Marathon Oil Corporation Firm Plans to Move Forward As Two Strong Independent Companies January 13 13, 2011
Todays Announcement Marathon Board of Directors approved plans for moving forward with the spin-off of the Downstream Business Results in two strong highly focused energy companies Marathon Oil Corporation (MRO) Marathon Petroleum…
Anticipated Benefits of the Transaction Enhanced flexibility to pursue tailored strategies - Each company should have a greater ability to make business and operational decisions in the best interests of its business and to allocate…
Corporate Governance and Dividend Policy Each company will be led by the experienced directors and management that have led Marathon MPC Thomas J. Usher Non-Executive Chairman Gary R. Heminger President and CEO MRO Clarence Cl…
Two Strong Focused Energy Companies Marathon Oil Corporation (MRO) Substantial, geographically diverse oil and gas portfolio Liquids focused with upside to long term gas Stable base with low risk defined growth Impact p rank…
Percent PDP* of Total Proved Reserves EOY 2009 100 90 80 70 60 50 % 40 30 20 10 0 MUR OXY DVN TLM MRO APC APA NBL HES ECA CHK EOG Source: Company annual reports. 6:1 oil/gas ratio *PDP Proved Developed Producing 9
Geographic Distribution of Proved Reserves EOY 2009 100 90 Geographic Distribution n 80 70 60 50 40 % Reserve G 30 20 10 0 CHK ECA DVN EOG APC OXY APA NBL MRO MUR TLM HES 6:1 oil/gas ratio N. America Other OECD…
Reserve/Production Ratio (R/P) Yr. 2009 18 16 14 12 R/P, Yrss. 10 8 6 4 2 0 CHK OXY EOG DVN APA MRO NBL APC ECA HES TLM MUR YE2009 Reserves/2009 Production. 6:1 oil/gas ratio Source: Company annual reports 11
2010 YTD Net Production Volumes 1/1 thru 9/30/2010 250 200 150 MMBOE 100 50 0 OXY APA APC DVN HES MRO TLM ECA CHK EOG MUR NBL 13:1 6:1 Source: Q3 2010 Company Earnings Releases 12
Upstream Adjusted Income, /BOE 1/1 thru 9/30/2010 18 16 14 12 OE ncome,/BO 10 8 In 6 4 2 0 OXY APA MRO HES MUR CHK NBL DVN TLM ECA APC EOG Source: Company annual reports MRO upstream includes after tax income of…
U.S. Liquids-Rich Shale Plays Based on Net Acreage, 000s Acres 3,000 2,500 2,000 000s acress 1,500 1 000 1,000 500 0 CHK EOG DVN APC APA HES MRO NBL MUR OXY ECA TLM Source: The most recent available public sources…
Focused and Integrated Asset Base Flexibility to Achieve Peer-Leading Results Refineries Terminals Pipelines Coastal water terminals Inland water terminals Refineries Pipelines Terminals Speedway Brand Marketing Inland…
Downstream Position (MB/D) U.S. Crude Refining Capacity (1) () of U.S. Refineries (1) 3 000 3,000 15 13 2,000 12 1,969 1,876 2,000 10 1,402 7 7 1,122 6 6 6 941 5 1 000 1,000 823 755 675 658 5 3 3 0 0 C w/o alero esoro…
Garyville Operating Efficiencies Base B Garyville G ill refinery, fi 2008 SSolomon l survey Best U.S. cash cost operating expense Second Second-best best U.S. U S Energy Intensity Index GME improves overall fixed cash cost…
Detroit Heavy Oil Upgrade Project Positioned to capitalize on Canadian oil sands production Increases heavy oil capacity an additional 80 000 B/D 80,000 B/D, iincluding l di diffi difficult lt tto process Canadian crudes Crude…
Geographic Advantage Percentage g of Refiningg Capacity p y byy PADD 60% 54% 49% 46% 40% 21% 20% 18% 8% 4% 0% PADD I PADD II PADD III PADD IV PADD V Industry Distribution MPC w/o St. Paul Park Marathon has the highest…
MPC vs. Competitors (Pre-tax Adjusted Domestic Operating Income per Barrell off Crude C d Oil Throughput) h h ) 15 MPC 10 Group Range BL /BB 5 0 -5 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010…
Financial Objectives Two strong, investment grade companies Each will have sufficient liquidity and financial flexibility to pursue their strategic objectives Committed bridge financing from Morgan Stanley and JP Morgan in place;…
Financing Structure at Spin-off Date MPC (Downstream) 2 billion new 4 year revolving credit facility 2.5 - 3 billion in new long term debt 750 million minimum balance sheet cash MRO (Upstream) Use proceeds from new MPC debt and…
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