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Marathon Oil Reports Fourth Quarter and Full-Year 2015 Results

HOUSTON, Feb. 17, 2016 (GLOBE NEWSWIRE) --

Marathon Oil Corporation (NYSE:MRO) today reported a full-year 2015 adjusted net loss of $869 million, or $1.28 per diluted share, excluding the impact of certain items not typically represented in analysts' earnings estimates and that would otherwise affect comparability of results. The reported net loss was $2,204 million, or $3.26 per diluted share.

 

Full-Year 2015

  • Full-year 2015 capital program at $3 billion, $500 million below original budget
  • Achieved 8% production growth from total Company continuing operations (excluding Libya) and 21% from U.S. resource plays year over year
  • Decreased E&P production and total Company adjusted G&A expenses by more than $435 million, or 24%, year over year
  • Completed 20% reduction in workforce to generate $160 million in annualized net savings
  • Reduced quarterly dividend increasing annual free cash flow by more than $425 million
  • Closed or announced non-core asset sales for approximately $315 million, excluding closing adjustments
  • Organic reserve replacement of 157%, excluding revisions and dispositions, at $12 per boe drillbit finding and development cost
  • Year-end liquidity of $4.2 billion comprised of $1.2 billion in cash and an undrawn $3 billion revolving credit facility

 

"We navigated a very challenging macro environment in 2015 by staying focused on the elements of the business within our control -- disciplined capital allocation, reducing costs, capturing efficiencies and portfolio management. Our actions early in the cycle on production expenses and G&A reset our cost structure and positioned us to realize full year benefits in 2016," said Marathon Oil President and CEO Lee Tillman. "Even with reduced activity levels and a $3 billion capital program that was 50 percent less than the prior year, we surpassed our total Company and resource play production targets.

 

"In the fourth quarter, our capital spend and production costs both came in better than expectations. Operational results were supported by a more than 20 percent increase in Oklahoma unconventional volumes while maintaining flat production levels in the Eagle Ford. More recently, we reached a major milestone in Equatorial Guinea with the successful installation of the jacket and topsides for the Alba field compression project, on schedule to start up by mid-year 2016," Tillman said.

 

The Company reported a fourth quarter 2015 adjusted net loss of $323 million, or $0.48 per diluted share, and a net loss of $793 million, or $1.17 per diluted share.

 

Fourth Quarter 2015

  • Fourth quarter capital program decreased to $564 million
  • Total Company net production averaged 432,000 net boed, essentially flat with third quarter 2015
  • U.S. resource play production averaged 214,000 net boed, up slightly over third quarter 2015, while maintaining flat sequential Eagle Ford production
  • North America E&P production costs per boe reduced 28% below year-ago quarter
  • Total Company adjusted G&A down 40% compared to year-ago quarter
  • First Company-operated Springer oil well in Oklahoma SCOOP performing above expectations with 30-day IP rate greater than 1,000 boed (89% liquids)
  • Closed sale of Gulf of Mexico properties

 

North America E&P
North America Exploration and Production (E&P) production available for sale averaged 260,000 net barrels of oil equivalent per day (boed) for fourth quarter 2015. On a divestiture-adjusted basis, it was up 2 percent over the year-ago quarter and essentially flat compared to third quarter 2015. Fourth quarter North America production costs were $6.91 per boe, down 28 percent from the year-ago period. Full-year unit production costs of $7.38 per boe were below guidance of $7.50 to $8.50 per boe.

 

EAGLE FORD: In fourth quarter 2015, Marathon Oil's production in the Eagle Ford averaged 128,000 net boed, compared to 131,000 net boed in the year-ago quarter and flat to the prior quarter. The production decrease compared to the year-ago quarter was principally due to decreased drilling and completion activity resulting in fewer wells brought to sales. During fourth quarter 2015 the Company brought 76 gross (44 net) wells to sales, of which 25 were Austin Chalk, eight upper Eagle Ford and 43 lower Eagle Ford, compared to 57 gross (45 net) wells to sales in the previous quarter. Efficiency gains in drilling continued, with wells drilled at an average rate of 2,175 feet per day, resulting in spud-to-total depth of 9 days compared to 2,000 feet per day and 10 days spud-to-total depth in the previous quarter. The top-performing Eagle Ford rigs drilled two wells in excess of 3,100 feet per day.

