Marathon Oil Announces 2021 Capital Budget and Reports Fourth Quarter and Full Year 2020 Results
Marathon Oil Corporation (NYSE:MRO) reported a fourth quarter net loss of $338 million, with an adjusted net loss of $98 million. For the full year 2020, the company incurred a net loss of $1.451 billion. The 2021 capital expenditure budget is set at $1 billion, targeting $1 billion in free cash flow at $50/bbl WTI. The company aims for a cumulative free cash flow of ~$5 billion through 2025, with a breakeven below $35/bbl WTI. Marathon also reinstated its dividend, returned ~$250 million to investors, and plans to reduce gross debt by $500 million in 2021.
- 2021 capital expenditure budget of $1.0 billion aimed at strong corporate returns and free cash flow generation.
- Expected free cash flow (FCF) of ~$1 billion at $50/bbl WTI, with a breakeven below $35/bbl WTI.
- Reinstated dividend in Q4 2020, returning ~$250 million to investors.
- Reduced production and general administrative costs by over 20% compared to the prior year.
- Maintained $3.7 billion liquidity and an investment-grade credit rating.
- Fourth quarter and full year 2020 net loss of $338 million and $1.451 billion, respectively.
- Adjusted net loss of $919 million for the full year 2020.
- Year-end 2020 proved reserves of 972 million boe reduced due to lower commodity prices.
HOUSTON, Feb. 22, 2021 /PRNewswire/ -- Marathon Oil Corporation (NYSE:MRO) reported a fourth quarter 2020 net loss of
Marathon Oil reported full year 2020 net loss of
Highlights
- 2021 capital expenditure budget of
$1.0 billion consistent with transparent capital allocation framework - Expected FCF of ~
$1 billion at$50 /bbl WTI with reinvestment rate of ~50% 1 - Expected FCF breakeven below
$35 /bbl WTI2 - Total Company oil production flat to fourth quarter 2021 exit rate
- Targeting
$500 million of gross debt reduction
- 5 Year Benchmark Maintenance Scenario underscores portfolio strength and free cash flow sustainability
- Cumulative potential FCF of ~
$5 billion at flat$50 /bbl WTI from 2021 to 20253 - Expected FCF breakeven below
$35 /bbl WTI2 throughout period $1.0 to$1.1 billion of capex per year with flat total Company oil production
- Strong fourth quarter and full year 2020 financial and operational results
- Fourth quarter free cash flow of
$162 million ; full year 2020 free cash flow of$277 million - Reinstated base dividend in fourth quarter; returned ~
$250 million to investors in 2020, including ~$150 million of dividends and share repurchases and$100 million gross debt reduction - Full year total capital expenditures of
$1.16 billion , below guidance of$1.2 billion - Reduced both production and general and administrative costs by more than
20% vs. prior year - Fourth quarter and full year total Company oil production of 172,000 net bopd and 190,000 net bopd, both at guidance midpoint
$3.7 billion of liquidity at year-end, including$3.0 billion undrawn revolving credit facility and$0.7 billion of cash and cash equivalents; investment grade credit rating at all three primary rating agencies- CEO and Board compensation reduced
25% 4 and compensation framework improved to further enhance alignment with investors - Expect 2020 GHG emissions intensity reduction of approximately
20% 5 vs. 2019; improved total Company gas capture to98.5% for fourth quarter 2020 - Added 2021 GHG emissions intensity target representing an approximate
30% reduction vs. 2019; announced medium-term goal to reduce GHG emissions intensity by at least50% by 2025 vs. 2019
"While 2020 was a challenging year for our industry, I am proud of our many accomplishments, especially our record setting safety performance as we successfully managed through the ongoing COVID-19 pandemic as critical essential infrastructure providers," said Chairman, President, and CEO Lee Tillman. "In addition, we reduced our cash costs by more than
"For 2021," Tillman continued, "we have set a maintenance capital budget that prioritizes corporate returns and free cash flow generation over production growth. Consistent with our commitment to capital discipline, we won't raise our level of spending even if recent commodity price strength persists. We will simply generate more free cash flow. Our 2021 budget and our newly disclosed 5 Year Benchmark Maintenance Scenario are both evidence of our high quality portfolio, advantaged capital efficiency, and the sustainability of our strong financial performance. We believe we are well positioned to compete effectively with the broader S&P 500, and to continue executing on our transparent capital allocation framework that prioritizes free cash flow generation, balance sheet strength, and return of capital to investors. Further, we have taken important steps to improve alignment between our management team and investors through proactive compensation changes and are committed to continuing to reduce our GHG emissions intensity."
