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Q2 2016 Financial and Operational Review – Marathon Oil Corp

Marathon Oil Corp · Aug 3, 2016 · 25 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Q2 2016 Financial and Operational Review – Marathon Oil Corp – slide 1
    SECOND QUARTER 2016 Financial and Operational Review August 3, 2016
  2. Q2 2016 Financial and Operational Review – Marathon Oil Corp – slide 2
    Marathon Oil Playbook Profitable growth Simplifying within and cash flows Relentless concentrating focus on portfolio Strengthened costs balance sheet 3
  3. Q2 2016 Financial and Operational Review – Marathon Oil Corp – slide 3
    Second Quarter Highlights Strong well results, continued cost reductions & ongoing portfolio management Costs Well Results N.A. E&P production Strong STACK costs down 28% year Meramec well results over year at 70+% oil cut Eagle…
  4. Q2 2016 Financial and Operational Review – Marathon Oil Corp – slide 4
    Capital Program Focused on U.S. Resource Plays Full year budget reduced to 1.3B inclusive of funding for acquired STACK activity Total MRO 2016 Capital, Investment and Exploration 800 670 U.S. resource plays 600 MM 366…
  5. Q2 2016 Financial and Operational Review – Marathon Oil Corp – slide 5
    Divestiture-Adjusted Production Flat Sequentially Updated full year E&P guidance for divestitures and acquisition Available for Sale Volumes 500 Guidance Updated Guidance OSM: 45 - 50 OSM: 40 - 50 376* E&P: 325 - 345 E&P: 330 -…
  6. Q2 2016 Financial and Operational Review – Marathon Oil Corp – slide 6
    Continued Cost Reductions in N.A. E&P Lowering full year production expense guidance 1.00 per BOE Production & Other Operating Expenses Unit Production & Other Operating Expenses 300 (18%) reduction 16 14 250 99 12 200 118 10…
  7. Q2 2016 Financial and Operational Review – Marathon Oil Corp – slide 7
    Strong Oklahoma Well Performance Enhanced completions driving results Production Volumes and Wells to Sales Production averaged 27 net MBOED; 40 12 flat with 1Q 2016 Co-Op Wells to Sales 30 9 5 gross operated wells to sales (4…
  8. Q2 2016 Financial and Operational Review – Marathon Oil Corp – slide 8
    Delineating Oklahoma Leasehold Testing phase window boundaries MRO Irven John & Olive June 1-27XH MRO Lloyd & Marjorie 1-25H 70% & 75% Oil On Flowback 1,710 & 1,570 BOED Ramshorn 1102-2AH Kingfisher 64% Oil 900 BOED Bernhardt…
  9. Q2 2016 Financial and Operational Review – Marathon Oil Corp – slide 9
    Material Addition in STACK Oil Window Acquisition closed Aug 1st and integrating into base business Increased scale in high margin Kingfisher oil window 61,000 net surface acres Post 1706 1-30MH 51% Oil 780 BOED 330 MMBOE 2P…
  10. Q2 2016 Financial and Operational Review – Marathon Oil Corp – slide 10
    Eagle Ford Driving Down Costs Capturing efficiencies and adjusting development plan at lower activity Production Volumes and Wells to Sales Production averaged 109 net MBOED; 160 120 down 9% from 1Q 2016 Gross operated wells to sales…
  11. Q2 2016 Financial and Operational Review – Marathon Oil Corp – slide 11
    Eagle Ford Wells Transitioning to Tighter Stage Spacing High GOR oil wells continuing to respond positively Franke/Franke Johnson 5 well pad 200 stage spacing in high AC/LEF Co-Dev Wilson 856 1,422 BOED GOR oil wells delivering…
  12. Q2 2016 Financial and Operational Review – Marathon Oil Corp – slide 12
    Bakken Moderating Decline Despite Limited Activity Strong reliability, continuing to reduce costs and selective completion tests Production Volumes and Wells to Sales Production averaged 53 net MBOED; 80 40 down 7% from 1Q 2016…
  13. Q2 2016 Financial and Operational Review – Marathon Oil Corp – slide 13