 

OKLAHOMA RESOURCE BASINS: The Company's unconventional Oklahoma production averaged 28,000 net boed during fourth quarter 2015, an increase of 40 percent over the year-ago quarter and up 22 percent over the prior quarter. The Company benefited from a full quarter of production from the Smith infill pilot in the SCOOP, which is performing in line with expectations. Marathon Oil brought online four gross Company-operated wells, of which two were in the SCOOP Woodford, one in the SCOOP Springer and one in the STACK Meramec. The Company's first operated Springer oil well is performing above expectations with a 30-day IP rate of greater than 1,000 boed (89 percent liquids). The Company-operated Tyemax extended-lateral (XL) well in the SCOOP Woodford achieved a 30-day IP rate of 2,850 boed (34 percent liquids).

 

BAKKEN: Marathon Oil averaged 58,000 net boed of production in the Bakken during fourth quarter 2015, a 5 percent increase above the year-ago quarter and compared to 61,000 net boed in the prior quarter. Five gross wells in East Myrmidon were brought to sales, the same as the previous quarter. Additionally, the next phase of a large-scale water gathering system, expected to handle the majority of Marathon Oil's produced water and reduce production costs, is more than 50 percent complete and on-schedule to start-up in the second half of 2016. The first phase began operating in fourth quarter 2015.

 

International E&P
International E&P production available for sale from continuing operations (excluding Libya) averaged 123,000 net boed for fourth quarter 2015 compared to 126,000 net boed in the year-ago quarter and 114,000 net boed in the previous quarter. The sequential increase was primarily a result of higher fourth quarter production in Equatorial Guinea and lower third quarter volumes in the U.K. due to planned maintenance activities. Full-year unit production costs of $5.33 per boe (excluding Libya) were below guidance of $6.00 to $7.00 per boe.

 

EQUATORIAL GUINEA: Production available for sale averaged 104,000 net boed in fourth quarter 2015 compared to 106,000 net boed in the year-ago quarter and 99,000 net boed in the previous quarter. The Company benefited from a full quarter of impact from the Alba C21 development well and successful well intervention program. The jacket and topsides for the Alba field compression project were installed in January. Following completion of the planned onshore maintenance, the Alba field returned to full production rates in early February. Hook-up and commissioning activities on the Alba compression project are in progress and the new facilities are on schedule for a mid-2016 start-up.

 

U.K.: Production available for sale averaged 18,000 net boed in fourth quarter 2015, compared to 20,000 net boed in the year-ago quarter and 15,000 net boed in the previous quarter. Third quarter 2015 was impacted by planned maintenance activities. In late December, the Brae Alpha installation experienced a process pipe failure. Repairs are underway with resumption of full production expected in the second quarter.

 

Oil Sands Mining
Oil Sands Mining (OSM) production available for sale for fourth quarter 2015 averaged 49,000 net barrels per day (bbld) compared to 42,000 net bbld in the prior-year quarter and the record 57,000 net bbld in third quarter 2015. During the fourth quarter, planned maintenance at both mines was completed on time and on budget. Operating expense per synthetic barrel (before royalties) was $28.25, down 36 percent from the year-ago quarter largely as a result of higher reliability and associated production volumes, as well as a more favorable currency exchange rate.

 

Reserves
During 2015, Marathon Oil added proved reserves of 247 million barrels of oil equivalent (boe) through drilling activity, downspacing and improved well performance, virtually all in North America E&P. Excluding revisions and dispositions, the organic reserve replacement ratio for the year was 157 percent with a drillbit finding and development (F&D) cost of $12 per boe. Including revisions but excluding dispositions, the Company's reserve replacement ratio was 89 percent. Net proved reserves remain at approximately 2.2 billion boe at year-end 2015.

 

Corporate and Special Items
Net cash provided by continuing operations before changes in working capital was $278 million during fourth quarter 2015, and net cash provided by operating activities was $352 million. Additions to property, plant and equipment including accruals were $561 million in fourth quarter 2015, a 6 percent decrease from the previous quarter and down 66 percent from the year-ago quarter. For full-year 2015, net cash provided by continuing operations before changes in working capital was $1.68 billion, and net cash provided by operating activities was $1.57 billion. Total liquidity as of Dec. 31 was $4.2 billion, which consists of $1.2 billion in cash and cash equivalents and an undrawn $3 billion revolving credit facility.

