||
Total reclassifications to expense, net of tax
|
$
|
70
|
|
|
$
|
(13
|
)
|
|
$
|
77
|
|
|
$
|
(17
|
)
|
|
Net income
|
(a)
|
(b)
|
(c)
|
During 2019 and 2018 we had a full valuation allowance on net federal deferred tax assets in the U.S. therefore, the income tax provision in this table relates to our former U.K. business.
|
|
|
Nine Months Ended September 30,
|
||||||
(In millions)
|
|
2019
|
|
2018
|
||||
Included in operating activities:
|
|
|
|
|
||||
Interest paid, net of amounts capitalized
|
|
$
|
190
|
|
|
$
|
187
|
|
Income taxes paid to taxing authorities
|
|
151
|
|
|
298
|
|
||
Noncash investing activities:
|
|
|
|
|
|
|
||
Increase in asset retirement costs
|
|
$
|
40
|
|
|
$
|
12
|
|
Asset retirement obligations assumed by buyer(a)
|
|
1,082
|
|
|
82
|
|
•
|
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.
|
(In millions)
|
Ownership as of September 30, 2019
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
EGHoldings
|
60%
|
|
$
|
324
|
|
|
$
|
402
|
|
Alba Plant LLC
|
52%
|
|
158
|
|
|
167
|
|
||
AMPCO
|
45%
|
|
185
|
|
|
176
|
|
||
Total
|
|
|
$
|
667
|
|
|
$
|
745
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Income data:
|
|
|
|
|
|
|
|
||||||||
Revenues and other income
|
$
|
184
|
|
|
$
|
238
|
|
|
$
|
637
|
|
|
$
|
664
|
|
Income from operations
|
61
|
|
|
151
|
|
|
192
|
|
|
391
|
|
||||
Net income
|
45
|
|
|
129
|
|
|
140
|
|
|
331
|
|
•
|
On July 1, 2019, we closed on the sale of our U.K. business for proceeds of approximately $95 million, reflecting the assumption by the buyer of working capital and cash equivalent balances, asset retirement obligations of $966 million, as well as pension obligations.
|
•
|
In the third quarter of 2019, we sold a 25% non-operating working interest in the Louisiana Austin Chalk.
|
•
|
In the fourth quarter of 2019, we entered into agreements to acquire approximately 40,000 acres in a Texas Delaware oil play in West Texas for $106 million, subject to closing adjustments. Also during the fourth quarter of 2019, we entered into an agreement to purchase approximately 18,000 net acres in the Eagle Ford for $185 million, subject to closing adjustments. These transactions are expected to close either later this year or in early 2020.
|
•
|
Recently closed on three finance transactions that are collectively leverage neutral, extend maturities, generate annual cash cost savings, and reflect our commitment to maintaining a strong balance sheet and investment grade credit rating at all primary rating agencies.
|
•
|
At the end of the third quarter 2019, we had approximately $4.2 billion of liquidity, comprised of $1.2 billion in cash and an undrawn $3.0 billion revolving credit facility.
|
•
|
In the nine months ended September 30, 2019, we acquired approximately 19 million common shares at a cost of $280 million, which were held as treasury stock with approximately $1.5 billion of repurchase authorization remaining.
|
•
|
U.S. net sales volumes increased during the quarter to 339 mboed compared to 303 mboed in the prior year. Additionally, our U.S. crude oil net sales volumes increased 16% compared to the same quarter last year.
