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2Q 2012 Earnings Call – Marathon Oil Corp

Marathon Oil Corp · Aug 1, 2012 · 35 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. 2Q 2012 Earnings Call – Marathon Oil Corp – slide 1
    Second Quarter 2012 Earnings Conference Call and Web Cast August 1, 2012 Marathon Oil Corporation
  2. 2Q 2012 Earnings Call – Marathon Oil Corp – slide 2
    2Q-12 Earnings (13)% 2Q 2012 1Q 2012 2Q 2011 Net Income from continuing operations* 393 MM 417 MM 298 MM Adjusted Net Income* 416 MM 478 MM 689 MM Net Income per Diluted Share* Net Income per Diluted Share 0 56 0.56 0 59 0.59 0 42…
  3. 2Q 2012 Earnings Call – Marathon Oil Corp – slide 3
    Adjusted Net Income 2Q-12 vs. 1Q-12 Variance Analysis 600 13 (77) 76 13 478 (62) (25) 416 400 MM M 200 0 1Q 2012 U.S. E&P Int E&P OSM IG Income Taxes Other 2Q 2012 (Pretax) (Pretax) (Pretax) (Pretax) (Pretax)…
  4. 2Q 2012 Earnings Call – Marathon Oil Corp – slide 4
    Upstream LHC Sales Volumes Excluding Libya 1Q-12 actual vs. 2Q-12 actual 1Q Actual Sales Volumes 2Q Actual Sales Volumes 266 MBOD 271 MBOD Canada 44 Canada 44 Canada 44 Canada 44 Norway 90 Norway 77 U.S. 90 U.S. 93 U.K.…
  5. 2Q 2012 Earnings Call – Marathon Oil Corp – slide 5
    E&P Earnings 2Q-12 vs. 1Q-12 Variance Analysis 1,000 800 295 (222) 600 (5) (74) MM 477 (54) 417 400 200 0 1Q 2012 Volume Variance Price Variance DD&A Income Taxes Other 2Q 2012 (Pretax) (Pretax) (Pretax)…
  6. 2Q 2012 Earnings Call – Marathon Oil Corp – slide 6
    U.S. E&P Earnings 2Q-12 vs. 1Q-12 Variance Analysis 150 18 (99) 109 100 MM 23 70 23 (4) 50 0 1Q 2012 Volume Variance Price Variance DD&A Other Income Taxes 2Q 2012 (Pretax) (Pretax) (Pretax) (Pretax) Marathon…
  7. 2Q 2012 Earnings Call – Marathon Oil Corp – slide 7
    U.S. E&P Cost per BOE Trend 70 60 50 40 /BOE 30 20 10 0 1Q 2011 1Q 2011 2Q 2011 2Q 2011 3Q 2011 3Q 2011 4Q 2011 4Q 2011 1Q 2012 1Q 2012 2Q 2012 2Q 2012 Field level controllable cost DD&A Other Production & ad…
  8. 2Q 2012 Earnings Call – Marathon Oil Corp – slide 8
    Lower 48 Onshore Production Forecast Available for Sale 150 P90 125 +7% P10 100 BOED 75 MB 50 25 0 3Q 2011A 4Q 2011A 1Q 2012A 2Q 2012A 3Q 2012E 4Q 2012E % Oil 51 56 57 59 62 % NGL 4 6 6 7 8 Marathon Oil…
  9. 2Q 2012 Earnings Call – Marathon Oil Corp – slide 9
    International E&P Earnings 2Q-12 vs. 1Q-12 Variance Analysis 800 293 (138) 600 (28) (51) (97) MM 400 368 347 200 0 1Q 2012 Volume Variance Price Variance DD&A Other Income Taxes 2Q 2012 (Pretax) (Pretax)…
  10. 2Q 2012 Earnings Call – Marathon Oil Corp – slide 10
    International E&P Cost per BOE Trend 25 20 15 /BOEE 10 5 0 1Q 2011 2Q 2011 3Q 2011 4Q 2011 1Q 2012 2Q 2012 Field level controllable cost DD&A Marathon Oil Corporation 11
  11. 2Q 2012 Earnings Call – Marathon Oil Corp – slide 11
    E&P Segment 2Q-12 E&P Volumes, including Libya Production available for sale was flat vs 1Q12 Continued rampup in U.S. resource plays, Eagle Ford, Bakken, and Woodford, and Libya offset by turnarounds in E G Norway and Gulf of…
  12. 2Q 2012 Earnings Call – Marathon Oil Corp – slide 12
