2013 Barclays CEO Energy-Power Conference September 11, 2013 Lee M. Tillman President and CEO Marathon Oil Corporation
Delivering Profitable Growth Creating long term shareholder value Resource plays provide liquids focused growth with gas upside 10+ year drilling inventory 2013 production 8 to 10% higher than 2012* Target 5 to 7% CAGR 2012 through…
First Half 2013 Highlights Focus on fundamentals to deliver on commitments Continued solid execution and operational excellence NA + Intl E&P production available for sale excl. Libya at upper end of guidance U.S. Lower 48 onshore…
Production Profile and Growth Outlook Profitable base with growth driven by North America assets 750 7% 5% 500 P90 P10 MBOED 250 Range US and Canada EG Norway/UK Libya - 2012 2013 2014 2015 2016 2017 Alaska and…
U.S. Lower 48 Onshore Forecast Liquids bias underpinning value accretive growth 250 Production Available for Sale 200 P90 +6% P10 +9% +17% 150 (MBOED) +25% +7% +12% 100 +20% 50 0 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q…
U.S. Liquids Rich Resource Plays Large resource, significant upside Potential resource 2.8 Billion BOE 10+ Year drilling inventory Bakken 379,000 net acres 2Q 2013 averaged 39,000 net BOED Downspacing progressing well Refrac…
Eagle Ford Operations Driving growth, capturing efficiencies 100 Q1 Average Q2 Average Q3 Average Q4 Average Q1 Average Q2 Average 14.4 MBOED 20.9 MBOED 40.3 MBOED 59.5 MBOED 72.1 MBOED 80.1 MBOED 80 Gas NGL Oil 60 MBOED…
Eagle Ford Shale Growing resource and well inventory through downspacing Initial acquisition assumption: 160 and 2P Resource 80 acre spacing (MMBOE) Net Wells 1,500 3,500 3,197 2013 YTD drilling 80% of wells on 60 acre well…
Eagle Ford Well Costs Learning curve delivering capital efficiency and improving profitability Reduced average spud to TD time by approximately 50% over the past 18 months 30 Reduced frac cycle time by 25 approximately 40%…
Eagle Ford Top Tier Drilling Performance Setting the benchmark and continuously improving Ft/Day TD 1,455 1,289 1,400 350 1,179 Comparator Average: 873 16,800 1,161 1,120 1,119 1,115 Marathon: 1,455 17,300 2013 July…
Eagle Ford Well Performance Consistent high performance in 180 day cumulative production Gas Condensate Area 100% Quartile Ranking by 180 day Cum BOE MRO Performance biased to top two quartiles 90% 80% For first and second…
Bakken Production Profile Proven track record Big fields get bigger 80 2013 Plan 2012 Plan 60 2011 Plan 2010 Plan MBOED 2009 Plan 40 20 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 Marathon Oil Corporation…
Bakken Downspacing and deeper benches growing resource inventory 2P Resource Net Wells Defining optimum spacing and (MMBOE) maximizing EUR by area 600 1,668 2,000 Leveraging Three Forks productivity and testing deeper benches…
Bakken Drilling Performance Best in basin 2012 Drilling Benchmark Data Avg Total Measured Depth (TMD) (thousands ft) 1,200 21.2 21.0 1,000 20.8 20.6 800 Avg ft / day 20.4 600 20.2 20.0 400 19.8 19.6 200…
Bakken Well Performance Continuous performance improvement in EUR and IP Completions new hydraulic fracturing technology Higher IPs, cumulative production and EURs Optimal fluid volume / Hydraulic fracturing design Innovative…
Oklahoma Resource Basin Opportunities Continued growth and new play development Woodford Shale in Cana & Knox areas 2 rigs active Mississippi Lime Currently producing 14,000 net BOED 157,000 net acres 615 MMBOE net 2P resource…
Oklahoma Resource Basins Growth Near term oil opportunities with significant upside to NGL and Nat Gas Currently focused on liquids rich 2P Resource Net Wells Knox area of the play (MMBOE) 1,000 1,600 Opportunity to expand drilling…
Renewed Global Exploration Portfolio Focused on high impact oil potential Engaged in 6 proven or emerging hydrocarbon basins Diversified portfolio targeting 8 to 10 impact wells per year Option to develop or monetize success…
Global Exploration Drilling Schedule Executing as per 2013 Plan J F M A M J 2013 J A S O N D Country Well Q1 Q2 Q3 Q4 Kurdistan **Harir-1 45% WI Kurdistan Mangesh - 1 25% WI TD Testing Kurdistan Gara - 1 25% WI Ethiopia Sabisa…
Gabon Exploration Impact Exploration Discovery, significant resource potential Diaba Block (MRO 21.25% WI, TOTAL Operator 42.4% WI Cobalt 21.25% WI) 2.2 MM gross acres Pre-salt play - proven onshore and shallow waters 3D seismic…
