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2018 Capital Program – Marathon Oil Corp

Marathon Oil Corp · Feb 14, 2018 · 31 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. 2018 Capital Program – Marathon Oil Corp – slide 1
    2018 Capital Program & 2017 Results February 14, 2018
  2. 2018 Capital Program – Marathon Oil Corp – slide 2
    2018 Capital Program Overview Year over year improvement in corporate cash returns significantly outpaces production growth Margins naturally expand as U.S. resource plays increase to almost 70% of production mix 90% of 2.3B…
  3. 2018 Capital Program – Marathon Oil Corp – slide 3
    Strong Rate of Change on Corporate Performance Metrics 2018 vs 2017 Metrics At 50 WTI At 60 WTI CROIC1 improvement: 30% 50% CFPDAS2 improvement: 10% 30% Total production Boe growth: 10 - 14% Oil growth: 16 - 20% CROIC and…
  4. 2018 Capital Program – Marathon Oil Corp – slide 4
    Production Mix Drives Margin Enhancement U.S. Resource Plays % of Total Production Mix U.S. resource plays production contribution up significantly from % U.S. Resource Plays +20% 2015 70% Production % increasing 70% of 2018…
  5. 2018 Capital Program – Marathon Oil Corp – slide 5
    90% 2018 Development Capital to U.S. Resource Plays 2018 Development Capital Budget 2.3B Disciplined capital program balances returns and strategic objectives with growth as an outcome 2.3B Development Capital Budget in Bakken…
  6. 2018 Capital Program – Marathon Oil Corp – slide 6
    Differentiated Position in 4 Lowest Cost Resource Plays 6% 9% 19% 85% 81% Bakken: 590MM Oklahoma: 410MM 40 - 50 gross operated wells to sales 60 - 80 gross operated wells to sales 80% pad drilling 2/3s on high confidence…
  7. 2018 Capital Program – Marathon Oil Corp – slide 7
    2018 Returns Driven by Oil Focused Growth Total Available for Sale Volumes FY Guidance: 2018 Annual Production Guidance: 500 390 - 410 Total growth of 12% at the midpoint, 400 356* divestiture adjusted MBOED 300 139* 12%…
  8. 2018 Capital Program – Marathon Oil Corp – slide 8
    2017 Results Highlight Execution Focus 2017 Guidance 2017 Actuals Full-Year Capital Program1 2.1B 2.1B Total Production (MBOED)2 350 - 360 358 Production Oil & BOE Growth2,3 9% midpoint 9% U.S. Resource Plays Exit-to-Exit Oil…
  9. 2018 Capital Program – Marathon Oil Corp – slide 9
    Total Company Cash Flow for FY17 Year-end liquidity of 4.0B Achieved free cash flow neutrality in 2017, including dividends and working capital1 Reduced gross debt by 1.75B, lowering annualized interest expense by 115MM Competitive…
  10. 2018 Capital Program – Marathon Oil Corp – slide 10
    2017 U.S. Production Unit Expense At Record Low* U.S. Production Expense Adjusted G&A Expense 1,200 45% unit reduction 12.00 700 35% unit reduction 5.00 10.26 4.14 600 1,000 10.00 4.00 500 800 7.38 8.00 2.95 2.93 2.65…
  11. 2018 Capital Program – Marathon Oil Corp – slide 11
    Fourth Quarter 2017 Highlights Production 4 Basin Execution Total Company production (ex. Williston Basin record for IP 30 Libya) of 383 MBOED, up 4% oil rate of 3,005 BOPD sequentially*; Libya 33 MBOED Eagle Ford production up 4%…
  12. 2018 Capital Program – Marathon Oil Corp – slide 12
    Another Quarter of Eagle Ford Outperformance Production Volumes and Wells to Sales Production averaged 105 net MBOED; up 120 90 4% from 3Q 2017 Co-Op Wells to Sales 80 60 33 gross operated wells to sales MBOED Average IP…
  13. 2018 Capital Program – Marathon Oil Corp – slide 13
    Positive 4Q Results Across Eagle Ford Position Challenger Unit C 7 well pad Wilson Avg: 1,698 BOED (79% oil) Rogers Foester 5,500 LL 5 well pad Avg: 1,678 BOED (65% oil) Karnes 5,060 LL Labus Pittman 4 well pad Avg: 1,969 BOED…
  14. 2018 Capital Program – Marathon Oil Corp – slide 14
    Bakken Delivers Another Year of Step Change Performance Production Volumes and Wells to Sales Production averaged 69 net MBOED, up 80 30 17% from 3Q 2017 Co-Op Wells to Sales 60 20 13 gross operated wells to sales MBOED…
  15. 2018 Capital Program – Marathon Oil Corp – slide 15
    Bakken Best in Basin Performance Continues Historic Industry Middle Bakken Well Performance Mountrail 3,000 2,500 Myrmidon 30 -day IP (BOPD) 2,000 McKenzie 1,500 1,000 500 Big Head Pad 1 well 0 Avg: 3,138 BOED (78%…
  16. 2018 Capital Program – Marathon Oil Corp – slide 16