    Record Bakken Well on Clarks Creek Pad Advancing stimulation designs in high value West and East Myrmidon W. Myrmidon: Clarks Creek Pad Clarks Creek USA 14-35H 2,840 BOED Juanita USA 13-35H 2,700 BOED Charmaine USA 14-35TFH…
  14. Q2 2016 Financial and Operational Review – Marathon Oil Corp – slide 14
    Major Project Start-Ups on Time and on Budget Predictable, safe and reliable project execution 150 EG Production Forecast Equatorial Guinea Alba B3 Compression 125 Significant capital investment complete 100 Achieved first gas in…
  15. Q2 2016 Financial and Operational Review – Marathon Oil Corp – slide 15
    OSM Continues Strong Operating Performance Delivers within guidance despite wildfire impacts OSM Synthetic Crude Oil Sales Volumes Production averaged 40 net MSCOD; 70 down 18% from 1Q 2016 60 4,000 bbld impact from temporary 50…
  16. Q2 2016 Financial and Operational Review – Marathon Oil Corp – slide 16
    Key Takeaways Capital Discipline Operations Balance Sheet Strength Provides Flexibility 2Q 2016 Total Company Production 5.9B 2Q liquidity, 384 MBOED including 2.6B cash in line with guidance Ongoing Portfolio Management Strong…
  17. Q2 2016 Financial and Operational Review – Marathon Oil Corp – slide 17
    Volumes, Exploration Expenses & Effective Tax Rate 2016 (excluding Libya) 1Q 2Q 3Q 4Q Year North America E&P Net Sales Volumes: - Liquid Hydrocarbons (MBD) 186 173 - Natural Gas (MMCFD) 315 310 - North America E&P Total (MBOED) 239…
  18. Q2 2016 Financial and Operational Review – Marathon Oil Corp – slide 18
    2016 Estimates Volumes Available for Sale Available for Sale Comments 3QE Year Estimate North America E&P Total (MBOED) 200 210 - Liquid Hydrocarbons (MBD) 152 160 - Natural Gas (MMCFD) 285 300 International E&P Total (MBOED)*…
  19. Q2 2016 Financial and Operational Review – Marathon Oil Corp – slide 19
    2016 Estimates Exploration expenses & annual production operating costs per BOE 3QE Year Estimate Comments Exploration Expenses (Pre-tax): North America E&P ( millions) 10 20 International E&P ( millions) 5 10 Effective Consolidated…
  20. Q2 2016 Financial and Operational Review – Marathon Oil Corp – slide 20
    E&P Production Performance Combined total 2Q volumes increased sequentially N.A. E&P Sales Volumes Intl E&P Production & Sales Volumes 400 150 125 300 100 MBOED MBOED 200 75 120 120 274 50 108 108 100 96 239 224…
  21. Q2 2016 Financial and Operational Review – Marathon Oil Corp – slide 21
    2016 2Q Production Mix U.S. resource plays 60% oil and 80% liquids Eagle Ford Oklahoma Resource Basins Bakken 7% 20% 10% 23% 56% 50% 83% 21% 30% Total U.S. Resource Plays 22% 59% 19% Crude Oil/Condensate NGLs…
  22. Q2 2016 Financial and Operational Review – Marathon Oil Corp – slide 22
    2016 North America Activity U.S. resource plays Bakken Gross Gross Average Total Operated Operated Net Wells Net Wells 2016 Rig CAPEX Wells Wells to Drilled to Sales Count Drilled Sales 140MM 0.2 24 13 15 57 13 20 YTD…
  23. Q2 2016 Financial and Operational Review – Marathon Oil Corp – slide 23
    North America E&P Crude Oil Derivatives As of June 30, 2016 Crude Oil (Benchmark to WTI) 3Q 2016 4Q 2016 YE 2017 Three-Way Collars Volume (Bbls/day) 47,000 47,000 - Price per Bbl: Ceiling 55.37 55.37 - Floor 50.23 50.23 -…
  24. Q2 2016 Financial and Operational Review – Marathon Oil Corp – slide 24
    North America E&P Natural Gas Derivatives As of June 30, 2016 Natural Gas (Benchmark to HH) 3Q 2016 4Q 2016 YE 2017(a) Three-Way Collars Volume (MMBtu/day) 20,000 20,000 40,000 Weighted Average Price: Ceiling 2.93 2.93 3.28…
  25. Q2 2016 Financial and Operational Review – Marathon Oil Corp – slide 25
    Capital, Investment & Exploration Budget reconciliation MM 2016 2016 YTD* Budget Actual Capital expenditures, including acquisitions 1,401 625** M&S Inventory 0 (26) Investments in equity method investees & others 0 0…

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