(Mark One)
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[X]
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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For the Quarterly Period Ended June 30, 2017
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[ ]
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from _____ to _____
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Delaware
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25-0996816
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Large accelerated filer
þ
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Accelerated filer
o
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Non-accelerated filer
o
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(Do not check if a smaller reporting company)
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Smaller reporting company
o
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Emerging growth company
o
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Table of Contents
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Page
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||
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Three Months Ended
|
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Six Months Ended
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||||||||||||
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June 30,
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June 30,
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||||||||||||
(In millions, except per share data)
|
2017
|
|
2016
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|
2017
|
|
2016
|
||||||||
Revenues and other income:
|
|
|
|
|
|
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||||||||
Sales and other operating revenues, including related party
|
$
|
958
|
|
|
$
|
685
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|
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$
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1,912
|
|
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$
|
1,251
|
|
Marketing revenues
|
35
|
|
|
76
|
|
|
69
|
|
|
122
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|
||||
Income from equity method investments
|
51
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|
|
37
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|
|
120
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|
|
51
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|
||||
Net gain (loss) on disposal of assets
|
6
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|
|
294
|
|
|
7
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|
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234
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|
||||
Other income
|
9
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|
|
11
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|
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23
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|
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15
|
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||||
Total revenues and other income
|
1,059
|
|
|
1,103
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|
2,131
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1,673
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||||
Costs and expenses:
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|
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|||||
Production
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176
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|
185
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327
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372
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||||
Marketing, including purchases from related parties
|
38
|
|
|
75
|
|
|
72
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|
|
121
|
|
||||
Other operating
|
111
|
|
|
87
|
|
|
200
|
|
|
190
|
|
||||
Exploration
|
30
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|
|
182
|
|
|
58
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|
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206
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|
||||
Depreciation, depletion and amortization
|
592
|
|
|
512
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|
|
1,148
|
|
|
1,061
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||||
Impairments
|
—
|
|
|
—
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|
|
4
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|
|
1
|
|
||||
Taxes other than income
|
45
|
|
|
35
|
|
|
84
|
|
|
78
|
|
||||
General and administrative
|
93
|
|
|
131
|
|
|
202
|
|
|
282
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|
||||
Total costs and expenses
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1,085
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|
1,207
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|
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2,095
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2,311
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||||
Income (loss) from operations
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(26
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)
|
|
(104
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)
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36
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|
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(638
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)
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||||
Net interest and other
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(86
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)
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(88
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)
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(164
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)
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(167
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)
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||||
Income (loss) from continuing operations before income taxes
|
(112
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)
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(192
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)
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(128
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)
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(805
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)
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Provision (benefit) for income taxes
|
41
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(54
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)
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75
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(307
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)
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||||
Income (loss) from continuing operations
|
(153
|
)
|
|
(138
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)
|
|
(203
|
)
|
|
(498
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)
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||||