2021 Overview
Marathon Oil today announced a
5 Year Benchmark Maintenance Capital Scenario
To highlight the strength of Marathon Oil's portfolio and the sustainability of its financial performance, the Company has disclosed a 5 Year Benchmark Maintenance Capital Scenario designed to hold fourth quarter 2020 total Company oil production flat through 2025. This 5 year scenario includes total capital spending of approximately
Continued Cash Cost Reduction Initiatives
During 2020, Marathon Oil took aggressive and decisive action in response to a challenging commodity price and business environment, realizing a reduction of over
Consistent with its focus to continually optimize its cost structure, Marathon Oil expects to drive further cash cost reductions in 2021 and beyond. More specifically, the Company has taken additional action in 2021 to achieve an approximate
United States (U.S.)
U.S. production averaged 280,000 net barrels of oil equivalent per day (boed) for fourth quarter 2020. Oil production averaged 159,000 net barrels of oil per day (bopd). U.S. unit production costs were
During fourth quarter, the Company brought a total of 49 gross Company-operated wells to sales and delivered an average completed well cost per lateral foot reduction of more than
In the Eagle Ford, Marathon Oil's fourth quarter 2020 production averaged 82,000 net boed. Oil production averaged 51,000 net bopd on 20 gross Company-operated wells to sales. In the Bakken, production averaged 110,000 net boed, including oil production of 78,000 net bopd. The Company brought 23 gross Company-operated wells to sales during fourth quarter in the Bakken. Oklahoma production averaged 58,000 net boed in the fourth quarter 2020, including oil production of 15,000 net bopd. Northern Delaware production averaged 21,000 net boed in the fourth quarter 2020, while oil production averaged 12,000 net bopd on 6 gross Company-operated wells to sales.
International
Equatorial Guinea production averaged 72,000 net boed for fourth quarter 2020, including 13,000 net bopd of oil. Unit production costs averaged
Assuming
Corporate
Net cash provided by operations was
Total liquidity as of December 31 was approximately
During the fourth quarter, Marathon Oil reinstated a quarterly dividend at 3 cents per share and completed a cash tender for an aggregate principal amount of
Year-end 2020 proved reserves totaled 972 million barrels of oil equivalent (mmboe), with reductions attributable to 2020 production, decreased activity in the 5-year plan, and lower commodity prices, partially offset by cost reductions and performance improvements. Oil accounts for
The adjustments to net loss for fourth quarter 2020 totaled
Governance
Marathon Oil is fully committed to best-in-class corporate governance as its foundation for executing its long-term strategy. As announced in January, the Company has reduced executive compensation and modified its framework to enhance alignment with shareholders, incentivize achievement of its core strategic objectives, and encourage the behaviors the Company believes are most likely to maximize long-term shareholder value.
More specifically, the Company is reducing annual Board of Director compensation by
Marathon Oil's short-term incentive (STI) annual cash bonus scorecard has been restructured to better reflect the Company's financial and ESG framework, with all production and growth metrics removed. Additionally, the Company has revised its LTI compensation framework to mitigate overreliance on relative TSR against direct E&P peers, adding S&P 500 and S&P Energy indices as peer comparators, and has introduced free cash flow as an additional LTI performance metric.
Safety and Environmental
Marathon Oil views safety as a core value and a key component of its ESG performance. Keeping its workforce safe, both employees and contractors, is and always will be a top priority. During 2020, the Company successfully managed through the ongoing COVID-19 pandemic with record setting safety performance, as measured by a total recordable incident rate (TRIR) of 0.247. This was Marathon Oil's second consecutive year of record TRIR performance. Peer leading safety performance will remain a component of the Company's executive compensation scorecard.
Reducing greenhouse gas (GHG) emissions intensity is central to Marathon Oil's strategic goals of minimizing its environmental impact, addressing the risks of climate change, and delivering strong long-term financial performance.
During 2020 the Company made significant progress in improving its environmental performance, achieving an estimated
For 2021, the Company has established a quantitative GHG intensity target, representing a reduction of more than
Methodology and definitions for GHG emissions and safety performance are based on information from the Company's 2019 Sustainability Report that can be found on the Company's website. The Company reports direct (Scope 1) and indirect (Scope 2) GHG emissions, with emissions intensity measured by metric tonnes carbon dioxide equivalent (CO2e) emissions per thousand barrels of oil equivalent hydrocarbons produced from Marathon Oil-operated facilities.
A slide deck and Quarterly Investor Packet will be posted to the Company's website following this release today, February 22. On Tuesday, February 23, at 10:00 a.m. ET, the Company will conduct a question and answer webcast/call, which will include forward-looking information. The live webcast, replay and all related materials will be available at https://ir.marathonoil.com/.