 

Marathon Oil reduced E&P production expenses and total Company adjusted general and administrative expenses by $146 million for fourth quarter 2015 compared to the same quarter in 2014, and by $437 million for full-year 2015 compared to full-year 2014. These savings represent reductions of 31 percent and 24 percent, respectively. The Company had workforce reductions in 2015 which will result in annualized net savings of $160 million.

 

The Company closed on the sale of its Gulf of Mexico properties in the greater Ewing Bank area and non-operated Petronius field in December 2015, and on its non-operated Neptune field in February 2016 for combined transaction value of $205 million, before closing adjustments. The buyer assumed all future abandonment obligations for the acquired assets.

 

The adjustments to net loss for fourth quarter 2015 total $470 million ($498 million pre-tax) and primarily consist of: a goodwill impairment charge of $340 million ($340 million pre-tax) related to the North America E&P segment; an unproved property impairment of $218 million ($300 million pre-tax) relating to Canadian in-situ assets; and a gain on the sale of Gulf of Mexico assets of $146 million ($228 million pre-tax). For additional detail of adjustments related to special items, see attached tables.

 

The Company's webcast commentary and associated slides related to Marathon Oil's financial and operational review, as well as the Quarterly Investor Packet, will be posted to the Company's website at http://ir.marathonoil.com and to its mobile app as soon as practicable following this release today, Feb. 17. The Company will conduct a question and answer webcast/call on Thursday, Feb. 18, at 9 a.m. EST. The webcast slides, associated commentary and answers to questions will include forward-looking information. To listen to the live webcast, visit the Marathon Oil website at http://www.marathonoil.com. The audio replay of the webcast will be posted by Feb. 19.

 

# # #

 

 

Non-GAAP Measures
Management uses certain non-GAAP financial measures, including adjusted net income (loss), adjusted income (loss) from continuing operations, net cash provided by continuing operations before changes in working capital, and adjusted general and administrative expenses, to evaluate the Company's financial performance between periods and to compare the Company's performance to certain competitors. Management also uses net cash provided by continuing operations before changes in working capital to demonstrate the Company's ability to internally fund capital expenditures, pay dividends and service debt. These measures generally exclude the effects of items that are considered non-recurring, are difficult to predict or to measure in advance or that are not directly related to the Company's ongoing operations. They should not be considered substitutes for their most directly comparable GAAP financial measures. See the tables below for reconciliations between each non-GAAP financial measure and its most directly comparable GAAP financial measure, including: (i) adjusted net income (loss) reconciled to net income (loss), (ii) adjusted income (loss) from continuing operations reconciled to income (loss) from continuing operations, (iii) net cash provided by continuing operations before changes in working capital reconciled to net cash provided by operating activities, and (iv) adjusted general and administrative expenses reconciled to total company general and administrative expenses.

 

Forward-looking Statements
This release (and oral statements made regarding the subjects of 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. These are statements, other than statements of historical fact, that give current expectations or forecasts of future events, including, without limitation: the Company's operational, financial and growth strategies, including planned projects, drilling plans, workforce reductions and expected savings, production expense reductions, non-core asset sales, and drilling and completion improvements; the Company's ability to successfully effect those strategies and the expected timing and results thereof; reserve estimates; the Company's financial and operational outlook, and ability to fulfill that outlook; expectations regarding future economic and market conditions and their effects on the Company; and the Company's financial position, liquidity and capital resources.

 

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 and the resulting impact on price; changes in expected reserve or production levels; changes in political or economic conditions in key operating markets, including international markets; capital available for exploration and development; well production timing; availability of drilling rigs, materials and labor; difficulty in obtaining necessary approvals and permits; non-performance by third parties of contractual obligations; unforeseen hazards such as weather conditions, acts of war or terrorism and the governmental or military response thereto; cyber-attacks; changes in safety, health, environmental and other regulations; other geological, operating and economic considerations; and the risk factors, forward-looking statements and challenges and uncertainties described in the Company's 2014 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other public filings and press releases, available at www.marathonoil.com. 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 Contacts:
Lee Warren: 713-296-4103
Lisa Singhania: 713-296-4101

 

Investor Relations Contacts:
Chris Phillips: 713-296-3213
Zach Dailey: 713-296-4140