Income (loss) from discontinued operations
|
14
|
|
|
(32
|
)
|
|
(4,893
|
)
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|
(79
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)
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||||
Net income (loss)
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$
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(139
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)
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|
$
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(170
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)
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$
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(5,096
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)
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$
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(577
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)
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Per basic share:
|
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|
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|
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Income (loss) from continuing operations
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$
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(0.18
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)
|
|
$
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(0.16
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)
|
|
$
|
(0.24
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)
|
|
$
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(0.63
|
)
|
Income (loss) from discontinued operations
|
$
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0.02
|
|
|
$
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(0.04
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)
|
|
$
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(5.76
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)
|
|
$
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(0.10
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)
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Net income (loss)
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$
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(0.16
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)
|
|
$
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(0.20
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)
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$
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(6.00
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)
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$
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(0.73
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)
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Per diluted share:
|
|
|
|
|
|
|
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||||||||
Income (loss) from continuing operations
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$
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(0.18
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)
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|
$
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(0.16
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)
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|
$
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(0.24
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)
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|
$
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(0.63
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)
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Income (loss) from discontinued operations
|
$
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0.02
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|
|
$
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(0.04
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)
|
|
$
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(5.76
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)
|
|
$
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(0.10
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)
|
Net income (loss)
|
$
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(0.16
|
)
|
|
$
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(0.20
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)
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$
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(6.00
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)
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$
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(0.73
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)
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Dividends per share
|
$
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0.05
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$
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0.05
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$
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0.10
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$
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0.10
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Weighted average common shares outstanding:
|
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Basic
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850
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848
|
|
|
850
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|
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790
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Diluted
|
850
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848
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850
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790
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Three Months Ended
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Six Months Ended
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||||||||||||
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June 30,
|
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June 30,
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||||||||||||
(In millions)
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2017
|
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2016
|
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2017
|
|
2016
|
||||||||
Net income (loss)
|
$
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(139
|
)
|
|
$
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(170
|
)
|
|
$
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(5,096
|
)
|
|
$
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(577
|
)
|
Other comprehensive income (loss)
|
|
|
|
|
|
|
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|||||
Postretirement and postemployment plans
|
|
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|
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Change in actuarial loss and other
|
8
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|
|
19
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|
12
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(5
|
)
|
||||
Income tax provision (benefit)
