Bank of America Merrill Lynch 2011 Global Energy Conference November 15, 2011 Clarence P. Cazalot, Jr Chairman, President and CEO Marathon Oil Corporation
Marathon Oil A Strong New E&P Company Strong and Stable Base Assets Generate Significant Cash YTD Sept 2011 Net cash provided by continuing operations - 4.4 B 2010 Proved reserves - 1.6 BBOE, 73% liquids 5-7% CAGR estimated…
2012 - 2016 Expected Capital Allocation Estimated Annual CAPEX Base CAPEX 4.5-5.5 B Corporate Canada Other 3% 32% International 38% U.S. Exploration p o at o 30% 8% Base 24% Growth CAPEX Other 16% Bakken Growth DJ Basin…
Strong Base Assets and Growth Portfolio Europe Production* 150 MBOED 100 50 0 Canada Production* 2010 2011 YTD 40 MSCOD 20 0 2010 2011 YTD U.S. Production* 150 Africa Production* 100 200 MBOED D 50…
Base Assets Large Stable Base Generates Substantial Free Cash Flow Characterized by safe and reliable operations Stable base production 2012-2016 340 MBOED 2012 expected transitional year with anticipated Libya production restart…
Canada Athabasca Oil Sands Project 20% Working Interest Integrated mine & upgrader 1.6 Billion BBLS Bitumen net P50 resource 255 MBD gross production capacity Namur Pierre 60% WI 51 MBD net pre-royalty River Additional 21 MBD…
Equatorial Guinea Alba Field & LPG, EGLNG, & Methanol - Long Lived Asset 2011 September 30 YTD Net Sales 37 MBLHCD & 439 MMCFD Alba Alb Field Fi ld 63% WI & Operator 520 MMBOE P50 net resource 395 MMBOE net proved reserves Alba…
Norway Alvheim FPSO - Outperforming Expectations with Additional Satellite Potential Alvheim & Volund 65% WI & Operator / Vilje 47% WI Full field developed at cost of 13.25/BOE 200 MMBOE P50 net resource, 67 MMBOE produced by…
High Liquids Content 2011 YTD through Q3 Liquids as % of Total Production 100 High leverage to liquids 80 60 ds % Liquid 40 20 0 A B MRO C D E F G H I J K Source: Company quarterly reports Includes OSM results for…
Advantaged Liquids Position 2011 YTD through Q3 International Liquids as % of Total Liquids Production 100 High leverage to liquids Strong leverage to Brent 80 % Internatiional 60 40 20 0 A B MRO C D E F G H I J K…
Very Competitive E&P Cost Structure MRO 5 on Total Expenses High leverage to liquids MRO 3 on Total Expenses Strong leverage to Brent excluding non-cash items Competitive cost structure Total Expenses Total Expenses excluding…
High Income per Barrel Base Business 2011 YTD through Q3 Net Income per BOE 25 High leverage to liquids Strong leverage to Brent 20 Competitive cost structure IIncome, //BOE Fourth highest net income per BOE 15 10 5…
Continued Focus on Returns 2011 YTD through Q3 ROCE 20 High leverage to liquids Strong leverage to Brent 16 Competitive cost structure Fourth highest net income per BOE 12 Liquids focus and high net income ROCE per BOE drive…
Growth Assets Significant Low Risk Production Growth 250 50% CAGR Canadian In-Situ 80% 80% Liquids 200 CAPEX 2.5B - 3.5B per year 150 MBOED 100 Eagle Ford Gulf of Mexico Bakken Anadarko Woodford 50 DJ Basin 0…
Lower 48 Production Forecast Available for Sale (Excludes Alaska and GOM) 150 65% Liquids P90 125 P10 100 55% 55% Liquids MBOED 75 50 25 0 3Q 2011 4Q 2011 1Q 2012 2Q 2012 3Q 2012 4Q 2012 Marathon Oil…
Driving Growth and Value Liquids Rich Shale Resource Plays Focused on North America liquids growth Developed low risk liquids rich shale play position Established top-tier position in core of Eagle Ford play Improved reserve…
Eagle Ford Shale Premier U.S. Resource Play Uniform, continuous, and predictable shale across the play Strong operated position 300,000 net acres expected by year end 2011 Approximately 90% operated with 80% average working…