 

 

 

  Three Months Ended Year Ended
  Dec. 31 Sept. 30 Dec. 31 Dec. 31 Dec. 31
(In millions, except per diluted share data) 2015 2015 2014 2015 2014
Adjusted income (loss) from continuing operations (a) $ (323 ) $ (138 ) $ (89 ) $ (869 ) $ 1,160  
Adjustments for special items (net of taxes):          
Net gain (loss) on dispositions 146   (71 )   75   (58 )
Proved property impairments (20 ) (213 )   (261 ) (70 )
Unproved property impairments (220 ) (355 )   (575 )  
Goodwill impairment (340 )     (340 )  
Loss on equity method investments   (8 )   (8 )  
Pension settlement (13 ) (12 ) (4 ) (76 ) (63 )
Unrealized gain (loss) on crude oil derivative instruments (5 ) 50     32    
Reduction in workforce (6 ) (2 )   (35 )  
Alberta provincial corporate tax rate increase       (135 )  
Other (12 )     (12 )  
  Income (loss) from continuing operations $ (793 ) $ (749 ) $ (93 ) $ (2,204 ) $ 969  
Per diluted share:          
   Adjusted income (loss) from continuing operations (a) $ (0.48 ) $ (0.20 ) $ (0.13 ) $ (1.28 ) $ 1.70  
   Income (loss) from continuing operations $ (1.17 ) $ (1.11 ) $ (0.14 ) $ (3.26 ) $ 1.42  
Adjusted net income (loss) (a) $ (323 ) $ (138 ) $ (2 ) $ (869 ) $ 1,729  
Adjustments for special items (net of taxes):          
Net gain (loss) on dispositions 146   (71 ) 932   75   1,450  
Proved property impairments (20 ) (213 )   (261 ) (70 )
Unproved property impairments (220 ) (355 )   (575 )  
Goodwill impairment (340 )     (340 )  
Loss on equity method investments   (8 )   (8 )  
Pension settlement (13 ) (12 ) (4 ) (76 ) (63 )
Unrealized gain (loss) on crude oil derivative instruments (5 ) 50     32    
Reduction in workforce (6 ) (2 )   (35 )  
Alberta provincial corporate tax rate increase       (135 )  
Other (12 )     (12 )  
  Net income (loss) $ (793 ) $ (749 ) $ 926   $ (2,204 ) $ 3,046  
Per diluted share:          
   Adjusted net income (loss) (a) $ (0.48 ) $ (0.20 ) $   $ (1.28 ) $ 2.53  
   Net income (loss) $ (1.17 ) $ (1.11 ) $ 1.37   $ (3.26 ) $ 4.46  
Exploration expenses          
Unproved property impairments $ 352   $ 563   $ 166   $ 964   $ 306  
Dry well costs 154   (3 ) 237   250   317  
Geological and geophysical 8   8   58   31   85  
Other 18   17   18   73   85  
  Total exploration expenses $ 532   $ 585   $ 479   $ 1,318   $ 793  
Cash flows          
Net cash provided by continuing operations before changes in working capital (a) $ 278   $ 467   $ 768   $ 1,677   $ 4,661  
Changes in working capital for continuing operations 74   29   492   (112 ) 75  
Total net cash provided by continuing operations $ 352   $ 496   $ 1,260   $ 1,565   $ 4,736  
Net cash provided by discontinued operations (b)     (105 )   751  
Net cash provided by operating activities $ 352   $ 496   $ 1,155   $ 1,565   $ 5,487  
           
Additions to property, plant and equipment $ (561 ) $ (595 ) $ (1,662 ) $ (2,936 ) $ (5,495 )
Changes in working capital 33   (33 ) 141   (540 ) 335  
Cash additions to property, plant and equipment $ (528 ) $ (628 ) $ (1,521 ) $ (3,476 ) $ (5,160 )

 

(a) Non-GAAP financial measure. See "Non-GAAP Measures" above for further discussion.

 

(b) The Company's Angola assets and Norway business were sold in 2014 and are reflected as discontinued operations.