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
2
|
|
||||
Postretirement and postemployment plans, net of tax
|
8
|
|
|
12
|
|
|
12
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(3
|
)
|
||||
Derivative hedges
|
|
|
|
|
|
|
|
||||||||
Net unrecognized gain (loss)
|
(14
|
)
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
||||
Income tax provision
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Derivative hedges, net of tax
|
(14
|
)
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
||||
Foreign currency hedges
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net recognized gain reclassified to discontinued operations
|
—
|
|
|
—
|
|
|
34
|
|
|
—
|
|
||||
Income tax benefit (provision)
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
||||
Foreign currency hedges, net of tax
|
—
|
|
|
—
|
|
|
30
|
|
|
—
|
|
||||
Other, Net of Tax
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income (loss)
|
(6
|
)
|
|
10
|
|
|
29
|
|
|
(5
|
)
|
||||
Comprehensive income (loss)
|
$
|
(145
|
)
|
|
$
|
(160
|
)
|
|
$
|
(5,067
|
)
|
|
$
|
(582
|
)
|
|
June 30,
|
|
December 31,
|
||||
(In millions, except per share data)
|
2017
|
|
2016
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
2,614
|
|
|
$
|
2,488
|
|
Receivables, less reserve of $5 and $6
|
767
|
|
|
748
|
|
||
Notes receivable
|
742
|
|
|
—
|
|
||
Inventories
|
140
|
|
|
136
|
|
||
Other current assets
|
160
|
|
|
66
|
|
||
Current assets held for sale
|
1
|
|
|
227
|
|
||
Total current assets
|
4,424
|
|
|
3,665
|
|
||
Equity method investments
|
821
|
|
|
931
|
|
||
Property, plant and equipment, less accumulated depreciation,
depletion and amortization of $21,238 and $20,255
|
18,337
|
|
|
16,727
|
|
||
Goodwill
|
115
|
|
|
115
|
|
||
Other noncurrent assets
|
543
|
|
|
558
|
|
||
Noncurrent assets held for sale
|
1
|
|
|
9,098
|
|
||
Total assets
|
$
|
24,241
|
|
|
$
|
31,094
|
|
Liabilities
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
1,158
|
|
|
$
|
967
|
|
Payroll and benefits payable
|
92
|
|
|
129
|
|
||
Accrued taxes
|
78
|
|
|
94
|
|
||
Other current liabilities
|
206
|
|
|
243
|
|
||
Long-term debt due within one year
|
548
|
|
|
686
|
|
||
Current liabilities held for sale
|
—
|
|
|
121
|
|
||
Total current liabilities
|
2,082
|
|
|
2,240
|
|
||
Long-term debt
|
6,715
|
|
|
6,581
|
|
||
Deferred tax liabilities
|
839
|
|
|
769
|
|
||
Defined benefit postretirement plan obligations
|
340
|
|
|
345
|
|
||
Asset retirement obligations
|
1,642
|
|
|
1,602
|
|
||
Deferred credits and other liabilities
|
211
|
|
|
225
|
|
||
Noncurrent liabilities held for sale
|
7
|
|
|
1,791
|
|
||
Total liabilities
|
11,836
|
|
|
13,553
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Stockholders’ Equity
|
|
|
|
|
|
||
Preferred stock – no shares issued or outstanding (no par value,
26 million shares authorized)
|
—
|
|
|
—
|
|
||
Common stock:
|
|
|
|
|
|
||
Issued – 937 million shares and 937 million shares (par value $1 per share,
1.1 billion shares authorized)
|
937
|
|
|
937
|
|
||
Securities exchangeable into common stock – no shares issued or
outstanding (no par value, 29 million shares authorized)
|
—
|
|
|
—
|
|
||
Held in treasury, at cost – 87 million and 90 million shares
|
(3,318
|
)
|
|
(3,431
|
)
|
||
Additional paid-in capital
|
7,349
|
|
|
7,446
|
|
||
Retained earnings
|
7,491
|
|
|
12,672
|
|
||
Accumulated other comprehensive loss
|
(54
|
)
|
|
(83
|
)
|
||
Total stockholders' equity
|
12,405
|
|
|
17,541
|
|
||
Total liabilities and stockholders' equity
|
$
|
24,241
|
|
|
$
|
31,094
|
|
|
Six Months Ended
|
||||||
|
June 30,
|
||||||
(In millions)
|
2017
|
|
2016
|
||||
Operating activities:
|
|
|
|
|
|
||
Net income (loss)
|
$
|
(5,096
|
)
|
|
$
|
(577
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
||
Discontinued operations
|
4,893
|
|
|
79
|
|
||
Depreciation, depletion and amortization
|
1,148
|
|
|
1,061
|
|
||
Exploratory dry well costs and unproved property impairments
|
45
|
|
|
159
|
|
||
Net (gain) loss on disposal of assets
|
(7
|
)
|
|
(234
|
)
|
||
Deferred income taxes
|
38
|
|
|
(352
|
)
|
||
Net (gain) loss on derivative instruments
|
(140
|
)
|
|
90
|
|
||
Net cash received (paid) in settlement of derivative instruments
|
3
|
|
|
44
|
|
||
Stock based compensation
|
26
|
|
|
26
|
|
||
Equity method investments, net
|
61
|
|
|
22
|
|
||
Changes in:
|
|
|
|
|
|||
Current receivables
|
(15
|
)
|
|
92
|
|
||
Inventories
|
(5
|
)
|
|
25
|
|
||
Current accounts payable and accrued liabilities
|
(41
|
)
|
|
(207
|
)
|
||
All other operating, net
|
13
|
|
|
39
|
|
||
Net cash provided by operating activities from continuing operations
|
923
|
|
|
267
|
|
||
Investing activities:
|
|
|
|
|
|
||
Additions to property, plant and equipment
|
(775
|
)
|
|
(728
|
)
|
||
Acquisitions, net of cash acquired
|
(1,828
|
)
|
|
—
|
|
||
Deposits for acquisitions
|
—
|
|
|
(89
|
)
|
||
Disposal of assets, net of cash transferred to buyer
|
1,726
|
|
|
758
|
|
||
Equity method investments - return of capital
|
49
|
|
|
37
|
|
||
All other investing, net
|
(5
|
)
|
|
2
|
|
||
Net cash used in investing activities from continuing operations
|
(833
|
)
|
|
(20
|
)
|
||
Financing activities:
|
|
|
|
|
|
||
Debt repayments
|
(1
|
)
|
|
—
|
|
||
Common stock issuance
|
—
|
|
|
1,236
|
|
||
Purchases of common stock
|
(10
|
)
|
|
(4
|
)
|
||
Dividends paid
|
(85
|
)
|
|
(77
|
)
|
||
Net cash provided by (used in) financing activities
|
(96
|
)
|
|
1,155
|
|
||
Cash Flow from Discontinued Operations:
|
|
|
|
||||
Operating activities
|
141
|
|
|
(11
|
)
|
||
Investing activities
|
(13
|
)
|
|
(25
|
)
|
||
Changes in cash included in current assets held for sale
|
2
|
|
|
36
|
|
||
Net increase in cash and cash equivalents of discontinued operations
|
130
|
|
|
—
|
|
||
Effect of exchange rate on cash and cash equivalents
|
2
|
|
|
(3
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
126
|
|
|
1,399
|
|
||
Cash and cash equivalents at beginning of period
|
2,488
|
|
|
1,119
|
|
||
Cash and cash equivalents at end of period
|
$
|
2,614
|
|
|
$
|
2,518
|
|
4
.
|
Income (Loss) per Common Share
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(In millions, except per share data)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Income (loss) from operations
|
$
|
(153
|
)
|
|
$
|
(138
|
)
|
|
$
|
(203
|
)
|
|
$
|
(498
|
)
|
Income (loss) from discontinued operations
|
14
|
|
|
(32
|
)
|
|
(4,893
|
)
|
|
(79
|
)
|
||||
Net income (loss)
|
$
|
(139
|
)
|
|
$
|
(170
|
)
|
|
$
|
(5,096
|
)
|
|
$
|
(577
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding
|
850
|
|
|
848
|
|
|
850
|
|
|
790
|
|
||||
Per basic share:
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations
|
$
|
(0.18
|
)
|
|
$
|
(0.16
|
)
|
|
$
|
(0.24
|
)
|
|
$
|
(0.63
|
)
|
Income (loss) from discontinued operations
|
$
|
0.02
|
|
|
$
|
(0.04
|
)
|
|
$
|
(5.76
|
)
|
|
$
|
(0.10
|
)
|
Net income
|
$
|
(0.16
|
)
|
|
$
|
(0.20
|
)
|
|
$
|
(6.00
|
)
|
|
$
|
(0.73
|
)
|
Per diluted share:
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations
|
$
|
(0.18
|
)
|
|
$
|
(0.16
|
)
|
|
$
|
(0.24
|
)
|
|
$
|
(0.63
|
)
|
Income (loss) from discontinued operations
|
$
|
0.02
|
|
|
$
|
(0.04
|
)
|
|
$
|
(5.76
|
)
|
|
$
|
(0.10
|
)
|
Net income
|
$
|
(0.16
|
)
|
|
$
|
(0.20
|
)
|
|
$
|
(6.00
|
)
|
|
$
|
(0.73
|
)
|
6
.