Eagle Ford Shale Premier U.S. Resource Play 2 2 Oxford 1H, 58% WI 24-hr IP: 300 MCFD (shrunk) 5 Hedtke 1H, 58% WI 24-hr IP: 500 MCFD (shrunk) 600 BOPD, 40 BNGLPD 700 BOPD, BOPD 80 BNGLPD Mauch Kreuger 1H, 78% WI…
Eagle Ford Shale Production by Year 120 20 CAPEX 1.4B per year 100 Gas Liquids 80 D* Net MBOED 60 40 20 0 2011 2012 2013 2014 2015 2016 *Shown on Dry Gas + NGL basis 2011 annualized number reflects November 1st…
Eagle Ford Shale Single Well Economics Condensate Volatile Oil Black Oil IP 30 day (BOED)* 1,650 675 385 EUR (MBOE)* 965 645 445 % Liquids 72% 77% 95% Liquid Revenue % 83% 87% 97% Gross Cost MM 7.9 7.7-8.1 7.9 (includes facility…
Eagle Ford Shale Logistics & Transportation Basin peak production 1,000 MBLHCD MRO 85 MBLHCD net by 2016 MRO pipeline capacity 28 MBLHCD 150 MMCFD MRO actively engaged for additional capacity 1,200 MBLHCD of New Eagle…
Eagle Ford Shale Upside Potential Further 80 acre development and potential down spacing Optimization of drilling program Longer laterals Pad drilling Completion design Lower drilling, facilities, and service costs Cycle time…
Bakken Shale Delivering Growth and Efficiency 406,000 net acres Average MRO-op WI 81% / OBO WI 17% P50 Resource potential 300 MMBOE 420-640 acre average well spacing Increased program activity 6 rigs currently drilling 8 rigs by…
Bakken Shale Delivering Growth and Efficiency Diomedes Cazador Johnson 44-32H, 93% WI 24-hr IP: 1,200 BOPD One Feather USA 11-17H, 75% WI Ella USA 11-16H, 98% WI 24-hr IP: 1,300 BOPD 24-hr IP: 1,800 BOPD 2 Myrmidon…
Bakken Shale Production by Year 40 CAPEX 700MM per year 30 Gas Liquids Net MBOEED 20 10 0 2011 2012 2013 2014 2015 2016 Marathon Oil Corporation 26
Bakken Oil Production & Export Capacity Current take away capacity tight MRO sells to local market SSubstantial b t ti l railil and d pipeline i li capacity it expected t d 1,600 1,400 1 200 1,200 1,000 MBOPD 800…
Bakken Shale Single Well Economics Aeneas / Myrmidon Hector / Ajax IP 30 day (BOED) 595 350 EUR (MBOE) 577 498 % Liquids 89% 93% Liquid Revenue % 95% 97% Gross Cost MM 8.5 8.5 (includes facility costs) Acre Spacing 420 420…
Anadarko Woodford Shale Expanding Legacy Position in Liquids 160,000 net acres Average MRO-op WI 55% / OBO WI 20% P50 Resource potential 300 MMBOE 160 acre average well spacing Increased program activity 7 rigs currently drilling…
Anadarko Woodford Shale Expanding Legacy Position in Liquids 2 Rig Location Co-Op Well Gracie, 11% WI 24-hr h IP: 1,900 MCFD (shrunk) ( h k) OBO Well 90 BOPD, 160 BNGLPD 2 Patricia, 19% WI 24-hr IP: 1,000 MCFD (shrunk)…
DJ Basin (Niobrara) Emerging Growth Play 144,000 net acres Successfully de-risked play through 70/30 joint venture with Marubeni Joint venture recouped entire initial investment Average MRO-op WI 55% / OBO WI 15% Path forward…
DJ Basin (Niobrara) Emerging Growth Play Corn Creek Rig Location Horizontal Well Hawk Springs Vertical Well Antelope Rawhide D Draw Flats Rawhide Flats 1, 70% WI Completion planned Dec Owl Creek Pawnee Creek Pawnee…
Angola Block 31, 10% WI MRO acreage PSVM Development Oil discovery Conversion FPSO, 150 MBOED BLOCK 31 PSVM Marte 10% WI Leda Venus Development 6,500 ft water depth Saturno Area Terra Plutao Potential Mid FPSO integration…
Canada In-situ 2011 Birchwood Appraisal MRO-operated, 100% working interest 14,000 14 000 net acres Namur Pierre 60% WI 400 MMBBL Bitumen net P50 resource River Appraisal drilling completed March 2011 100 100 wells drilled and…
Exploration Drives value beyond estimated 5-7% production growth CAPEX 0.5B* per year Areas of focus Gulf of Mexico Kurdistan Region of Iraq Poland Si ifi Significant Potential P i l Value V l * Does not include…