    E&P Segment E&P Production Available for Sale Volumes without Libya 400 371 359 374 370 375 362 340 343 328 317 300 MBOED 200 M 100 0 1Q 2010 2Q 2010 3Q 2010 4Q 2010 1Q 2011 2Q 2011 3Q 2011 4Q 2011 1Q 2012 2Q…
  13. 2Q 2012 Earnings Call – Marathon Oil Corp – slide 13
    Oil Sands Mining Earnings 2Q-12 vs. 1Q-12 Variance Analysis 60 24 (4) 51 41 (39) 40 26 MM 20 3 0 1Q 2012 1Q 2012 Price Variance Price Variance Volume Variance Volume Variance Operating Costs Operating Costs Other…
  14. 2Q 2012 Earnings Call – Marathon Oil Corp – slide 14
    2Q-12 Integrated Gas Results Segment income: 2Q12 13 MM, 1Q12 4 MM Net LNG sales volumes MTD : 2Q12 5,467 vs. 1Q12 6,291 Q , Q , 12 Cargoes in 2Q12 Down slightly because of turnaround that commenced in late March Net methanol…
  15. 2Q 2012 Earnings Call – Marathon Oil Corp – slide 15
    Total Company Cash Flow 2012 YTD 3,000 2,317 (575) 2,500 (2,181) 2,000 MM 1,500 1,000 493 (10) 452 500 430 218 ((240)) 0 12/31/11 Op Cash Flow Working Cash Capital Dispositions Dividends Net Debt Other 06/30/12…
  16. 2Q 2012 Earnings Call – Marathon Oil Corp – slide 16
    2Q-12 Select Financial Data 2Q12 Corporate effective tax rate of 72% 64% excluding Libya Net DebttoCap Ratio Cash + Cash Equivalents 30% 6 4.7 4.6 Cash + Cash Equivaalents Nett DebttoCap % % 21% 20% 20% 20% 4…
  17. 2Q 2012 Earnings Call – Marathon Oil Corp – slide 17
    Marathon Oil Strong, Focused and Disciplined Growth Strong and stable base assets Executed major turnarounds ahead of schedule and under budget Delivered production available for sale at upper end of guidance Profitable growth in…
  18. 2Q 2012 Earnings Call – Marathon Oil Corp – slide 18
    Eagle Ford Shale Activity & Results Oil 2012 Activity Q1 Q2 YTD Bouldin 2H 800 BOPD, 50 BPD NGL, Condensate Wells Spud 46 61 107 400 MCFD Dry Gas Wells on Production 22 50 72 Drilling Rig Ann Friar Thomas 2H 600 BOPD, 465 BPD…
  19. 2Q 2012 Earnings Call – Marathon Oil Corp – slide 19
    Eagle Ford Shale Activity Growth Driving Production Spud to Spud Days Nearly 50% quarter on quarter 50 production growth p g 40 Increased volumes more than 17,000 30 BOED in 2012 20 Anticipate strong 2H12 growth 10 0…
  20. 2Q 2012 Earnings Call – Marathon Oil Corp – slide 20
    Eagle Ford Operations Building Facilities & Midstream Capacity Gas Gathering Oil Gathering Central Battery May Station Union Battery Under Oil Terminal Construction Barnhart Ranch Sugarloaf Station Gas Sales…
  21. 2Q 2012 Earnings Call – Marathon Oil Corp – slide 21
    Eagle Ford Shale Paloma Acquisition Impact 150 Projected Net Production Oil Condensate Gas Dry Gas 100 Liquids MBOED Marathon Paloma 50 5 San Christoval Ranch 5 Shown on Dry Gas + NGL basis 0 Blackjack 2011 2012…
  22. 2Q 2012 Earnings Call – Marathon Oil Corp – slide 22
    Eagle Ford Shale 2012 Spacing Pilot Program Ten spacing pilots planned in 2012 Five producing at 40 to 100acre spacing 350 40acre Five more in 2012 from 40 to 80acre spacing spacing test Additional targeted pilot testing in…
  23. 2Q 2012 Earnings Call – Marathon Oil Corp – slide 23
    Appendix Marathon Oil Corporation
  24. 2Q 2012 Earnings Call – Marathon Oil Corp – slide 24