|
Dispositions
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|||||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Total sales and other revenues and other income
|
|
$
|
173
|
|
|
$
|
199
|
|
|
$
|
431
|
|
|
$
|
359
|
|
Net gain (loss) on disposal of assets
|
|
(43
|
)
|
|
—
|
|
|
(43
|
)
|
|
—
|
|
||||
Total revenues and other income
|
|
130
|
|
|
199
|
|
|
388
|
|
|
359
|
|
||||
Costs and expenses:
|
|
|
|
|
|
|
|
|
||||||||
Production expenses
|
|
103
|
|
|
165
|
|
|
254
|
|
|
306
|
|
||||
Depreciation, depletion and amortization
|
|
1
|
|
|
49
|
|
|
40
|
|
|
109
|
|
||||
Impairments
|
|
—
|
|
|
—
|
|
|
6,636
|
|
|
—
|
|
||||
Other
|
|
12
|
|
|
31
|
|
|
25
|
|
|
60
|
|
||||
Total costs and expenses
|
|
116
|
|
|
245
|
|
|
6,955
|
|
|
475
|
|
||||
Pretax income (loss) from discontinued operations
|
|
14
|
|
|
(46
|
)
|
|
(6,567
|
)
|
|
(116
|
)
|
||||
Provision (benefit) for income taxes
|
|
—
|
|
|
(14
|
)
|
|
(1,674
|
)
|
|
(37
|
)
|
||||
Income (loss) from discontinued operations
|
|
$
|
14
|
|
|
$
|
(32
|
)
|
|
$
|
(4,893
|
)
|
|
$
|
(79
|
)
|
|
|
June 30,
|
|
December 31,
|
||||
(In millions)
|
|
2017
|
|
2016
|
||||
Assets held for sale
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
—
|
|
|
$
|
2
|
|
Accounts receivables
|
|
—
|
|
|
129
|
|
||
Inventories
|
|
—
|
|
|
91
|
|
||
Other
|
|
—
|
|
|
4
|
|
||
Total current assets held for sale—discontinued operations
|
|
—
|
|
|
226
|
|
||
Total current assets held for sale—continuing operations
|
|
1
|
|
|
1
|
|
||
Total current assets held for sale
|
|
$
|
1
|
|
|
$
|
227
|
|
|
|
|
|
|
||||
Noncurrent assets:
|
|
|
|
|
||||
Property, plant and equipment, net
|
|
$
|
—
|
|
|
$
|
8,991
|
|
Other
|
|
—
|
|
|
106
|
|
||
Total noncurrent assets held for sale—discontinued operations
|
|
—
|
|
|
9,097
|
|
||
Total noncurrent assets held for sale—continuing operations
|
|
1
|
|
|
1
|
|
||
Total noncurrent assets held for sale
|
|
$
|
1
|
|
|
$
|
9,098
|
|
|
|
|
|
|
||||
Liabilities associated with assets held for sale
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
—
|
|
|
$
|
111
|
|
Other
|
|
—
|
|
|
10
|
|
||
Total current liabilities held for sale—discontinued operations
|
|
—
|
|
|
121
|
|
||
Total current liabilities held for sale—continuing operations
|
|
—
|
|
|
—
|
|
||
Total current liabilities held for sale
|
|
$
|
—
|
|
|
$
|
121
|
|
|
|
|
|
|
||||
Noncurrent liabilities:
|
|
|
|
|
||||
Asset retirement obligations
|
|
$
|
—
|
|
|
$
|
95
|
|
Deferred tax liabilities
|
|
—
|
|
|
1,669
|
|
||
Other
|
|
—
|
|
|
20
|
|
||
Total noncurrent liabilities held for sale—discontinued operations
|
|
—
|
|
|
1,784
|
|
||
Total noncurrent liabilities held for sale—continuing operations
|
|
7
|
|
|
7
|
|
||
Total noncurrent liabilities held for sale
|
|
$
|
7
|
|
|
$
|
1,791
|
|
•
|
U.S. E&P
– explores for, produces and markets crude oil and condensate, NGLs and natural gas in the
United States
|
•
|
Int’l E&P – explores for, produces and markets crude oil and condensate, NGLs and natural gas outside of the
United States
and produces and markets products manufactured from natural gas, such as LNG and methanol, in Equatorial Guinea (“E.G.”)