Gulf of Mexico 21 Prospects with 1 BBOE net unrisked mean resource 44% Miocene 56% Paleogene Avg. WI - 50% 14 of the 21 prospects MRO operated Petroneus Innsbruck - permit received Stegodon WI - 85% & Operator Mammoth…
Kurdistan Region of Iraq World Class Underexplored Play 1.6 BBOE Gross unrisked mean potential across four blocks Stacked pay, 4-way surface anticlines Atrush - 20% WI 66,500 gross acres Tested 6,000 BOPD gross - 3 horizons…
Poland Emerging Unconventional Play Working Interest 51% Farmed out 40% to Nexen Farmed out 9% to Mitsui 11 Concessions Total 1.2 million net acres Exploration p phase: p 2D seismic / 1 well commitment per block Baltic…
Driving Growth and Value Strong financial position Fund CAPEX from cash flows Completed repurchase of 12MM shares for 300MM in Q3 2011 Continued focus on high grading portfolio through divestitures 3.5 Billion in divestitures…
Strong Dividend Enhances Total Shareholder Return Annualized Indicative Dividend Yield 6/30/11 3.00 2.00 % 1 00 1.00 0.00 A MRO B C D E F G H I J K Source: Bloomberg for competitors Comparator group contains: APA, APC,…
Marathon Oil Driving Shareholder Value Close Hilcorp transaction and begin ramp up Increased rig activity in U.S. resource plays Strong 2011 reserve replacement expected First production Angola Block 31 PSVM mid 2012 Full year AOSP…
Appendix Marathon Oil Corporation
Definitions Term Definition EG Equatorial Guinea EG LNG q Equatorial Guinea Liquified q Natural Gas p production facilityy EOG EOG Resources EUR Estimated Ultimate Recoverable F&D Finding & Development FLC Field Level…
Definitions Term Definition IP Initial production rate LPG Liquefied petroleum gas LNG Liquefied natural gas M Thousand MBD Thousand barrels of bitumen p per dayy MBLHCD Thousand barrels of liquid hydrocarbons per day MBOED…
Definitions Term Definition MRO Marathon Oil Corporation MRO-OP Marathon Oil Corporation operated MSCOD Thousands of barrels of Synthetic Crude Oil per day MUR Murphy Oil Corporation NBL Noble Energy Net Cash Flow Operating cash…
Definitions Term Definition PSVM Plutao, Saturno, Venus, Marte development area PV10 Present value at 10% discount rate Reserves Proved, Probable and Possible oil and gas volumes as defined by the SEC Resources Total Resource…
Definitions Term Definition TLM Talisman Energy TTotal t l Shareholder Sh h ld Calculated C l l t d as ffollows: ll (Ch (Change iin share h price i b between t th the b beginning i i andd ending di Return or TSR months…
U.S. Resource Position Backbone of Growth Anadarko DJ Basin Eagle Ford* Bakken Woodford* (Niobrara)* Net acres 300,000 406,000 160,000 144,000 Potential gross wells 2,200-4,400 2,000-2,250 1,800-2,000 600-800 81% CO-OP 55% CO-OP…
Net Liquid Hydrocarbon Sales MBOPD Net Liquid Hydrocarbon sales Year Qtr 1 Qtr 2 Qtr 3 Qtr 4 Year Qtr 1 Qtr 2 Qtr 3 Qtr 4 YTD (MBD) 2009 2010 2010 2010 2010 2010 2011 2011 2011 2011 2011 United States B kk Bakken 9 11 11 12 14 12 13…
Net Natural Gas Sales MMCFD Year Qtr 1 Qtr 2 Qtr 3 Qtr 4 Year Qtr 1 Qtr 2 Qtr 3 Qtr 4 YTD Net Natural Gas Sales (MMCFD) 2009 2010 2010 2010 2010 2010 2011 2011 2011 2011 2011 United States Alaska 87 108 91 90 128 104 126 87 72 95…
Total Worldwide LHC & Natural Gas Sales MBOED Year Qtr 1 Qtr 2 Qtr 3 Qtr 4 Year Qtr 1 Qtr 2 Qtr 3 Qtr 4 YTD Sales (MBOED) 2009 2010 2010 2010 2010 2010 2011 2011 2011 2011 2011 United States Alaska 15 18 15 15 21 17 21 15 12 16…
Select Balance Sheet / Cash Flow Data (B unless otherwise noted) 2011 1Q 2Q 3Q 4Q As of quarter ended: Cash and cash equivalents 5.7 4.7 4.6 Total debt 8.3 5.0 5.0 Cash-adjusted total debt 2.6 0.3 0.4 Stockholders equity 24.7…
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