Kurdistan Region of Iraq Emerging impact play 2 discoveries to date Atrush block (MRO 15% WI, TAQA operator) 66,000 gross acres 1 discovery and 2 appraisal wells to date (Atrush) Field Development Plan submitted in May 2013 Sarsang…
Ethiopia & Kenya Exploration Impact oil opportunity with running room Tertiary and Cretaceous rift system objectives Muglad Basin 1,950 mmbo disc Melut Basin Ethiopia 1,780 mmbo disc South Omo (MRO 20% WI, Tullow operator)…
Gulf of Mexico Exploration and Appraisal in 3 Plays with world class potential Petronius 8 Paleogene prospects Majority MRO operated Average 70% WI 2 Appraisal wells at Shenandoah Appomattox FPS in 2014 Lobster Gunflint…
Madagascar Prospect Gulf of Mexico: De Soto Canyon 757 De Soto Canyon 757 Petronius MRO 40% WI Water depth: 8,400 ft Appomattox Gunflint Lobster Appraisal Madagascar exploration well Droshky Madagascar Objective: Jurassic…
Relentless Focus on Long-term Shareholder Value Sustainable growth through execution excellence and financial discipline Live within cash flows Reduce operating costs and enhance margins High grade portfolio 7 Billion of transaction…
Appendix Marathon Oil Corporation
Definitions Term Definition 2P Volumes represent most likely deterministic estimates of proved plus probable reserves as defined by the SEC plus volumes with the same technical certainty as 2P proved and probable reserves that are…
Definitions Term Definition BOPD Barrels of oil per day CAGR Compounded average growth rate CAPEX Capital investment and cash exploration expenditures CHK Chesapeake Energy Corporation DVN Devon Energy Corporation ECA Encana…
Definitions Term Definition EUR Estimated ultimate recoverable FEED Front end engineering design FPSO Floating production, storage and offloading vessel GOR Gas to oil ratio HES Hess Corporation In-situ Oil sands too deep…
Definitions Term Definition MBOED Thousand barrels of oil equivalent per day MBOPD Thousand barrels of oil per day MCF Thousand cubic feet MCFD Thousand cubic feet per day MM Million MMBBL Million barrels MMBO Million…
Definitions Term Definition MRO-OP Marathon Oil Corporation operated MUR Murphy Oil Corporation NBL Noble Energy NGL Natural gas liquids OBO Operated by others The business segment through which MROs oil sands mining…
Definitions Term Definition Proved Reserves Proved oil, natural gas and bitumen reserves determined under SEC requirements PSA Production Sharing Agreement Reserves Proved, Probable and Possible oil and gas volumes as defined by…
Definitions Term Definition TLM Talisman Energy Inc. TOC Total organic content Calculated as follows: (Change in share price between the beginning and ending Total Shareholder months in the calculation, based upon the monthly…
Net Liquid Hydrocarbon Sales MBOPD Net Liquid Hydrocarbon sales Year Year Qtr 1 Qtr 2 Qtr 3 Qtr 4 Year Qtr 1 Qtr 2 (MBD) 2010 2011 2012 2012 2012 2012 2012 2013 2013 North America E&P Bakken 12 16 24 25 29 33 28 35 37 Eagle Ford 2 12…
Net Natural Gas Sales MMCFD Year Year Qtr 1 Qtr 2 Qtr 3 Qtr 4 Year Qtr 1 Qtr 2 Net Natural Gas Sales (MMCFD) 2010 2011 2012 2012 2012 2012 2012 2013 2013 North America E&P Alaska 104 94 98 82 88 100 92 31 Bakken 4 6 9 8 7 10 8 13…
Total Worldwide E&P LHC & Natural Gas Sales MBOED Year Year Qtr 1 Qtr 2 Qtr 3 Qtr 4 Year Qtr 1 Qtr 2 Sales (MBOED) 2010 2011 2012 2012 2012 2012 2012 2013 2013 North America E&P Alaska 17 16 16 14 15 17 15 5 Bakken 13 17 26 27 30 35…
Select Balance Sheet / Cash Flow Data (B unless otherwise noted) 2013 1Q 2Q As of quarter ended: Cash and cash equivalents 0.8 0.2 Total debt 6.5 6.5 Cash-adjusted total debt 5.8 6.3 Stockholders equity 18.6 19.0 Cash-adjusted…
Competitive E&P Cost Structure MRO 4 on Total Expenses MRO 7 on Total Expenses excluding including OSM non-cash items and including OSM MRO 2 on Total Expenses MRO 3 on Total Expenses excluding excluding OSM non-cash items and OSM…
Strong Base Assets and Growth Portfolio Europe 225 BOEPD 150 75 Canada 75 0 2012 1H 2013 SCOPD 50 25 0 2012 1H 2013 United States Production Distribution 225 1H 2013 BOEPD 150 Africa United 75 225…
Base Assets Large stable base generates substantial free cash flow Characterized by safe and reliable operations Stable base production 2012 to 2017 350 MBOED CAPEX averages 1.3 B per year Constantly seek to reduce costs and…
Canada Athabasca Oil Sands Project (AOSP) 20% WI Integrated mine and upgrader 1.5 Billion barrels bitumen net 2P resource 255 MBD gross design capacity Namur Pierre 60% WI 51 MBD net pre-royalty River Additional growth and…