|
|
Three Months Ended June 30, 2017
|
||||||||||||||
|
|
Not Allocated
|
|
|
|||||||||||
(In millions)
|
U.S. E&P
|
|
Int'l E&P
|
|
to Segments
|
|
Total
|
||||||||
Sales and other operating revenues
|
$
|
695
|
|
|
$
|
220
|
|
|
$
|
43
|
|
(c)
|
$
|
958
|
|
Marketing revenues
|
7
|
|
|
28
|
|
|
—
|
|
|
35
|
|
||||
Total revenues
|
702
|
|
|
248
|
|
|
43
|
|
|
993
|
|
||||
Income from equity method investments
|
—
|
|
|
51
|
|
|
—
|
|
|
51
|
|
||||
Net gain on disposal of assets and other income
|
2
|
|
|
4
|
|
|
9
|
|
|
15
|
|
||||
Less:
|
|
|
|
|
|
|
|
||||||||
Production expenses
|
118
|
|
|
58
|
|
|
—
|
|
|
176
|
|
||||
Marketing costs
|
9
|
|
|
29
|
|
|
—
|
|
|
38
|
|
||||
Exploration expenses
|
30
|
|
|
—
|
|
|
—
|
|
|
30
|
|
||||
Depreciation, depletion and amortization
|
495
|
|
|
89
|
|
|
8
|
|
|
592
|
|
||||
Other expenses
(a)
|
126
|
|
|
22
|
|
|
56
|
|
(d)
|
204
|
|
||||
Taxes other than income
|
33
|
|
|
—
|
|
|
12
|
|
|
45
|
|
||||
Net interest and other
|
—
|
|
|
—
|
|
|
86
|
|
|
86
|
|
||||
Income tax provision (benefit)
|
—
|
|
|
46
|
|
|
(5
|
)
|
|
41
|
|
||||
Segment income (loss) / Income (loss) from continuing operations
|
$
|
(107
|
)
|
|
$
|
59
|
|
|
$
|
(105
|
)
|
|
$
|
(153
|
)
|
Capital expenditures
(b)
|
$
|
575
|
|
|
$
|
14
|
|
|
$
|
10
|
|
|
$
|
599
|
|
(a)
|
Includes other operating expenses and general and administrative expenses.
|
(b)
|
Includes accruals.
|
(c)
|
Unrealized gain on commodity derivative instruments.
|
(d)
|
Includes pension settlement loss of
$3 million
. (See Note
8
.)
|
|
Three Months Ended June 30, 2016
|
||||||||||||||
|
|
Not Allocated
|
|
|
|||||||||||
(In millions)
|
U.S. E&P
|
|
Int'l E&P
|
|
to Segments
|
|
Total
|
||||||||
Sales and other operating revenues
|
$
|
617
|
|
|
$
|
159
|
|
|
$
|
(91
|
)
|
(c)
|
$
|
685
|
|
Marketing revenues
|
53
|
|
|
23
|
|
|
—
|
|
|
76
|
|
||||
Total revenues
|
670
|
|
|
182
|
|
|
(91
|
)
|
|
761
|
|
||||
Income from equity method investments
|
—
|
|
|
37
|
|
|
—
|
|
|
37
|
|
||||
Net gain on disposal of assets and other income
|
2
|
|
|
7
|
|
|
296
|
|
(d)
|
305
|
|
||||
Less:
|
|
|
|
|
|
|
|
||||||||
Production expenses
|
129
|
|
|
56
|
|
|
—
|
|
|
185
|
|
||||
Marketing costs
|
52
|
|
|
23
|
|
|
—
|
|
|
75
|
|
||||
Exploration expenses
|
37
|
|
|
4
|
|
|
141
|
|
(e)
|
182
|
|
||||
Depreciation, depletion and amortization
|
433
|
|
|
68
|
|
|
11
|
|
|
512
|
|
||||
Other expenses
(a)
|
97
|
|
|
22
|
|
|
99
|
|
(f)
|
218
|
|
||||
Taxes other than income
|
35
|
|
|
—
|
|
|
—
|
|
|
35
|
|
||||
Net interest and other
|
—
|
|
|
—
|
|
|
88
|
|
|
88
|
|
||||
Income tax provision (benefit)
|
(41
|
)
|
|
(2
|
)
|
|
(11
|
)
|
|
(54
|
)
|
||||
Segment income (loss) / Income (loss) from continuing operations
|
$
|
(70
|
)
|
|
$
|
55
|
|
|
$
|
(123
|
)
|
|
$
|
(138
|
)
|
Capital expenditures
(b)
|
$
|
153
|
|
|
$
|
12
|
|
|
$
|
5
|
|
|
$
|
170
|
|
(a)
|
Includes other operating expenses and general and administrative expenses.
|
(b)
|
Includes accruals.
|
(c)
|
Unrealized loss on commodity derivative instruments.
|
(d)
|
Primarily related to partial sale of Wyoming upstream and midstream assets. (See Note
6
.)
|
(e)
|
Impairments associated with decision to not drill remaining Gulf of Mexico undeveloped leases.