|
•
|
Our net income per share was $0.21 in the third quarter of 2019 as compared to a net income per share of $0.30 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 19% to $1.2 billion, compared to the same
|
•
|
Net cash provided by operating activities in the first nine months of 2019 versus the same period last year decreased 14% as commodity price realizations similarly decreased 14%. Increased U.S. net sales volumes of 9% were offset by a 25% decrease in International net sales volumes due to dispositions and natural field decline in E.G. in the first nine months of 2019 versus the same period last year.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
Net Sales Volumes
|
2019
|
|
2018
|
|
Increase (Decrease)
|
|
2019
|
|
2018
|
|
Increase (Decrease)
|
||||
United States (mboed)
|
339
|
|
|
303
|
|
12
|
%
|
|
322
|
|
|
296
|
|
9
|
%
|
International (mboed)(a)
|
88
|
|
|
112
|
|
(21
|
)%
|
|
94
|
|
|
126
|
|
(25
|
)%
|
Total (mboed)
|
427
|
|
|
415
|
|
3
|
%
|
|
416
|
|
|
422
|
|
(1
|
)%
|
(a)
|
We closed on the sale of our Libya subsidiary in the first quarter of 2018 and our U.K. business in the third quarter of 2019. See further detail of International net sales volumes below. See Note 5 to the consolidated financial statements for further information on these dispositions.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||
Net Sales Volumes
|
2019
|
|
2018
|
|
Increase (Decrease)
|
|
2019
|
|
2018
|
|
Increase (Decrease)
|
||||||
Equivalent Barrels (mboed)
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Eagle Ford
|
107
|
|
|
115
|
|
|
(7
|
)%
|
|
107
|
|
|
108
|
|
|
(1
|
)%
|
Bakken
|
109
|
|
|
84
|
|
|
30
|
%
|
|
101
|
|
|
81
|
|
|
25
|
%
|
Oklahoma
|
84
|
|
|
73
|
|
|
15
|
%
|
|
77
|
|
|
76
|
|
|
1
|
%
|
Northern Delaware
|
30
|
|
|
21
|
|
|
43
|
%
|
|
28
|
|
|
18
|
|
|
56
|
%
|
Other United States
|
9
|
|
|
10
|
|
|
(10
|
)%
|
|
9
|
|
|
13
|
|
|
(31
|
)%
|
Total United States (mboed)
|
339
|
|
|
303
|
|
|
12
|
%
|
|
322
|
|
|
296
|
|
|
9
|
%
|
|
Three Months Ended September 30, 2019
|
|||||||||||||
Sales Mix - U.S. Resource Plays
|
Eagle Ford
|
|
Bakken
|
|
Oklahoma
|
|
Northern Delaware
|
|
Total
|
|||||
Crude oil and condensate
|
59
|
%
|
|
84
|
%
|
|
27
|
%
|
|
60
|
%
|
|
59
|
%
|
Natural gas liquids
|
20
|
%
|
|
9
|
%
|
|
27
|
%
|
|
20
|
%
|
|
18
|
%
|
Natural gas
|
21
|
%
|
|
7
|
%
|
|
46
|
%
|
|
20
|
%
|
|
23
|
%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
Drilling Activity - U.S. Resource Plays
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Gross Operated
|
|
|
|
|
|
|
|
||||
Eagle Ford:
|
|
|
|
|
|
|
|
||||
Wells drilled to total depth
|
31
|
|
|
26
|
|
|
97
|
|
|
93
|
|
Wells brought to sales
|
35
|
|
|
38
|
|
|
117
|
|
|
111
|
|
Bakken:
|
|
|
|
|
|
|
|
||||
Wells drilled to total depth
|
20
|
|
|
20
|
|
|
52
|
|
|
63
|
|
Wells brought to sales
|
30
|
|
|
21
|
|
|
89
|
|
|
53
|
|
Oklahoma:
|
|
|
|
|
|
|
|
||||
Wells drilled to total depth
|
15
|
|
|
14
|
|
|
53
|
|
|
37
|
|
Wells brought to sales
|
19
|
|
|
11
|
|
|
55
|
|
|
45
|
|
Northern Delaware:
|
|
|
|
|
|
|
|
||||
Wells drilled to total depth
|
10
|
|
|
18
|
|
|
37
|
|
|
59
|
|
Wells brought to sales
|
10
|
|
|
18
|
|
|
41
|
|
|
40
|
|
•
|
Eagle Ford – Our net sales volumes were 107 mboed in the third quarter of 2019, which were 7% lower compared to the prior year quarter. The current quarter highlighted a new quarterly record for average 30 day initial oil productivity for the asset. The Middle McCowen four-well pad in Atascosa featured average lateral lengths of 10,900 feet, a new lateral length record for the asset, highlighting optionality for capital efficient, long lateral development across parts of Atascosa County. Completed well cost per lateral foot remains on a declining trend, with the third quarter average approximately 10% below 2018.
|
•
|
Bakken – Our net sales volumes of 109 mboed represent a 30% increase over the prior year quarter of 84 mboed. We continue to deliver capital efficiency, highlighted by strong productivity and declining completed well costs, which averaged $4.9 million, or about 20% below the 2018 average. The successful delineation of our broader Hector acreage continued during the current quarter with an average completed well cost of $4.5 million.
|
•
|
Oklahoma – Our net sales volumes were 84 mboed in the third quarter of 2019, which increased 15% from the prior year quarter of 73 mboed. We continued to deliver strong results from the over-pressured STACK, where the average completed well cost for the Marjorie and Lloyd pads was $6.3 million (normalized to a 10,000 foot lateral). In the SCOOP, we brought online three Springer wells with strong early performance.