    Upstream Volumes, Exploration Expenses & Effective Tax Rate 2012 Actuals & Estimates (excluding Libya) 2012 1QA 2QA 3QE 4QE Year Est* U.S. E&P Net Sales Volumes*: Liquid Hydrocarbons (MBD) 90 93 102 107 Natural Gas (MMCFD) 344 319 320…
  25. 2Q 2012 Earnings Call – Marathon Oil Corp – slide 25
    Upstream LHC Sales Volumes Excluding Libya 2Q-12 actual vs. 3Q-12 estimate 2Q Actual Sales Volumes 3Q Estimated Sales Volumes 271 MBOD 270 295 MBOD Canada Canada 6% 16% Norway 19% Norway 29% 28% U.K. U.K. 5% U.S. 8% U.S.…
  26. 2Q 2012 Earnings Call – Marathon Oil Corp – slide 26
    Reconciliation Net Income to Adjusted Net Income (MM) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2011 2011 2011 2011 2012 2012 2012 2012 Net Income 996 996 405 549 417 393 Exclude discontinued Exclude discontinued operations (541) (698) 0 0 0 0 Income…
  27. 2Q 2012 Earnings Call – Marathon Oil Corp – slide 27
    Net Income (MM unless otherwise noted) 2011 2012 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q E&P Segment Income 668 601 330 558 477 417 Oil Sands Mining Segment Income Oil Sands Mining Segment Income 32 69 92 63 41 51 Integrated Gas Segment Income…
  28. 2Q 2012 Earnings Call – Marathon Oil Corp – slide 28
    Select Balance Sheet / Cash Flow Data (B unless otherwise noted) 2011 2012 2Q 3Q 4Q 1Q 2Q 3Q 4Q q As of quarter ended: Cash and cash equivalents 4.7 4.6 0.5 0.5 0.5 Total debt 5.0 5.0 4.8 4.8 5.3 Cashadjusted total debt…
  29. 2Q 2012 Earnings Call – Marathon Oil Corp – slide 29
    Capital, Investment & Exploration* Spending Reconciliation MM 2012 2Q 2012 Forecast YTD Capital expenditures 4,602 2,375 Investments in equity method investees 1 0 & others EExploration costs other than l ti t th th…
  30. 2Q 2012 Earnings Call – Marathon Oil Corp – slide 30
    E&P Supplemental Financial Data Operating Costs per BOE - 2012 Estimates 2012 U S E&P U.S. E&P Field level controllable costs 8.509.50 DD&A* 23.0024.50 O h ** Other** 9 50 11 00 9.5011.00 Total Costs** 41.0045.00…
  31. 2Q 2012 Earnings Call – Marathon Oil Corp – slide 31
    E&P Cost per BOE Trend 40 35 30 25 /BOE 20 15 10 5 0 1Q 2011 2Q 2011 3Q 2011 4Q 2011 1Q 2012 2Q 2012 Field level controllable cost DD&A Other Production & ad valorem taxes Exploration expenses Marathon Oil…
  32. 2Q 2012 Earnings Call – Marathon Oil Corp – slide 32
    2Q-12 E&P Expenses and Profitability 2Q12 Income per BOE decreased 18% from 1Q12, 11.23/BOE vs 13.69/BOE Decrease primarily due to lower LHC prices and higher exploration expenses, partially offset by lower operating costs and…
  33. 2Q 2012 Earnings Call – Marathon Oil Corp – slide 33
    E&P Realizations Average Realized Prices (excluding 1Q 2011 2Q 2011 3Q 2011 4Q 2011 1Q 2012 2Q 2012 2Q VS 1Q hedging) U.S. Crude Oil & Condensate (/BBL) 88.20 101.96 90.67 98.13 97.28 88.68 (8.60) U.S. Natural Gas Liquids (/BBL) 57.88…
  34. 2Q 2012 Earnings Call – Marathon Oil Corp – slide 34
    Estimated 2012 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. U 6 62%** 6 % Total E&P 100 (exc Libya) Libya…
  35. 2Q 2012 Earnings Call – Marathon Oil Corp – slide 35
    Marathon Oil Corporation

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