Footnotes:
1 | |
2 | |
3 | Cumulative FCF of approximately |
4 | Exclusive of temporary reductions announced in 2020 |
5 | Preliminary estimate subject to final calculation |
6 | |
7 | Total recordable incident rate (TRIR) measures combined employee and contractor workforce incidents per 200,000 work hours |
Non-GAAP Measures
In analyzing and planning for its business, Marathon Oil supplements its use of GAAP financial measures with non-GAAP financial measures, including adjusted net income (loss), adjusted net income (loss) per share, free cash flow, net cash provided by operations before changes in working capital, total capital expenditures and capital reinvestment rate.
Our presentation of adjusted net income (loss) and adjusted net income (loss) per share is a non-GAAP measure. Adjusted net income (loss) is defined as net income (loss) adjusted for gains/losses on dispositions, impairments of proved and certain unproved properties, goodwill and equity method investments, certain exploration expenses relating to a strategic decision to exit conventional exploration, unrealized derivative gain/loss on commodity and interest rate derivative instruments, effects of pension settlements and curtailments and other items that could be considered "non-operating" or "non-core" in nature. Management believes this is useful to investors as another tool to meaningfully represent our operating performance and to compare Marathon to certain competitors. Adjusted net income (loss) and adjusted net income (loss) per share should not be considered in isolation or as an alternative to, or more meaningful than, net income (loss) or net income (loss) per share as determined in accordance with U.S. GAAP.
Our presentation of free cash flow is a non-GAAP measure. Free cash flow before dividend ("free cash flow") is defined as net cash provided by operating activities adjusted for working capital, exploration costs (other than well costs), capital expenditures, and EG LNG return of capital and other. Management believes this is useful to investors as a measure of Marathon's ability to fund its capital expenditure programs, service debt, and other distributions to stockholders. Free cash flow should not be considered in isolation or as an alternative to, or more meaningful than, net cash provided by operating activities as determined in accordance with U.S. GAAP.
Our presentation of net cash provided by operations before changes in operating working capital and net cash provided by operations before changes in operating working capital and exploration costs are non-GAAP measures. Management believes this is useful to investors as an indicator of Marathon's ability to generate cash quarterly or year-to-date by eliminating differences caused by the timing of certain working capital items. Net cash provided by operations before changes in working capital and net cash provided by operations before changes in working capital and exploration costs should not be considered in isolation or as an alternative to, or more meaningful than, net cash provided by operating activities as determined in accordance with U.S. GAAP.
Our presentation of total capital expenditures is a non-GAAP measure. Total capital expenditures is defined as cash additions to property, plant and equipment adjusted for the change in working capital associated with property, plant and equipment, exploration costs other than well costs, M&S inventory and other, and additions to other assets. Management believes this is useful to investors as an indicator of Marathon's commitment to capital expenditure discipline by eliminating differences caused by the timing of certain working capital and other items. Total capital expenditures should not be considered in isolation or as an alternative to, or more meaningful than, cash additions to property, plant and equipment as determined in accordance with U.S. GAAP.
Capital spending reinvestment rate is defined as total capital expenditures divided by operating cash flow before working capital. Management believes the capital spending reinvestment rate is useful to investors to demonstrate the Company's commitment to generating cash for use towards investor friendly purposes (which includes balance sheet enhancement, base dividend, and other return of capital).
These non-GAAP financial measures reflect an additional way of viewing aspects of the business that, when viewed with GAAP results may provide a more complete understanding of factors and trends affecting the business and are a useful tool to help management and investors make informed decisions about Marathon Oil's financial and operating performance. These measures should not be considered in isolation or as an alternative to their most directly comparable GAAP financial measures. A reconciliation to their most directly comparable GAAP financial measures can be found in our investor package on our website at https://ir.marathonoil.com/ and in the tables below. Marathon Oil strongly encourages investors to review the Company's consolidated financial statements and publicly filed reports in their entirety and not rely on any single financial measure.
