Document




UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
 
 
Date of Report (Date of Earliest Event Reported):
 
November 28, 2017


Marathon Oil Corporation
__________________________________________
(Exact name of registrant as specified in its charter)
 
 
 
Delaware
1-5153
25-0996816
_____________________
 (State or other jurisdiction
_____________
 (Commission
______________
 (I.R.S. Employer
of incorporation)
File Number)
Identification No.)
  
 
 
5555 San Felipe Street, Houston, Texas
 
77056
_________________________________
 (Address of principal executive offices)
 
___________
 (Zip Code)
 
 
 
Registrant's telephone number, including area code:
 
(713) 629-6600

Not Applicable
______________________________________________
Former name or former address, if changed since last report

 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company [ ]
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
 
 
  









Item 1.01. Entry into a Material Definitive Agreement.
On November 28, 2017, Marathon Oil Corporation (the “Company”) entered into an agreement by and among the Company, the Parish of St. John the Baptist, State of Louisiana (the “Parish”) and Morgan Stanley & Co. LLC (the “Underwriter”) to purchase $1 billion of Revenue Refunding Bonds (Marathon Oil Corporation Project) Series 2017 having a term rate of 3.75 percent that will mature on June 1, 2037, to be issued by the Parish. The Parish will use the proceeds to redeem $1 billion of 5.125 percent Fixed Rate Revenue Bonds (Marathon Oil Corporation Project) Series 2007A, for which the Company is the obligor. The agreement contains customary representations, warranties and agreements of the Company and other customary obligations of the parties and termination provisions. The agreement also provides for the indemnification by the Company of the Underwriter and the Parish against certain liabilities, including liabilities under the Securities Act of 1933, as amended. The transaction is expected to close on December 18, 2017, subject to customary closing conditions.

The underwriter and its affiliates have, from time to time, performed various investment or commercial banking, financial advisory and lending services, including serving as counterparties to certain derivative and hedging arrangements, for the Company in the ordinary course of business for which they have received customary fees and expenses. An affiliate of the Underwriter is a lender under the Company's credit facility.
Item 9.01. Financial Statements and Exhibits
99.1
Press Release issued by Marathon Oil Corporation, dated November 28, 2017.






SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
 
 
Marathon Oil Corporation
  
 
 
 
 
November 28, 2017
 
By:
 
 /s/ Gary E. Wilson
 
 
 
 



 
 
 
 
Name: Gary E. Wilson
 
 
 
 
Title: Vice President, Controller and Chief Accounting Officer





Exhibit Index

99.1






Exhibit
Exhibit 99.1



Marathon Oil Announces $1 Billion Gross Debt Reduction

HOUSTON, Nov. 28, 2017 -- Marathon Oil Corporation (NYSE: MRO) announced today that it has entered into a transaction to redeem at par the outstanding $1 billion of 5.125 percent municipal revenue bonds due in 2037. This transaction will reduce gross debt by $1 billion and annual cash interest expense by $51 million while preserving the ability to remarket up to $1 billion of the tax-exempt municipal bonds to third parties between closing and the maturity date of 2037.

When combined with the Company’s previous refinancing transaction in third quarter 2017, Marathon Oil’s gross debt has been reduced by approximately $1.75 billion, and annual cash interest expense has been reduced by approximately $115 million.

“We continue to strengthen our balance sheet, and this transaction takes advantage of a unique element of our capital structure to reduce gross debt while preserving future optionality in the tax-exempt bond market,” said Dane Whitehead, Marathon Oil executive vice president and CFO. “Importantly, it also lowers our annualized corporate costs by another $50 million.”

Marathon Oil has agreed to purchase, with cash on hand, $1 billion of Revenue Refunding Bonds (Marathon Oil Corporation Project) Series 2017 having a term rate of 3.75 percent that will mature on June 1, 2037, to be issued by the Parish of St. John the Baptist, State of Louisiana. The Parish will use the proceeds to redeem $1 billion of 5.125 percent Fixed Rate Revenue Bonds (Marathon Oil Corporation Project) Series 2007A, for which the Company is currently the obligor. The purchase of the refunding bonds by the Company and the redemption of the original bonds will result in a reduction of total gross debt of $1 billion and generate annual cash interest savings of $51 million.

Marathon Oil will be obligated to service the principal and interest payments associated with the refunding bonds but will also own the refunding bonds resulting in no net debt service cost to the Company. The Company has the right to tender the refunding bonds at par and remarket them to investors at any time up to the 2037 maturity date and in any amount up to the full $1 billion, subject to market conditions.

The Company’s total liquidity as of Sept. 30 was $5.2 billion, which consisted of $1.8 billion in cash and cash equivalents and an undrawn revolving credit facility of $3.4 billion. Approximately $750 million in remaining proceeds from the sale of the Company's Canadian subsidiary is scheduled to be received in first quarter 2018.

The refunding transaction is expected to close on Dec. 18, 2017, subject to customary closing conditions. It is being underwritten by Morgan Stanley & Co. LLC. Terms of the refunding bonds and the sale thereof will be as described in the official statement relating to the refunding bonds which will be available no later than Dec. 7, 2017 on the website of the Municipal Securities Rulemaking Board via its Electronic Municipal Market Access system at www.msrb.org.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale of these securities would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

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 statements regarding the completion of the proposed offering and use of proceeds thereof, as well as our ability to remarket the funds and receipt of the remaining sale proceeds,




are forward-looking statements. While the Company believes that its assumptions concerning future events are reasonable, a number of factors could cause results to differ materially including the failure to satisfy closing conditions, our ability to remarket the bonds as well as risk factors, forward-looking statements and challenges and uncertainties described in the Company's 2016 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other public filings and press releases, available at www.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
Lee Warren: 713-296-4103

Investor Relations Contact
Zach Dailey: 713-296-4140