 

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) 2015 2015 2014 2015 2014
Revenues and other income:          
  Sales and other operating revenues, including related party $ 1,064   $ 1,300   $ 2,001   $ 4,951   $ 8,736  
   Marketing revenues 100   84   397   571   2,110  
  Income from equity method investments 47   36   78   145   424  
  Net gain (loss) on disposal of assets 228   (109 ) (2 ) 120   (90 )
  Other income 36   12   23   74   78  
Total revenues and other income 1,475   1,323   2,497   5,861   11,258  
Costs and expenses:          
  Production 394   406   549   1,694   2,246  
  Marketing, including purchases from related parties 98   84   395   569   2,105  
  Other operating 157   93   159   438   462  
  Exploration 532   585   479   1,318   793  
  Depreciation, depletion and amortization 668   717   801   2,957   2,861  
  Impairments 371   337   2   752   132  
  Taxes other than income 43   46   87   234   406  
  General and administrative 126   125   168   590   654  
Total costs and expenses 2,389   2,393   2,640   8,552   9,659  
Income (loss) from operations (914 ) (1,070 ) (143 ) (2,691 ) 1,599  
  Net interest and other (87 ) (75 ) (58 ) (267 ) (238 )
Income (loss) from continuing ops before income taxes (1,001 ) (1,145 ) (201 ) (2,958 ) 1,361  
  Provision (benefit) for income taxes (208 ) (396 ) (108 ) (754 ) 392  
Income (loss) from continuing operations (793 ) (749 ) (93 ) (2,204 ) 969  
Discontinued operations (a)     1,019     2,077  
Net income (loss) $ (793 ) $ (749 ) $ 926   $ (2,204 ) $ 3,046  
Per share data          
Basic:          
  Income (loss) from continuing operations $ (1.17 ) $ (1.11 ) $ (0.14 ) $ (3.26 ) $ 1.42  
  Discontinued operations (a) $   $   $ 1.51   $   $ 3.06  
  Net income (loss) $ (1.17 ) $ (1.11 ) $ 1.37   $ (3.26 ) $ 4.48  
Diluted:          
  Income (loss) from continuing operations $ (1.17 ) $ (1.11 ) $ (0.14 ) $ (3.26 ) $ 1.42  
  Discontinued operations (a) $   $   $ 1.51   $   $ 3.04  
  Net income (loss) $ (1.17 ) $ (1.11 ) $ 1.37   $ (3.26 ) $ 4.46  
Weighted average shares:          
  Basic 678   677   675   677   680  
  Diluted 678   677   675   677   683  

(a) The Company's Angola assets and Norway business were sold in 2014 and are reflected as discontinued operations.

 

Supplemental Statistics (Unaudited) Three Months Ended Year Ended
  Dec. 31 Sept. 30 Dec. 31 Dec. 31 Dec. 31
(in millions) 2015 2015 2014 2015 2014
Segment income (loss)          
North America E&P $ (219 ) $ (61 ) $ (143 ) $ (486 ) $ 693  
International E&P 19   29   81   112   568  
Oil Sands Mining (6 ) (11 ) 23   (113 ) 235  
  Segment income (loss) (206 ) (43 ) (39 ) (487 ) 1,496  
Items not allocated to segments, net of income taxes:          
  Corporate and unallocated (117 ) (95 ) (50 ) (382 ) (336 )
  Net gain (loss) on dispositions 146   (71 )   75   (58 )
  Proved property impairments (20 ) (213 )   (261 ) (70 )
  Unproved property impairments (220 ) (355 )   (575 )  
  Goodwill impairment (340 )     (340 )  
  Loss on equity method investments   (8 )   (8 )  
  Pension settlement (13 ) (12 ) (4 ) (76 ) (63 )
  Unrealized gain (loss) on crude oil derivative instruments (5 ) 50     32    
  Reduction in workforce (6 ) (2 )   (35 )  
  Alberta provincial corporate tax rate increase       (135 )  
  Other (12 )     (12 )  
    Income (loss) from continuing operations (793 ) (749 ) (93 ) (2,204 ) 969  
    Discontinued operations (a)     1,019     2,077  
      Net income (loss) $ (793 ) $ (749 ) $ 926   $ (2,204 ) $ 3,046  
Capital expenditures (b)          
North America E&P $ 505   $ 564   $ 1,452   $ 2,553   $ 4,698  
International E&P 93   30   148   368   534  
Oil Sands Mining (c) (36 ) (11 ) 40   (10 ) 212  
Discontinued operations (a)     14     390  
Corporate (1 ) 12   22   25   51  
    Total $ 561   $ 595   $ 1,676   $ 2,936   $ 5,885  
Exploration expenses          
North America E&P $ 214   $ 22   $ 414   $ 362   $ 608  
International E&P 16   10   65   101   185  
    Segment exploration expenses 230   32   479   463   793  
    Not allocated to segments 302   553     855    
      Total $ 532   $ 585   $ 479   $ 1,318   $ 793  
Provision (benefit) for income taxes          
Current income taxes $ 8   $ 9   $ 141   $ 52   $ 304  
Deferred income taxes (216 ) (405 ) (249 ) (806 ) 88  
    Total $ (208 ) $ (396 ) $ (108 ) $ (754 ) $ 392  