Forward-looking Statements
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, including without limitation statements regarding the Company's future capital budgets and allocations, future performance, expected free cash flow, emission targets and estimated emission reductions, future debt reduction, reinvestment rates, corporate-level cash returns on invested capital, business strategy, asset quality, drilling plans, production guidance, cash margins, cost reductions, leasing and exploration activities, production, oil growth and other plans and objectives for future operations, are forward-looking statements. Words such as "anticipate," "believe," "could," "estimate," "expect," "forecast," "future," "guidance," "intend," "may," "outlook," "plan," "positioned," "project," "seek," "should," "target," "will," "would," or similar words may be used to identify forward-looking statements; however, the absence of these words does not mean that the statements are not forward-looking. While the Company believes its assumptions concerning future events are reasonable, a number of factors could cause actual results to differ materially from those projected, including, but not limited to: conditions in the oil and gas industry, including supply/demand levels for crude oil and condensate, NGLs and natural gas and the resulting impact on price; changes in expected reserve or production levels; changes in political or economic conditions in the U.S. and Equatorial Guinea, including changes in foreign currency exchange rates, interest rates, inflation rates; actions taken by the members of the Organization of the Petroleum Exporting Countries (OPEC) and Russia affecting the production and pricing of crude oil; and other global and domestic political, economic or diplomatic developments; capital available for exploration and development; risks related to the Company's hedging activities; voluntary or involuntary curtailments, delays or cancellations of certain drilling activities; well production timing; liability resulting from litigation; drilling and operating risks; lack of, or disruption in, access to storage capacity, pipelines or other transportation methods; availability of drilling rigs, materials and labor, including the costs associated therewith; difficulty in obtaining necessary approvals and permits; non-performance by third parties of contractual obligations; unforeseen hazards such as weather conditions, a health pandemic (including COVID-19), acts of war or terrorist acts and the government or military response thereto; cyber-attacks; changes in safety, health, environmental, tax and other regulations, requirements or initiatives, including initiatives addressing the impact of global climate change, air emissions, or water management; other geological, operating and economic considerations; and the risk factors, forward-looking statements and challenges and uncertainties described in the Company's 2019 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other public filings and press releases, available at https://ir.marathonoil.com/. Except as required by law, the Company undertakes no obligation to revise or update any forward-looking statements as a result of new information, future events or otherwise.
Media Relations Contact:
Stephanie Gentry: 713-296-3307
Investor Relations Contacts:
Guy Baber: 713-296-1892
John Reid: 713-296-4380
Consolidated Statements of Income (Unaudited) | Three Months Ended | Year Ended | |||||||||||||
Dec. 31 | Sept. 30 | Dec. 31 | Dec. 31 | Dec. 31 | |||||||||||
(In millions, except per share data) | 2020 | 2020 | 2019 | 2020 | 2019 | ||||||||||
Revenues and other income: | |||||||||||||||
Revenues from contracts with customers | $ | 822 | $ | 761 | $ | 1,233 | $ | 3,097 | $ | 5,063 | |||||
Net gain (loss) on commodity derivatives | (15) | (1) | (44) | 116 | (72) | ||||||||||
Income (loss) from equity method investments | 13 | (10) | 24 | (161) | 87 | ||||||||||
Net gain (loss) on disposal of assets | 1 | 1 | (6) | 9 | 50 | ||||||||||