    Oklahoma Delivers Impressive Volatile Oil Infill Development Production Volumes and Wells to Sales Production averaged 64 net MBOED; up 80 30 10% from 3Q 2017 Co-Op Wells to Sales 60 20 26 gross operated wells to sales…
  17. 2018 Capital Program – Marathon Oil Corp – slide 17
    Oklahoma 4Q Activity Focused on Infills and Leasehold Tan Infill Development Willie Left Hand BIA 1-5H (9 new wells) IP30: 1,396 BOED (16% oil) Avg IP30: 1,840 BOED (60% oil) Blaine Kingfisher Eve Infill Pilot Londyn BIA 1411…
  18. 2018 Capital Program – Marathon Oil Corp – slide 18
    Northern Delaware Producing Outstanding Well Results Production Volumes and Wells to Sales Production averaged 11 net MBOED; up 12 25 from 3Q 2017 10 20 Co-Op Wells to Sales 11 gross operated wells to sales 8 15 MBOED 6…
  19. 2018 Capital Program – Marathon Oil Corp – slide 19
    International 4Q Highlights Intl Production Volumes (Excl. Libya) International production* 121 net 150 MBOED; down sequentially due to: 125 14 Forties pipeline shutdown 20 17 20 13 100 Planned TAR at Brae and Foinaven…
  20. 2018 Capital Program – Marathon Oil Corp – slide 20
    Key 4Q and Full Year 2017 Takeaways Outperformed in 2017 While Maintaining Cash Flow Neutrality* 9% 31% 121% 2017 oil and boe production U.S. resource plays exit to Organic reserve growth** exit oil growth replacement Eagle Ford…
  21. 2018 Capital Program – Marathon Oil Corp – slide 21
    APPENDIX
  22. 2018 Capital Program – Marathon Oil Corp – slide 22
    Volumes, Exploration Expenses & Effective Tax Rate 2017 (excluding Libya) 1Q 2Q 3Q 4Q Full Year United States Net Sales Volumes: - Liquid Hydrocarbons (MBD) 158 165 183 199 176 - Natural Gas (MMCFD) 304 341 369 376 348 - United…
  23. 2018 Capital Program – Marathon Oil Corp – slide 23
    2018 Production Estimates Available for Sale Available for Sale 1QE Year Estimate United States Total (MBOED) 265 275 - Crude Oil (MBD) 150 160 International Total (MBOED)* 105 115 - Crude Oil (MBD)* 30 40 Total Segments…
  24. 2018 Capital Program – Marathon Oil Corp – slide 24
    2018 Estimates Exploration expenses & annual production operating costs per BOE 1QE Year Estimate Total Exploration Expenses (Pre-tax, MM)*: 40 50 United States Cost Data Production Operating 4.75 5.75 DD&A 20.75 23.25 S&H and…
  25. 2018 Capital Program – Marathon Oil Corp – slide 25
    Year End 2017 Estimated Net Proved Reserves 1.4 BBOE 62% Proved Developed YE 2017 73% Liquids YE 2017 Gas Undeveloped 27% 38% C&C 55% Developed NGL 62% 18% 26 See the 4Q 2017 Investor Packet at www.Marathonoil.com for…
  26. 2018 Capital Program – Marathon Oil Corp – slide 26
    121% Organic Reserve Replacement in 2017 Canada F&D United States International TOTAL Disc Ops Costs Category (MMBOE) (MMBOE) SCO (MMBBL) (MMBOE) (/BOE) As of Dec 31, 2016 948 456 692 2,096 Additions 98 18 - 116 Revisions 42 7 -…
  27. 2018 Capital Program – Marathon Oil Corp – slide 27
    Production Performance U.S. Divestiture-Adj. Sales Volumes Intl Production & Sales Volumes 300 175 150 23 10 23 33 31 8 125 200 MBOED 100 MBOED 261* 75 241* 142 129 135 126 121 122 100 206* 50 25 0 0 4Q 2016…
  28. 2018 Capital Program – Marathon Oil Corp – slide 28
    2017 4Q Production Mix Eagle Ford Oklahoma Resource Basins 20% 25% Total U.S. Resource Plays 47% 22% 58% 28% 23% Crude Oil/Condensate 58% NGLs Bakken Northern Delaware 19% Natural Gas 6% 9% 21% 10% 85% 69% 29
  29. 2018 Capital Program – Marathon Oil Corp – slide 29
    United States Crude Oil Derivatives As of February 12, 2018 Crude Oil (Benchmark to NYMEX WTI) 1Q 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019 2Q 2019 3Q 2019 4Q 2019 Three-Way Collars Volume (Bbls/day) 85,000 85,000 95,000 95,000 30,000…
  30. 2018 Capital Program – Marathon Oil Corp – slide 30
    United States Natural Gas Derivatives As of February 12, 2018 Natural Gas (Benchmark to NYMEX HH) 1Q 2018 2Q 2018 3Q 2018 4Q 2018 Three-Way Collars Volume (MMBtu/day) 200,000 160,000 160,000 160,000 Weighted Avg Price per…
  31. 2018 Capital Program – Marathon Oil Corp – slide 31
    Capital, Investment & Exploration 2017 budget reconciliation MM 2017 Revised 2017 Budget Actual Capital expenditures 2,100 2,150 M&S Inventory 0 (10) Investments in equity method investees & others 0 0 Exploration costs other…

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