|
•
|
Northern Delaware – Our net sales volumes were 30 mboed in the third quarter of 2019 which was 43% higher compared to the prior year quarter. We continue to make progress in advancing learnings, reducing our cost structure and improving margins. The third quarter of 2019 featured strong Upper Wolfcamp productivity in the Malaga area, with completed well costs per lateral foot 20% below the 2018 average.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||
Net Sales Volumes
|
2019
|
|
2018
|
|
Increase (Decrease)
|
|
2019
|
|
2018
|
|
Increase (Decrease)
|
||||||
Equivalent Barrels (mboed)
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Equatorial Guinea
|
88
|
|
|
100
|
|
|
(12
|
)%
|
|
86
|
|
|
99
|
|
|
(13
|
)%
|
United Kingdom(a)
|
—
|
|
|
9
|
|
|
(100
|
)%
|
|
7
|
|
|
13
|
|
|
(46
|
)%
|
Libya
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
10
|
|
|
(100
|
)%
|
Other International
|
—
|
|
|
3
|
|
|
(100
|
)%
|
|
1
|
|
|
4
|
|
|
(75
|
)%
|
Total International (mboed)
|
88
|
|
|
112
|
|
|
(21
|
)%
|
|
94
|
|
|
126
|
|
|
(25
|
)%
|
Equity Method Investees
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
LNG (mtd)
|
4,590
|
|
|
6,152
|
|
|
(25
|
)%
|
|
4,849
|
|
|
5,947
|
|
|
(18
|
)%
|
Methanol (mtd)
|
1,036
|
|
|
1,334
|
|
|
(22
|
)%
|
|
1,058
|
|
|
1,282
|
|
|
(17
|
)%
|
Condensate and LPG (boed)
|
11,586
|
|
|
11,942
|
|
|
(3
|
)%
|
|
10,858
|
|
|
12,347
|
|
|
(12
|
)%
|
(a)
|
Includes natural gas acquired for injection and subsequent resale.
|
•
|
Equatorial Guinea – Net sales volumes in the third quarter of 2019 were lower compared to the same period in 2018 as a result of natural field decline. Net sales volumes for the first nine months of 2019 were lower compared to the same period in 2018 due to the planned triennial turnaround in E.G. completed in the first quarter of 2019 as well as natural field decline.
|
•
|
United Kingdom – On July 1, 2019, we closed on the sale of our U.K. business. See Note 5 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 5 to the consolidated financial statements for further information.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
Increase (Decrease)
|
|
2019
|
|
2018
|
|
Increase (Decrease)
|
||||||||||
Average Price Realizations(a)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Crude oil and condensate (per bbl)(b)
|
$
|
55.09
|
|
|
$
|
68.51
|
|
|
(20
|
)%
|
|
$
|
56.14
|
|
|
$
|
65.66
|
|
|
(14
|
)%
|
Natural gas liquids (per bbl)
|
11.37
|
|
|
28.07
|
|
|
(59
|
)%
|
|
13.81
|
|
|
24.47
|
|
|
(44
|
)%
|
||||
Natural gas (per mcf)
|
1.92
|
|
|
2.55
|
|
|
(25
|
)%
|
|
2.20
|
|
|
2.44
|
|
|
(10
|
)%
|
||||
Benchmarks
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
WTI crude oil average of daily prices (per bbl)
|
$
|
56.44
|
|
|
$
|
69.43
|
|
|
(19
|
)%
|
|
$
|
57.10
|
|
|
$
|
66.79
|
|
|
(15
|
)%
|
Magellan East Houston (“MEH”) crude oil average of daily prices (per bbl)(c)
|
61.06
|
|
|
|
|
|
|
62.60
|
|
|
|
|
|
||||||||
LLS crude oil average of daily prices (per bbl)(c)
|
|
|
75.10
|
|
|
|
|
|
|
|
71.19
|
|
|
|
|||||||
Mont Belvieu NGLs (per bbl)(d)
|
15.16
|
|
|
31.25
|
|
|
(51
|
)%
|
|
18.14
|
|
|
27.31
|
|
|
(34
|
)%
|
||||
Henry Hub natural gas settlement date average (per mmbtu)
|
2.23
|
|
|
2.90
|
|
|
(23
|
)%
|
|
2.67
|
|
|
2.90
|
|
|
(8
|
)%
|
(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 $0.72 per bbl and $(5.70) per bbl for the third quarter 2019 and 2018 and $0.70 per bbl and $(5.71) per bbl for the first nine months of 2019 and 2018.
|
(c)
|
Benchmark change due to industry shift to MEH in the first quarter of 2019.