Other income | 9 | 3 | 8 | 25 | 62 | ||||||||||
Total revenues and other income | 830 | 754 | 1,215 | 3,086 | 5,190 | ||||||||||
Costs and expenses: | |||||||||||||||
Production | 137 | 129 | 169 | 555 | 712 | ||||||||||
Shipping, handling and other operating | 164 | 183 | 143 | 596 | 605 | ||||||||||
Exploration | 100 | 27 | 42 | 181 | 149 | ||||||||||
Depreciation, depletion and amortization | 521 | 554 | 616 | 2,316 | 2,397 | ||||||||||
Impairments | 46 | 1 | — | 144 | 24 | ||||||||||
Taxes other than income | 55 | 49 | 79 | 200 | 311 | ||||||||||
General and administrative | 57 | 53 | 93 | 274 | 356 | ||||||||||
Total costs and expenses | 1,080 | 996 | 1,142 | 4,266 | 4,554 | ||||||||||
Income (loss) from operations | (250) | (242) | 73 | (1,180) | 636 | ||||||||||
Net interest and other | (61) | (62) | (67) | (256) | (244) | ||||||||||
Other net periodic benefit (costs) credits | (2) | (6) | (6) | (1) | 3 | ||||||||||
Loss on early extinguishment of debt | (28) | — | (3) | (28) | (3) | ||||||||||
Income (loss) before income taxes | (341) | (310) | (3) | (1,465) | 392 | ||||||||||
Provision (benefit) for income taxes | (3) | 7 | 17 | (14) | (88) | ||||||||||
Net income (loss) | $ | (338) | $ | (317) | $ | (20) | $ | (1,451) | $ | 480 | |||||
Adjusted Net Income (Loss) | |||||||||||||||
Net income (loss) | $ | (338) | $ | (317) | $ | (20) | $ | (1,451) | $ | 480 | |||||
Adjustments for special items (pre-tax): | |||||||||||||||
Net (gain) loss on disposal of assets | (1) | (1) | 6 | (9) | (50) | ||||||||||
Proved property impairments | 46 | 1 | — | 49 | 24 | ||||||||||
Exploratory dry well costs, unproved property | 78 | 6 | — | 84 | — | ||||||||||
Goodwill impairment | — | — | — | 95 | — | ||||||||||
Pension settlement | 5 | 9 | 10 | 30 | 12 | ||||||||||
Pension curtailment | — | — | — | (17) | — | ||||||||||
Unrealized loss on derivative instruments | 66 | 36 | 55 | 27 | 124 | ||||||||||
Reduction in workforce | 2 | 2 | — | 17 | — | ||||||||||
Impairment of equity method investment | 1 | 18 | — | 171 | — | ||||||||||
Loss on early extinguishment of debt | 28 | — | — | 28 | — | ||||||||||
Other | 15 | 28 | 4 | 58 | 28 | ||||||||||
Benefit for income taxes related to special items | — | (1) | — | (1) | (7) | ||||||||||
Adjustments for special items | 240 | 98 | 75 | 532 | 131 | ||||||||||
Adjusted net income (loss) (a) | $ | (98) | $ | (219) | $ | 55 | $ | (919) | $ | 611 | |||||
Per diluted share: | |||||||||||||||
Net income (loss) | $ | (0.43) | $ | (0.40) | $ | (0.03) | $ | (1.83) | $ | 0.59 | |||||
Adjusted net income (loss) (a) | $ | (0.12) | $ | (0.28) | $ | 0.07 | $ | (1.16) | $ | 0.75 | |||||
Weighted average diluted shares | 790 | 790 | 800 | 792 | 810 | ||||||||||
(a) | Non-GAAP financial measure. See "Non-GAAP Measures" above for further discussion. |
Supplemental Statistics (Unaudited) | Three Months Ended | Year Ended | |||||||||||||
Dec. 31 | Sept. 30 | Dec. 31 | Dec. 31 | Dec. 31 | |||||||||||
(In millions) | 2020 | 2020 | 2019 | 2020 | 2019 | ||||||||||
Segment income (loss) | |||||||||||||||
United States | $ | (33) | $ | (135) | $ | 148 | $ | (553) | $ | 675 | |||||
International | 29 | 8 | 33 | 30 | 233 | ||||||||||
Not allocated to segments | (334) | (190) | (201) | (928) | (428) | ||||||||||
Net income (loss) | $ | (338) | $ | (317) | $ | (20) | $ | (1,451) | $ | 480 | |||||
Cash flows | |||||||||||||||
Net cash provided by operating activities | $ | 418 | $ | 345 | $ | 700 | $ | 1,473 | $ | 2,749 | |||||
Changes in working capital | 10 | 7 | (15) | (57) | 136 | ||||||||||
Net cash provided by operating activities before | $ | 428 | $ | 352 | $ | 685 | $ | 1,416 | $ | 2,885 | |||||
Free Cash Flow | |||||||||||||||
Net cash provided by operating activities before changes in | $ | 428 | $ | 352 | $ | 685 | $ | 1,416 | $ | 2,885 | |||||
Adjustments for free cash flow: | |||||||||||||||
Exploration costs other than well costs | 4 | 4 | 13 | 22 | 35 | ||||||||||
Capital expenditures | (270) | (176) | (724) | (1,162) | (2,684) | ||||||||||