|
(f)
|
Includes pension settlement loss of
$31 million
(See Note
8
).
|
|
Six Months Ended June 30, 2017
|
||||||||||||||
|
|
Not Allocated
|
|
|
|||||||||||
(In millions)
|
U.S. E&P
|
|
Int'l E&P
|
|
to Segments
|
|
Total
|
||||||||
Sales and other operating revenues
|
$
|
1,369
|
|
|
$
|
423
|
|
|
$
|
120
|
|
(c)
|
$
|
1,912
|
|
Marketing revenues
|
13
|
|
|
56
|
|
|
—
|
|
|
69
|
|
||||
Total revenues
|
1,382
|
|
|
479
|
|
|
120
|
|
|
1,981
|
|
||||
Income from equity method investments
|
—
|
|
|
120
|
|
|
—
|
|
|
120
|
|
||||
Net gain on disposal of assets and other income
|
7
|
|
|
14
|
|
|
9
|
|
|
30
|
|
||||
Less:
|
|
|
|
|
|
|
|
||||||||
Production expenses
|
227
|
|
|
100
|
|
|
—
|
|
|
327
|
|
||||
Marketing costs
|
16
|
|
|
56
|
|
|
—
|
|
|
72
|
|
||||
Exploration expenses
|
56
|
|
|
2
|
|
|
—
|
|
|
58
|
|
||||
Depreciation, depletion and amortization
|
967
|
|
|
164
|
|
|
17
|
|
|
1,148
|
|
||||
Impairments
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||
Other expenses
(a)
|
233
|
|
|
43
|
|
|
126
|
|
(d)
|
402
|
|
||||
Taxes other than income
|
72
|
|
|
—
|
|
|
12
|
|
|
84
|
|
||||
Net interest and other
|
—
|
|
|
—
|
|
|
164
|
|
|
164
|
|
||||
Income tax provision (benefit)
|
—
|
|
|
96
|
|
|
(21
|
)
|
|
75
|
|
||||
Segment income (loss) / Income (loss) from continuing operations
|
$
|
(186
|
)
|
|
$
|
152
|
|
|
$
|
(169
|
)
|
|
$
|
(203
|
)
|
Capital expenditures
(b)
|
$
|
924
|
|
|
$
|
23
|
|
|
$
|
11
|
|
|
$
|
958
|
|
(a)
|
Includes other operating expenses and general and administrative expenses.
|
(b)
|
Includes accruals.
|
(c)
|
Unrealized gain on commodity derivative instruments.
|
(d)
|
Includes pension settlement loss of
$17 million
. (See Note
8
.)
|
|
Six Months Ended June 30, 2016
|
||||||||||||||
|
|
Not Allocated
|
|
|
|||||||||||
(In millions)
|
U.S. E&P
|
|
Int'l E&P
|
|
to Segments
|
|
Total
|
||||||||
Sales and other operating revenues
|
$
|
1,110
|
|
|
$
|
255
|
|
|
$
|
(114
|
)
|
(c)
|
$
|
1,251
|
|
Marketing revenues
|
84
|
|
|
38
|
|
|
—
|
|
|
122
|
|
||||
Total revenues
|
1,194
|
|
|
293
|
|
|
(114
|
)
|
|
1,373
|
|
||||
Income from equity method investments
|
—
|
|
|
51
|
|
|
—
|
|
|
51
|
|
||||
Net gain on disposal of assets and other income
|
3
|
|
|
13
|
|
|
233
|
|
(d)
|
249
|
|
||||
Less:
|
|
|
|
|
|
|
|
||||||||
Production expenses
|
263
|
|
|
109
|
|
|
—
|
|
|
372
|
|
||||
Marketing costs
|
84
|
|
|
37
|
|
|
—
|
|
|
121
|
|
||||
Exploration expenses
|
55
|
|
|
10
|
|
|
141
|
|
(e)
|
206
|
|
||||
Depreciation, depletion and amortization
|
920
|
|
|
118
|
|
|
23
|
|
|
1,061
|
|
||||
Impairments
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Other expenses
(a)
|
215
|
|
|
38
|
|
|
219
|
|
(f)
|
472
|
|
||||
Taxes other than income
|
77
|
|
|
—
|
|
|
1
|
|
|
78
|
|
||||
Net interest and other
|
—
|
|
|
—
|
|
|
167
|
|
|
167
|
|
||||
Income tax provision (benefit)
|
(153
|
)
|
|
(14
|
)
|
|
(140
|
)
|
|
(307
|
)
|
||||
Segment income (loss) / Income (loss) from continuing operations
|
$
|
(265
|
)
|
|
$
|
59
|
|
|
$
|
(292
|
)
|
|
$
|
(498
|
)
|
Capital expenditures
(b)
|
$
|
468
|
|
|
$
|
44
|
|
|
$
|
8
|
|
|
$
|
520
|
|
(a)
|
Includes other operating expenses and general and administrative expenses.