|
(d)
|
Bloomberg Finance LLP: Y-grade Mix NGL of 55% ethane, 25% propane, 5% butane, 8% isobutane and 7% natural gasoline.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
Increase (Decrease)
|
|
2019
|
|
2018
|
|
Increase (Decrease)
|
||||||||||
Average Price Realizations
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Crude oil and condensate (per bbl)
|
$
|
46.04
|
|
|
$
|
64.08
|
|
|
(28
|
)%
|
|
$
|
53.98
|
|
|
$
|
65.71
|
|
|
(18
|
)%
|
Natural gas liquids (per bbl)
|
1.00
|
|
|
2.04
|
|
|
(51
|
)%
|
|
1.53
|
|
|
2.28
|
|
|
(33
|
)%
|
||||
Natural gas (per mcf)
|
0.24
|
|
|
0.50
|
|
|
(52
|
)%
|
|
0.35
|
|
|
0.56
|
|
|
(38
|
)%
|
||||
Benchmark
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Brent (Europe) crude oil (per bbl)(a)
|
$
|
61.93
|
|
|
$
|
75.22
|
|
|
(18
|
)%
|
|
$
|
64.67
|
|
|
$
|
72.18
|
|
|
(10
|
)%
|
(a)
|
Average of monthly prices obtained from the United States Energy Information Agency website.
|
|
Three Months Ended September 30,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Revenues from contracts with customers
|
|
|
|
||||
United States
|
$
|
1,172
|
|
|
$
|
1,347
|
|
International
|
77
|
|
|
191
|
|
||
Segment revenues from contracts with customers
|
$
|
1,249
|
|
|
$
|
1,538
|
|
|
Three Months Ended September 30,
|
||||||||||||||||
($ per boe)
|
2019
|
2018
|
Increase (Decrease)
|
|
2019
|
2018
|
Increase (Decrease)
|
||||||||||
Production Expense and Rate
|
Expense
|
|
Rate
|
||||||||||||||
United States
|
$
|
147
|
|
$
|
172
|
|
(15
|
)%
|
|
$
|
4.75
|
|
$
|
6.14
|
|
(23
|
)%
|
International
|
$
|
16
|
|
$
|
43
|
|
(63
|
)%
|
|
$
|
1.98
|
|
$
|
4.22
|
|
(53
|
)%
|
|
Three Months Ended September 30,
|
|||||||||
(In millions)
|
2019
|
|
2018
|
|
Increase (Decrease)
|
|||||
Exploration Expenses
|
|
|
|
|
|
|||||
Unproved property impairments
|
$
|
15
|
|
|
$
|
50
|
|
|
(70
|
)%
|
Dry well costs
|
1
|
|
|
1
|
|
|
—
|
%
|
||
Geological and geophysical
|
1
|
|
|
(1
|
)
|
|
(200
|
)%
|
||
Other
|
5
|
|
|
6
|
|
|
(17
|
)%
|
||
Total exploration expenses
|
$
|
22
|
|
|
$
|
56
|
|
|
(61
|
)%
|
|
Three Months Ended September 30,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
Increase (Decrease)
|
||||||
United States
|
$
|
180
|
|
|
$
|
201
|
|
|
$
|
(21
|
)
|
International
|
43
|
|
|
116
|
|
|
(73
|
)
|
|||
Segment income
|
223
|
|
|
317
|
|
|
(94
|
)
|
|||
Items not allocated to segments, net of income taxes
|
(58
|
)
|
|
(63
|
)
|
|
5
|
|
|||
Net income
|
$
|
165
|
|
|
$
|
254
|
|
|
$
|
(89
|
)
|
|
Nine Months Ended September 30,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Revenues from contracts with customers
|
|
|
|
||||
United States
|
$
|
3,434
|
|
|
$
|
3,693
|
|
International
|
396
|
|
|
829
|
|
||
Segment revenues from contracts with customers
|
$
|
3,830
|
|
|
$
|
4,522
|
|
|
Nine Months Ended September 30,
|
||||||||||||||||
($ per boe)
|
2019
|
2018
|
Increase (Decrease)
|
|
2019
|
2018
|
Increase (Decrease)
|
||||||||||
Production Expense and Rate
|
Expense
|
|
Rate
|
||||||||||||||
United States
|
$
|
433
|
|
$
|
476
|
|
(9
|
)%
|
|
$
|
4.94
|
|
$
|
5.90
|
|
(16
|
)%
|
International
|
$
|
112
|
|
$
|
162
|
|
(31
|
)%
|
|
$
|
4.33
|
|
$
|
4.70
|
|
(8
|
)%
|
|
Nine Months Ended September 30,
|
|||||||||
(In millions)
|
2019
|
|
2018
|
|
Increase (Decrease)
|
|||||
Exploration Expenses
|
|
|
|
|
|
|||||
Unproved property impairments
|
$
|
79
|
|
|
$
|
131
|
|
|
(40
|
)%
|
Dry well costs
|
6
|
|
|
13
|
|
|