EG LNG return of capital and other | — | — | 9 | 1 | 58 | ||||||||||
Free cash flow (a) | $ | 162 | $ | 180 | $ | (17) | $ | 277 | $ | 294 | |||||
Capital Expenditures | |||||||||||||||
Cash additions to property, plant and equipment | $ | (253) | $ | (144) | $ | (616) | $ | (1,343) | $ | (2,550) | |||||
Change in working capital associated with PP&E | (14) | (33) | 15 | 192 | (41) | ||||||||||
Exploration costs other than well costs | (4) | (4) | (13) | (22) | (35) | ||||||||||
M&S inventory and other | 1 | 2 | 1 | (4) | 12 | ||||||||||
Additions to other assets and acquisitions | — | 3 | (111) | 15 | (70) | ||||||||||
Total capital expenditures (a) | $ | (270) | $ | (176) | $ | (724) | $ | (1,162) | $ | (2,684) | |||||
(a) | Non-GAAP financial measure. See "Non-GAAP Measures" above for further discussion. |
Supplemental Statistics (Unaudited) | Three Months Ended | Year Ended | ||||||||
Dec. 31 | Sept. 30 | Dec. 31 | Dec. 31 | Dec. 31 | ||||||
Net Production | 2020 | 2020 | 2019 | 2020 | 2019 | |||||
Equivalent Production (mboed) | ||||||||||
United States | 280 | 297 | 328 | 306 | 324 | |||||
International | 72 | 73 | 85 | 77 | 92 | |||||
Total net production | 352 | 370 | 413 | 383 | 416 | |||||
Less: Divestitures (a) | — | — | — | — | 8 | |||||
Total divestiture-adjusted net production | 352 | 370 | 413 | 383 | 408 | |||||
Oil Production (mbbld) | ||||||||||
United States | 159 | 159 | 196 | 177 | 191 | |||||
International | 13 | 13 | 15 | 13 | 21 | |||||
Total net production | 172 | 172 | 211 | 190 | 212 | |||||
Less: Divestitures (b) | — | — | — | — | 6 | |||||
Total divestiture-adjusted net production | 172 | 172 | 211 | 190 | 206 | |||||
(a) | Divestitures for the year ended 2019 include the following: (i) 1 mboed related to the sale of certain United States non-core conventional assets which closed in first quarter 2019 (ii) 6 mboed related to the sale of our U.K. business which closed in third quarter 2019 and (iii) 1 mboed related to the sale of our non-operated interest in the Atrush block in Kurdistan which closed in second quarter 2019. |
(b) | Divestitures for the year ended 2019 include 5 mbbld related to the sale of our U.K. business which closed in third quarter 2019 and 1 mbbld related to the sale of our non-operated interest in the Atrush block in Kurdistan which closed in second quarter 2019. |
Supplemental Statistics (Unaudited) | Three Months Ended | Year Ended | ||||||||
Dec. 31 | Sept. 30 | Dec. 31 | Dec. 31 | Dec. 31 | ||||||
2020 | 2020 | 2019 | 2020 | 2019 | ||||||
United States - net sales volumes | ||||||||||
Crude oil and condensate (mbbld) | 159 | 159 | 196 | 177 | 190 | |||||
Eagle Ford | 51 | 53 | 67 | 61 | 63 | |||||
Bakken | 78 | 69 | 86 | 79 | 86 | |||||
Oklahoma | 15 | 18 | 24 | 17 | 21 | |||||
Northern Delaware | 11 | 15 | 16 | 15 | 16 | |||||
Other United States (a) | 4 | 4 | 3 | 5 | 4 | |||||
Natural gas liquids (mbbld) | 54 | 68 | 58 | 59 | 60 | |||||
Eagle Ford | 14 | 20 | 18 | 18 | 22 | |||||
Bakken | 18 | 16 | 12 | 14 | 9 | |||||
Oklahoma | 17 | 25 | 22 | 20 | 22 | |||||
Northern Delaware | 4 | 5 | 5 | 5 | 6 | |||||
Other United States (a) | 1 | 2 | 1 | 2 | 1 | |||||
Natural gas (mmcfd) | 402 | 421 | 444 | 423 | 438 | |||||
Eagle Ford | 103 | 111 | 121 | 121 | 130 | |||||
Bakken | 86 | 76 | 59 | 70 | 46 | |||||
Oklahoma | 164 | 179 | 216 | 177 | 210 | |||||
Northern Delaware | 34 | 40 | 41 | 41 | 36 | |||||
Other United States (a) | 15 | 15 | 7 | 14 | 16 | |||||
Total United States (mboed) | 280 | 297 | 328 | 306 | 323 | |||||
International - net sales volumes | ||||||||||
Crude oil and condensate (mbbld) | 14 | 11 | 13 | 13 | 20 | |||||
Equatorial Guinea | 14 | 11 | 13 | 13 | 15 | |||||
United Kingdom (b) | — | — | — | — | 4 | |||||
Other International (c) | — | — | — | — | 1 | |||||
Natural gas liquids (mbbld) | 8 | 8 | 9 | 9 | 9 | |||||
Equatorial Guinea | 8 | 8 | 9 | 9 | 9 | |||||
Natural gas (mmcfd) | 306 | 310 | 363 | 330 | 371 | |||||
Equatorial Guinea | 306 | 310 | 363 | 330 | 365 | |||||