Equatorial Guinea Alba field & LPG, EGLNG and Methanol - long lived asset 2012 net sales 36 MBLHCD & 429 MMCFD Alba field 63% WI and operator 489 MMBOE 2P net resource 347 MMBOE net proved reserves at 12/31/12 Alba LPG plant 52%…
Norway Alvheim FPSO - Outperforming expectations Alvheim & Volund 65% WI and operator Vilje 47% WI, operator as of 10/1/2012 Full field development cost of 13.50/BOE 168 MMBOE 2P net resource at 12/31/12 85% Liquids 132 MMBOE…
Libya Status update Pre-conflict production levels reached prior to July 28th strike by oil security force Production significantly curtailed & liftings halted as a result 2012 MRO net sales averaged 45 MBOED Continue providing…
Eagle Ford Shale Margin enhancement through improved well performance Original Q2 2013 Area Increase 30-Day IP 30-Day IP South 1,036 BOED 1,168 BOED Barnhart (4 wells) (8 wells) 13% South Barnhart Original Q2 2013 Area…
Eagle Ford Improving 30 day IPs in Excelsior 250% 20 75% Performance improvement driven by: Perforation cluster spacing Fluid system 200% Surfactant Well s Turned to Sales in Quarter Zipper methodology 15 Channel hydraulic…
Eagle Ford Shale Spacing Pilots Progressing 80% of wells year to date 2013 are 40-60 acre spacing 65 additional wells in pilot density and completions studies are currently producing Early infill well performance consistent with…
Eagle Ford Operations Production enhanced with artificial lift Operated well statistics 530 Operated producing wells as of mid August, 2013 173 Wells on pumping units Focus on long term base production optimization Artificial lift…
Eagle Ford Single well economics excl. acreage acquisition costs Condensate High GOR Oil Low GOR Oil Gross IP 30 day (BOED)* 1,801 553 394 Gross EUR (MBOE)* 1,126 694 463 % Liquids 70% 82% 93% Liquid Revenue % 88% 94% 99% Gross…
Bakken Delivering growth and efficiency 379,000 Net acres 2Q 2013 Production 39,000 net BOED Average WI MRO operated WI 85% Diomedes OBO WI 10% Cazador 5 Active drilling rigs 1 frac crew Myrmidon Menelaus Aeneas Helen Elk…
Bakken Single well economics excl. acreage acquisition costs Hector Myrmidon Gross IP 30 day (BOED)* 785 1,061 Gross EUR (MBOE)* 608 913 % Liquids 94% 92% Gross Cost MM 8.6 8.7 (includes facility costs) Acre Spacing 320 target…
Oklahoma Resource Basins Production Profile Value in liquids focused growth with gas upside 60 Rate of growth dependent upon future natural gas and NGL prices P90 40 MBOED P10 20 P90 P10 - 2010 2011 2012 2013…
Anadarko Woodford Single well economics excl. acreage acquisition costs E. KNOX: Condensate CANA: Condensate Gross IP 30 day (BOED)* 1,092 730 Gross EUR (MBOE)* 1,274 908 % Liquids 56% 45% Liquid Revenue % 67% 57% Gross Cost MM…
Global Exploration Portfolio Norwegian Sea Utgard High Cretaceous-Jurassic Sandstones 620,000 acres 1,400 - 3,000 MMBOE Gulf of Mexico Kurdistan Fractured Subsalt Miocene Mesozoic-Permian and Paleogene Carbonates Sandstones…
Gunflint Discovery Gulf of Mexico: Mississippi Canyon Discovery well drilled in 2008 MRO 18.23% WI, Noble (operator) 31.14% WI, Ecopetrol 31.50% WI, Samson 19.13% WI Water Depth: 6,100 ft Encountered over 600 ft of net pay in 7…
Shenandoah Discovery Gulf of Mexico: Walker Ridge Discovery well drilled in 2008 Coronado Appraisal well (Block 51) Solomon MRO 10% WI, Anadarko (Op.) 30% WI, Conoco 30% WI, Cobalt 20% WI, Venari 10% WI Key Largo Water Depth:…
Norway Exploration New high impact potential play 70N Barents Sea PL 330, Norwegian Sea (MRO Aasta Utgard High Norwegia 30% WI, RWE operator) Hansteen n Sea 65N 182,000 gross acres 60N On the Utgard High Interpreted as an…
High Income per Barrel Business 2012 Income per BOE 18 16 14 12 10 /boe 8 6 4 2 0 A B C MRO D E F G H I J K Source: Company annual reports Includes OSM results and excludes R&M income and discontinued operations…
Strong Dividend Enhances Total Shareholder Return Annualized indicative dividend yield at 8/31/13 5 4 3 % 2 1 0 A B C MRO D E F G H I J K Source: Bloomberg for competitors Comparator group contains: APA, APC, CHK,…
Estimated 2013 Production & Tax Rates by Jurisdiction Jurisdiction Approximate Production % Statutory Tax Rate U.S. 42 36%* Norway 21 78%** EG 30 25%** Angola 1 50% U.K. 6 62%** Total E&P 100 (exc Libya) Libya 93%**…
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