|
(b)
|
Includes accruals.
|
(c)
|
Unrealized loss on commodity derivative instruments.
|
(d)
|
Related to net gain on disposal of assets (see Note
6
).
|
(e)
|
Impairments associated with decision to not drill remaining Gulf of Mexico undeveloped leases.
|
(f)
|
Includes pension settlement loss of
$79 million
and severance related expenses associated with workforce reductions of
$8 million
(see Note
8
).
|
|
Three Months Ended June 30,
|
||||||||||||||
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
(In millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Service cost
|
$
|
5
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Interest cost
|
7
|
|
|
10
|
|
|
2
|
|
|
2
|
|
||||
Expected return on plan assets
|
(10
|
)
|
|
(13
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization:
|
|
|
|
|
|
|
|
|
|
|
|
||||
– prior service cost (credit)
|
(2
|
)
|
|
(3
|
)
|
|
(1
|
)
|
|
(1
|
)
|
||||
– actuarial loss
|
2
|
|
|
4
|
|
|
—
|
|
|
—
|
|
||||
Net settlement loss
(a)
|
3
|
|
|
31
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit cost
|
$
|
5
|
|
|
$
|
35
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
Six Months Ended June 30,
|
||||||||||||||
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
(In millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Service cost
|
$
|
11
|
|
|
$
|
12
|
|
|
$
|
1
|
|
|
$
|
2
|
|
Interest cost
|
15
|
|
|
21
|
|
|
4
|
|
|
5
|
|
||||
Expected return on plan assets
|
(22
|
)
|
|
(28
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization:
|
|
|
|
|
|
|
|
|
|
|
|||||
– prior service cost (credit)
|
(4
|
)
|
|
(5
|
)
|
|
(3
|
)
|
|
(2
|
)
|
||||
– actuarial loss
|
4
|
|
|
7
|
|
|
—
|
|
|
—
|
|
||||
Net settlement loss
(a)
|
17
|
|
|
79
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit cost
|
$
|
21
|
|
|
$
|
86
|
|
|
$
|
2
|
|
|
$
|
5
|
|
(a)
|
Settlements are recognized as they occur, once it is probable that lump sum payments from a plan for a given year will exceed the plan’s total service and interest cost for that year.
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(In millions)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Total pre-tax income (loss) from continuing operations
|
|
$
|
(112
|
)
|
|
$
|
(192
|
)
|
|
$
|
(128
|
)
|
|
$
|
(805
|
)
|
Total income tax expense (benefit)
|
|
$
|
41
|
|
|
$
|
(54
|
)
|
|
$
|
75
|
|
|
$
|
(307
|
)
|
Effective income tax expense (benefit) rate on continuing operations
|
|
37
|
%
|
|
(28
|
)%
|
|
59
|
%
|
|
(38
|
)%
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income taxes at the statutory tax rate of 35%
|
|
$
|
(39
|
)
|
|
$
|
(67
|
)
|
|
$
|
(45
|
)
|
|
$
|
(282
|
)
|
Effects of foreign operations
|
|
2
|
|
|
5
|
|
|
(2
|
)
|
|
(30
|
)
|
||||
Adjustments to valuation allowances
|
|
76
|
|
|
5
|
|
|
133
|
|
|
5
|
|
||||
State income taxes
|
|
—
|
|
|
3
|
|
|
(13
|
)
|
|
(3
|
)
|
||||
Other federal tax effects
|
|
2
|
|
|
—
|
|
|
2
|
|
|
3
|
|
||||
Income tax expense (benefit) on continuing operations
|
|
$
|
41
|
|
|
$
|
(54
|
)
|
|
$
|
75
|
|
|
$
|
(307
|
)
|
|
June 30,
|
|
December 31,
|
||||
(In millions)
|
2017
|
|
2016
|
||||
Crude oil and natural gas
|
$
|
11
|
|
|
$
|
6
|
|
Supplies and other items
|
129
|
|
|
130
|
|
||
Inventories
|
$
|
140
|
|
|
$
|
136
|
|
|
June 30,
|
|
December 31,
|
||||
(In millions)
|
2017
|
|
2016
|
||||
United States E&P
|
$
|
15,888
|
|
|
$
|
14,158
|
|
International E&P
|
2,358
|
|
|
2,470
|
|
||
Corporate
|
91
|
|
|
99
|
|
||
Net property, plant and equipment
|
$
|
18,337
|
|
|
$
|
16,727
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(In millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Exploration Expenses
|
|
|
|
|
|
|
|
||||||||
Unproved property impairments
|
$
|
25
|
|
|
$
|
133
|
|
|
$
|
45
|
|
|
$
|
144
|
|
Dry well costs
|
—
|
|
|
15
|
|
|
—
|
|
|
15
|
|
||||
Geological and geophysical
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Other
|
5
|
|
|
34
|
|
|
12
|
|
|
47
|
|
||||
Total exploration expenses
|
$
|
30
|
|
|
$
|
182
|
|
|
$
|
58
|
|
|
$
|
206
|
|
|
June 30, 2017
|
||||||||||||||
(In millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Derivative instruments, assets
|
|
|
|
|
|
|
|
||||||||
Commodity
(a)
|
$
|
—
|
|
|
$
|
60
|
|
|
$
|
—
|
|
|
$
|
60
|
|
Interest rate
|
—
|
|
|
54
|
|
|
—
|
|
|
54
|
|
||||
Derivative instruments, assets
|
$
|
—
|
|
|
$
|
114
|
|
|
$
|
—
|
|
|
$
|
114
|
|
Derivative instruments, liabilities
|
|
|
|
|
|
|
|
||||||||
Commodity
(a)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivative instruments, liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(a)
|
Derivative instruments are recorded on a net basis in our balance sheet. See Note
14
.