United Kingdom (b)(d) | — | — | — | — | 6 | |||||
Total International (mboed) | 73 | 71 | 83 | 77 | 91 | |||||
Total Company - net sales volumes (mboed) | 353 | 368 | 411 | 383 | 414 | |||||
Net sales volumes of equity method investees | ||||||||||
LNG (mtd) | 3,510 | 3,960 | 5,180 | 4,289 | 4,933 | |||||
Methanol (mtd) | 1,080 | 1,065 | 1,153 | 1,017 | 1,082 | |||||
Condensate and LPG (boed) | 10,288 | 9,340 | 11,832 | 10,288 | 11,104 | |||||
(a) | Includes sales volumes from the sale of certain non-core proved properties in our United States segment. |
(b) | The Company closed on the sale of its U.K. business on July 1, 2019. |
(c) | Other International includes volumes for the Atrush block in Kurdistan, which was sold in the second quarter of 2019. |
(d) | Includes natural gas acquired for injection and subsequent resale. |
Supplemental Statistics (Unaudited) | Three Months Ended | Year Ended | |||||||||||||
Dec. 31 | Sept. 30 | Dec. 31 | Dec. 31 | Dec. 31 | |||||||||||
2020 | 2020 | 2019 | 2020 | 2019 | |||||||||||
United States - average price realizations (a) | |||||||||||||||
Crude oil and condensate ($ per bbl) (b) | $ | 39.71 | $ | 37.78 | $ | 54.83 | $ | 35.93 | $ | 55.80 | |||||
Eagle Ford | 40.69 | 38.79 | 57.63 | 37.42 | 59.06 | ||||||||||
Bakken | 38.66 | 36.28 | 51.98 | 34.09 | 53.65 | ||||||||||
Oklahoma | 40.43 | 38.49 | 55.49 | 37.04 | 55.78 | ||||||||||
Northern Delaware | 41.49 | 40.18 | 57.08 | 37.50 | 54.04 | ||||||||||
Other United States (c) | 40.08 | 38.51 | 56.26 | 38.37 | 57.47 | ||||||||||
Natural gas liquids ($ per bbl) | $ | 16.30 | $ | 11.80 | $ | 15.47 | $ | 11.28 | $ | 14.22 | |||||
Eagle Ford | 16.34 | 12.07 | 15.72 | 11.32 | 14.27 | ||||||||||
Bakken | 15.66 | 10.26 | 13.12 | 9.91 | 13.48 | ||||||||||
Oklahoma | 17.46 | 12.15 | 17.30 | 12.42 | 14.66 | ||||||||||
Northern Delaware | 14.77 | 13.65 | 12.35 | 10.36 | 13.15 | ||||||||||
Other United States (c) | 15.10 | 12.17 | 13.98 | 12.27 | 16.43 | ||||||||||
Natural gas ($ per mcf) | $ | 2.31 | $ | 1.78 | $ | 2.10 | $ | 1.77 | $ | 2.18 | |||||
Eagle Ford | 2.55 | 1.79 | 2.40 | 1.94 | 2.54 | ||||||||||
Bakken | 1.49 | 1.26 | 2.31 | 1.32 | 2.34 | ||||||||||
Oklahoma | 2.72 | 2.03 | 1.95 | 1.97 | 2.04 | ||||||||||
Northern Delaware | 1.75 | 1.53 | 1.72 | 1.20 | 1.17 | ||||||||||
Other United States (c) | 2.02 | 1.90 | 1.89 | 1.84 | 2.81 | ||||||||||
International - average price realizations | |||||||||||||||
Crude oil and condensate ($ per bbl) | $ | 35.08 | $ | 30.28 | $ | 48.26 | $ | 28.36 | $ | 53.09 | |||||
Equatorial Guinea | 35.08 | 30.28 | 48.26 | 28.36 | 48.99 | ||||||||||
United Kingdom (d) | — | — | — | — | 67.99 | ||||||||||
Other International (e) | — | — | — | — | 51.24 | ||||||||||
Natural gas liquids ($ per bbl) | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.40 | |||||
Equatorial Guinea (f) | 1.00 | 1.00 | 1.00 | 1.00 | 1.00 | ||||||||||
United Kingdom (d) | — | — | — | — | 37.88 | ||||||||||
Natural gas ($ per mcf) | $ | 0.24 | $ | 0.24 | $ | 0.24 | $ | 0.24 | $ | 0.33 | |||||
Equatorial Guinea (f) | 0.24 | 0.24 | 0.24 | 0.24 | 0.24 | ||||||||||
United Kingdom (d) | — | — | — | — | 5.67 | ||||||||||
Benchmark | |||||||||||||||
WTI crude oil (per bbl) | $ | 42.70 | $ | 40.92 | $ | 56.87 | $ | 39.34 | $ | 57.04 | |||||
Brent (Europe) crude oil (per bbl) (g) | $ | 44.29 | $ | 42.96 | $ | 63.41 | $ | 41.76 | $ | 64.36 | |||||
Mont Belvieu NGLs (per bbl) (h) | $ | 17.42 | $ | 15.87 | $ | 17.15 | $ | 14.69 | $ | 17.81 | |||||
Henry Hub natural gas (per mmbtu) (i) | $ | 2.66 | $ | 1.98 | $ | 2.50 | $ | 2.08 | $ | 2.63 | |||||
(a) | Excludes gains or losses on commodity derivative instruments. |
(b) | Inclusion of realized gains (losses) on crude oil derivative instruments would have increased average price realizations by |
(c) | Includes sales volumes from the sale of certain non-core proved properties in our United States segment. |
(d) | The Company closed on the sale of its U.K. business on July 1, 2019. |