(54
|
)%
|
||
Geological and geophysical
|
10
|
|
|
13
|
|
|
(23
|
)%
|
||
Other
|
12
|
|
|
16
|
|
|
(25
|
)%
|
||
Total exploration expenses
|
$
|
107
|
|
|
$
|
173
|
|
|
(38
|
)%
|
|
Nine Months Ended September 30,
|
|||||||||
(In millions)
|
2019
|
|
2018
|
|
Increase (Decrease)
|
|||||
United States
|
$
|
527
|
|
|
$
|
449
|
|
|
17
|
%
|
International
|
200
|
|
|
390
|
|
|
(49
|
)%
|
||
Segment income
|
727
|
|
|
839
|
|
|
(13
|
)%
|
||
Items not allocated to segments, net of income taxes
|
(227
|
)
|
|
(133
|
)
|
|
71
|
%
|
||
Net income
|
$
|
500
|
|
|
$
|
706
|
|
|
(29
|
)%
|
|
Nine Months Ended September 30,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Sources of cash and cash equivalents
|
|
|
|
|
|
||
Operating activities
|
$
|
2,049
|
|
|
$
|
2,379
|
|
Disposal of assets, net of cash transferred to the buyer
|
(84
|
)
|
|
1,249
|
|
||
Other
|
53
|
|
|
81
|
|
||
Total sources of cash and cash equivalents
|
$
|
2,018
|
|
|
$
|
3,709
|
|
Uses of cash and cash equivalents
|
|
|
|
||||
Additions to property, plant and equipment
|
$
|
(1,934
|
)
|
|
$
|
(2,069
|
)
|
Additions to other assets
|
41
|
|
|
(135
|
)
|
||
Acquisitions, net of cash acquired
|
—
|
|
|
(25
|
)
|
||
Purchases of common stock
|
(296
|
)
|
|
(349
|
)
|
||
Dividends paid
|
(122
|
)
|
|
(128
|
)
|
||
Other
|
(4
|
)
|
|
(2
|
)
|
||
Total uses of cash and cash equivalents
|
$
|
(2,315
|
)
|
|
$
|
(2,708
|
)
|
|
Nine Months Ended September 30,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
United States
|
$
|
1,959
|
|
|
$
|
1,943
|
|
International
|
16
|
|
|
28
|
|
||
Corporate
|
15
|
|
|
17
|
|
||
Total capital expenditures
|
1,990
|
|
|
1,988
|
|
||
Change in capital expenditure accrual
|
(56
|
)
|
|
81
|
|
||
Total use of cash and cash equivalents for property, plant and equipment
|
$
|
1,934
|
|
|
$
|
2,069
|
|
•
|
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;
|
•
|
our ability to complete our announced acquisitions on the timeline currently anticipated, if at all;
|
•
|
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;
|
•
|
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 associated costs;
|
•
|
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 or other requirements or initiatives, including those addressing the impact of global climate change, flaring or water management;
|
•
|
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
|
$
|
(50
|
)
|
|
$
|
45
|
|
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)
|
||||||
07/01/2019 - 07/31/2019
|
8,597
|
|
|
$
|
14.21
|
|
|
—
|
|
|
$
|
1,500,286,171
|
|
08/01/2019 - 08/31/2019
|
823,095
|
|
|
$
|
12.19
|
|
|
820,696
|
|
|
$
|
1,490,286,250
|
|
09/01/2019 - 09/30/2019
|
1,576,714
|
|
|
$
|
12.68
|
|
|
1,576,714
|
|
|
$
|
1,470,286,190
|
|
Total
|
2,408,406
|
|
|
$
|
12.52
|
|
|
2,397,410
|
|
|
|
|
(a)
|
10,996 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, by $1.2 billion in December 2013, and by $950 million in July 2019.
|
November 7, 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
|
|
8-K
|
|
10.1
|
|
9/24/2019
|
|
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
|
|
|
|
|
|
104*
|
|
Cover Page Interactive Data File, formatted in iXBRL and contained in Exhibit 101
|
|
|
|
|
|
*
|
|
Filed herewith.
|
|
|
|
|
|
†
|
|
Management contract or compensatory plan or arrangement.
|
|
|
|
|
|
1 Year Marathon Oil Chart |
1 Month Marathon Oil Chart |
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