(a) The Company's Angola assets and Norway business were sold in 2014 and are reflected as discontinued operations.
(b) Capital expenditures include accruals.
(c) Reflects reimbursements earned from the governments of Canada and Alberta related to funds previously expended for Quest CCS capital equipment. Quest CCS was successfully completed and commissioned in fourth quarter 2015.

 

  Three Months Ended Year Ended
  Dec. 31 Sept. 30 Dec. 31 Dec. 31 Dec. 31
(mboed) 2015 2015 2014 2015 2014
Net production available for sale          
North America E&P (a) 260   263   262   270   238  
International E&P excluding Libya (b) and Disc Ops (c) 123   114   126   116   120  
Combined North America & International E&P, excluding Libya (b) and Disc Ops (c) 383   377   388   386   358  
Oil Sands Mining (d) 49   57   42   45   41  
Total continuing operations excluding Libya 432   434   430   431   399  
Discontinued operations (c)     9     53  
Total Company excluding Libya 432   434   439   431   452  
Libya     22     8  
Total Company 432   434   461   431   460  

 

(a) The sale of the Company's East Texas, North Louisiana and Wilburton, Oklahoma natural gas assets closed in August 2015, and the sale of its Gulf of Mexico assets closed in December 2015 and February 2016.
(b) Libya is excluded because of uncertainty around timing of future production and sales levels.
(c) The Company's Angola assets and Norway business were sold in 2014 and are reflected as discontinued operations.
(d) Upgraded bitumen excluding blendstocks.

 

  Three Months Ended Year Ended
  Dec. 31 Sept. 30 Dec. 31 Dec. 31 Dec. 31
(mboed) 2015 2015 2014 2015 2014
Net production available for sale          
North America E&P 260   263   262   270   238  
Less: Divestitures (a) (10 ) (14 ) (17 ) (14 ) (18 )
   Divestiture-adjusted North America E&P 250   249   245   256   220  

 

(a) Divestitures include the sale of East Texas, North Louisiana and Wilburton, Oklahoma assets closed in August 2015, and the sale of Gulf of Mexico assets closed in December 2015 and February 2016. These production volumes have been removed from all periods shown.

 

Supplemental Statistics (Unaudited) Three Months Ended Year Ended
  Dec. 31 Sept. 30 Dec. 31 Dec. 31 Dec. 31
  2015 2015 2014 2015 2014
North America E&P - net sales volumes          
Liquid hydrocarbons (mbbld) 200   205   207   210   186  
  Bakken 52   58   52   55   48  
  Eagle Ford 99   100   107   106   91  
  Oklahoma resource basins 13   10   9   12   8  
  Other North America (a) 36   37   39   37   39  
 Crude oil and condensate (mbbld) 159   166   173   171   157  
  Bakken 48   53   49   51   45  
  Eagle Ford 72   74   85   80   72  
  Oklahoma resource basins 5   4   3   5   3  
  Other North America (a) 34   35   36   35   37  
 Natural gas liquids (mbbld) 41   39   34   39   29  
  Bakken 4   5   3   4   3  
  Eagle Ford 27   26   23   26   19  
  Oklahoma resource basins 8   6   5   7   5  
  Other North America (a) 2   2   3   2   2  
 Natural gas (mmcfd) 345   338   331   351   310  
  Bakken 27   19   21   22   18  
  Eagle Ford 166   161   144   165   123  
  Oklahoma resource basins 89   76   64   81   61  
  Other North America (a) 63   82   102   83   108  
 Total North America E&P (mboed) 258   261   262   269   238  
International E&P - net sales volumes          
Liquid hydrocarbons (mbbld) 43   46   65   43   49  
  Equatorial Guinea 29   31   32   29   31  
  United Kingdom 14   15   11   14   11  
  Libya     22     7  
 Crude oil and condensate (mbbld) 32   35   55   33   39  
  Equatorial Guinea 18   21   22   19   21  
  United Kingdom 14   14   11   14   11  
  Libya     22     7  
 Natural gas liquids (mbbld) 11   11   10   10   10  
  Equatorial Guinea 11   10   10   10   10  
  United Kingdom   1        
 Natural gas (mmcfd) 467   441   491   439   468  
  Equatorial Guinea 438   418   455   410   439  
  United Kingdom (b) 29   23   34   29   28  
  Libya     2     1  
 Total International E&P (mboed) 121   119   147   116   127  
Oil Sands Mining - net sales volumes          
Synthetic crude oil (mbbld) (c) 59   65   55   53   50  
           