(e) | Other International includes volumes for the Atrush block in Kurdistan, which was sold in the second quarter of 2019. |
(f) | Represents fixed prices under long-term contracts with Alba Plant LLC, Atlantic Methanol Production Company LLC and/or Equatorial Guinea LNG Holdings Limited, which are equity method investees. The Alba Plant LLC processes the NGLs and then sells secondary condensate, propane, and butane at market prices. Marathon Oil includes its share of income from each of these equity method investees in the International segment. |
(g) | Average of monthly prices obtained from Energy Information Administration website. |
(h) | Bloomberg Finance LLP: Y-grade Mix NGL of |
(i) | Settlement date average per mmbtu. |
Full Year 2021 | Oil Production (mbbld) | Equivalent Production (mboed) | |||||||
Full Year | Q4 | Full Year | Full Year | Q4 | Full Year | ||||
Low | High | Divestiture-Adjusted | Low | High | Divestiture-Adjusted | ||||
Net production | |||||||||
United States | 158 | 162 | 159 | 177 | 270 | 280 | 280 | 306 | |
International | 11 | 13 | 13 | 13 | 60 | 70 | 72 | 77 | |
Total net production | 169 | 175 | 172 | 190 | 330 | 350 | 352 | 383 | |
The following table sets forth outstanding derivative contracts as of February 15, 2021, and the weighted average prices for those contracts:
2021 | |||||||||||||||||
First Quarter | Second | Third Quarter | Fourth Quarter | ||||||||||||||
Crude Oil | |||||||||||||||||
NYMEX WTI Three-Way Collars | |||||||||||||||||
Volume (Bbls/day) | — | 40,000 | 10,000 | — | |||||||||||||
Weighted average price per Bbl: | |||||||||||||||||
Ceiling | $ | — | $ | 61.46 | $ | 65.18 | $ | — | |||||||||
Floor | $ | — | $ | 39.75 | $ | 45.00 | $ | — | |||||||||
Sold put | $ | — | $ | 29.75 | $ | 35.00 | $ | — | |||||||||
NYMEX WTI Two-Way Collars | |||||||||||||||||
Volume (Bbls/day) | 90,000 | 50,000 | 30,000 | 30,000 | |||||||||||||
Weighted average price per Bbl: | |||||||||||||||||
Ceiling | $ | 51.86 | $ | 52.98 | $ | 51.54 | $ | 51.54 | |||||||||
Floor | $ | 35.44 | $ | 35.80 | $ | 35.67 | $ | 35.67 | |||||||||
Fixed Price WTI Swaps | |||||||||||||||||
Volume (Bbls/day) | 20,000 | — | — | — | |||||||||||||
Weighted average price per Bbl | $ | 50.35 | $ | — | $ | — | $ | — | |||||||||
Basis Swaps - NYMEX WTI / ICE Brent (a) | |||||||||||||||||
Volume (Bbls/day) | 3,278 | — | — | — | |||||||||||||
Weighted average price per Bbl | $ | (7.24) | $ | — | $ | — | $ | — | |||||||||
Basis Swaps - NYMEX WTI / UHC (b) | |||||||||||||||||
Volume (Bbls/day) | 14,344 | 15,000 | — | — | |||||||||||||
Weighted average price per Bbl | $ | (1.80) | $ | (1.80) | $ | — | $ | — | |||||||||
NYMEX Roll Basis Swaps | |||||||||||||||||
Volume (Bbls/day) | 50,000 | 50,000 | — | — | |||||||||||||
Weighted average price per Bbl | $ | (0.13) | $ | (0.13) | $ | — | $ | — | |||||||||
Natural Gas | |||||||||||||||||
Henry Hub ("HH") Two-Way Collars | |||||||||||||||||
Volume (MMBtu/day) | 250,000 | 200,000 | 200,000 | 200,000 | |||||||||||||
Weighted average price per MMBtu: | |||||||||||||||||
Ceiling | $ | 3.14 | $ | 3.05 | $ | 3.05 | $ | 3.05 | |||||||||
Floor | $ | 2.52 | $ | 2.50 | $ | 2.50 | $ | 2.50 | |||||||||
HH Fixed Price Swaps | |||||||||||||||||
Volume (MMBtu/day) | 50,000 | 50,000 | 50,000 | 50,000 | |||||||||||||
Weighted average price per MMBtu | $ | 2.88 | $ | 2.88 | $ | 2.88 | $ | 2.88 | |||||||||
NGL | |||||||||||||||||
Fixed Price Propane Swaps (c) | |||||||||||||||||
Volume (Bbls/day) | 5,000 | 5,000 | 5,000 | 5,000 | |||||||||||||
Weighted average price per Bbl | $ | 23.19 | $ | 23.19 | $ | 23.19 | $ | 23.19 | |||||||||
(a) | The basis differential price is indexed against Intercontinental Exchange ("ICE") Brent and NYMEX WTI. |
(b) | The basis differential price is indexed against U.S. Sweet Clearbrook ("UHC") and NYMEX WTI. |
(c) | The fixed price propane swap is priced at Mont Belvieu Spot Gas Liquids Prices: Non-TET Propane. |
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SOURCE Marathon Oil Corporation
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