  Total continuing operations - net sales volumes (mboed) 438   445   464   438   415  
  Discontinued operations - net sales volumes (mboed)(d)     10     54  
Total Company - net sales volumes (mboed) 438   445   474   438   469  
Net sales volumes of equity method investees (mtd)          
  LNG 6,569   5,700   6,675   5,884   6,535  
  Methanol 1,064   1,125   1,131   937   1,092  

 

(a) Includes Gulf of Mexico and other conventional onshore U.S. production.
(b) Includes natural gas acquired for injection and subsequent resale of 8 mmcfd, 8 mmcfd, 9 mmcfd, 8 mmcfd and 6 mmcfd in the fourth and third quarters of 2015, and fourth quarter of 2014, and the years 2015 and 2014, respectively.
(c) Includes blendstocks.
(d) The Company's Angola assets and Norway business were sold in 2014 and are reflected as discontinued operations.

 

Supplemental Statistics (Unaudited) Three Months Ended Year Ended
  Dec. 31 Sept. 30 Dec. 31 Dec. 31 Dec. 31
  2015 2015 2014 2015 2014
North America E&P - average price realizations (a)          
Liquid hydrocarbons ($ per bbl) $ 32.47   $ 35.75   $ 59.33   $ 37.85   $ 77.02  
  Bakken 36.03   37.41   60.09   40.23   79.41  
  Eagle Ford 31.34   34.87   58.88   36.75   75.83  
  Oklahoma resource basins 22.66   22.70   39.48   25.84   50.86  
  Other North America (b) 33.98   39.25   64.05   41.16   81.88  
 Crude oil and condensate ($ per bbl) (c) $ 37.71   $ 41.37   $ 66.16   $ 43.50   $ 85.25  
  Bakken 38.81   40.18   61.74   42.72   81.63  
  Eagle Ford 38.27   42.74   68.63   44.45   87.99  
  Oklahoma resource basins 38.29   40.48   68.82   43.78   87.15  
  Other North America (b) 34.79   40.37   66.12   42.42   84.21  
 Natural gas liquids ($ per bbl) $ 12.53   $ 11.88   $ 24.80   $ 13.37   $ 33.42  
  Bakken 5.75   5.07   33.79   6.12   43.25  
  Eagle Ford 12.65   12.15   22.59   13.14   29.60  
  Oklahoma resource basins 12.80   11.38   21.65   13.90   32.61  
  Other North America (b) 22.78   23.21   38.64   24.63   51.12  
 Natural gas ($ per mcf) $ 2.12   $ 2.75   $ 3.90   $ 2.66   $ 4.57  
  Bakken 1.62   1.96   4.75   2.23   5.28  
  Eagle Ford 2.15   2.85   4.03   2.64   4.43  
  Oklahoma resource basins 2.14   2.82   4.08   2.54   4.49  
  Other North America (b) 2.22   2.70   3.44   2.93   4.65  
International E&P - average price realizations          
Liquid hydrocarbons ($ per bbl) $ 29.18   $ 35.88   $ 61.19   $ 36.67   $ 68.98  
  Equatorial Guinea 22.82   28.03   42.40   28.50   54.29  
  United Kingdom 41.85   52.36   58.81   53.00   93.75  
  Libya     89.18     94.70  
 Crude oil and condensate ($ per bbl) $ 38.43   $ 46.18   $ 72.13   $ 47.50   $ 87.23  
  Equatorial Guinea 35.42   41.24   61.68   42.83   81.01  
  United Kingdom 42.17   53.48   58.89   53.91   94.31  
  Libya     89.18     94.70  
 Natural gas liquids ($ per bbl) $ 2.08   $ 2.69   $ 1.28   $ 2.81   $ 2.46  
  Equatorial Guinea (d) 1.00   1.00   1.00   1.00   1.00  
  United Kingdom 31.01   28.81   43.80   32.53   67.73  
 Natural gas ($ per mcf) $ 0.58   $ 0.59   $ 0.71   $ 0.68   $ 0.72  
  Equatorial Guinea (d) 0.24   0.24   0.24   0.24   0.24  
  United Kingdom 5.73   6.92   7.06   6.85   8.27  
  Libya     0.09     3.11  
Oil Sands Mining - average price realizations          
Synthetic crude oil ($ per bbl) $ 34.65   $ 39.49   $ 65.56   $ 40.13   $ 83.35  
           
Discontinued operations - average price realizations ($ per boe)(e)     84.16     104.10  
Benchmark          
  WTI crude oil (per bbl)(f) $ 42.16   $ 46.50   $ 73.20   $ 48.76   $ 92.21  
  Brent (Europe) crude oil (per bbl)(g) $ 43.56   $ 50.23   $ 76.40   $ 52.35   $ 99.02  
  Henry Hub natural gas (per mmbtu)(h) $ 2.27   $ 2.77   $ 4.00   $ 2.66   $ 4.42  
  WCS crude oil (per bbl)(i) $ 27.69   $ 33.16   $ 58.90   $ 35.28   $ 73.60  

 

(a) Excludes gains or losses on derivative instruments.
(b) Includes Gulf of Mexico and other conventional onshore U.S. production.
(c) Inclusion of realized gains on crude oil derivative instruments would have increased average price realizations by $3.03, $1.87, and $1.24 for fourth quarter, third quarter and full year 2015. There were no crude oil derivative instruments in 2014.
(d) 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. Marathon Oil includes its share of income from each of these equity method investees in the International E&P segment.
(e) The Company's Angola assets and Norway business were sold in 2014 and are reflected as discontinued operations.
(f) NYMEX
(g) Average of monthly prices obtained from Energy Information Administration ("EIA") website.
(h) Settlement date average per mmbtu.
(i) Monthly pricing based upon average WTI adjusted for differentials unique to western Canada.

 

  Three Months Ended Year Ended
  Dec. 31 Sept. 30 Dec. 31 Dec. 31 Dec. 31
(In millions) 2015 2015 2014 2015 2014
Production expenses          
North America E&P $ 164   $ 179   $ 230   $ 724   $ 891  
International E&P 63   61   79   255   386  
   Total $ 227   $ 240   $ 309   $ 979   $ 1,277  
           
Total Company general and administrative expenses $ 126   $ 125   $ 168   $ 590   $ 654  
Adjustments for special items:          
  Pension settlement (20 ) (18 ) (6 ) (119 ) (99 )
  Reduction in workforce (8 ) (4 )   (55 )  
    Adjusted general and administrative expenses (a) $ 98   $ 103   $ 162   $ 416   $ 555  
E&P production expenses and adjusted general and administrative expenses (a) $ 325   $ 343   $ 471   $ 1,395   $ 1,832  

 

(a) Non-GAAP financial measure. See "Non-GAAP Measures" above for further discussion.

 

Estimated Net Proved Reserves
  North America E&P International E&P OSM Total
  Total (mmboe) Total (mmboe) SCO (mmbbl) (mmboe)
As of Dec. 31, 2014 986   564   648   2,198  
Additions 246   1     247  
Revisions (173 ) (2 ) 67   (108 )
Acquisitions 1       1  
Dispositions (18 )     (18 )
Production (98 ) (42 ) (17 ) (157 )
As of Dec. 31, 2015 944   521   698   2,163  
Reserve Replacement Ratio (including acquisitions & dispositions)       78 %
Reserve Replacement Ratio (excluding dispositions)        89 %
Organic Reserve Replacement Ratio (excluding acquisitions, dispositions & revisions)       157 %
 
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