|
|
December 31, 2016
|
||||||||||||||
(In millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Derivative instruments, assets
|
|
|
|
|
|
|
|
||||||||
Commodity
(a)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest rate
|
—
|
|
|
68
|
|
|
—
|
|
|
68
|
|
||||
Derivative instruments, assets
|
$
|
—
|
|
|
$
|
68
|
|
|
$
|
—
|
|
|
$
|
68
|
|
Derivative instruments, liabilities
|
|
|
|
|
|
|
|
||||||||
Commodity
(a)
|
$
|
—
|
|
|
$
|
60
|
|
|
$
|
—
|
|
|
$
|
60
|
|
Derivative instruments, liabilities
|
$
|
—
|
|
|
$
|
60
|
|
|
$
|
—
|
|
|
$
|
60
|
|
(a)
|
Derivative instruments are recorded on a net basis in our balance sheet. See Note
14
.
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||||
|
Fair
|
|
Carrying
|
|
Fair
|
|
Carrying
|
||||||||
(In millions)
|
Value
|
|
Amount
|
|
Value
|
|
Amount
|
||||||||
Financial assets
|
|
|
|
|
|
|
|
||||||||
Current assets (a)
|
$
|
753
|
|
|
$
|
753
|
|
|
$
|
7
|
|
|
$
|
7
|
|
Other noncurrent assets
|
104
|
|
|
107
|
|
|
105
|
|
|
108
|
|
||||
Total financial assets
|
$
|
857
|
|
|
$
|
860
|
|
|
$
|
112
|
|
|
$
|
115
|
|
Financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other current liabilities
|
$
|
43
|
|
|
$
|
54
|
|
|
$
|
68
|
|
|
$
|
75
|
|
Long-term debt, including current portion (b)
|
7,451
|
|
|
7,293
|
|
|
7,449
|
|
|
7,292
|
|
||||
Deferred credits and other liabilities
|
110
|
|
|
103
|
|
|
114
|
|
|
107
|
|
||||
Total financial liabilities
|
$
|
7,604
|
|
|
$
|
7,450
|
|
|
$
|
7,631
|
|
|
$
|
7,474
|
|
|
June 30, 2017
|
|
|
||||||||||
(In millions)
|
Asset
|
|
Liability
|
|
Net Asset
|
|
Balance Sheet Location
|
||||||
Fair Value Hedges
|
|
|
|
|
|
|
|
||||||
Interest rate
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
Other current assets
|
Total Designated Hedges
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Not Designated as Hedges
|
|
|
|
|
|
|
|
||||||
Interest rate
|
$
|
53
|
|
|
$
|
—
|
|
|
$
|
53
|
|
|
Other current assets
|
Commodity
|
57
|
|
|
—
|
|
|
57
|
|
|
Other current assets
|
|||
Commodity
|
3
|
|
|
—
|
|
|
3
|
|
|
Other noncurrent assets
|
|||
Total Not Designated as Hedges
|
$
|
113
|
|
|
$
|
—
|
|
|
$
|
113
|
|
|
|
Total
|
$
|
114
|
|
|
$
|
—
|
|
|
$
|
114
|
|
|
|
|
December 31, 2016
|
|
|
||||||||||
(In millions)
|
Asset
|
|
Liability
|
|
Net Asset
|
|
Balance Sheet Location
|
||||||
Fair Value Hedges
|
|
|
|
|
|
|
|
||||||
Interest rate
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
Other current assets
|
Interest rate
|
1
|
|
|
—
|
|
|
1
|
|
|
Other noncurrent assets
|
|||
Cash Flow Hedges
|
|
|
|
|
|
|
|
||||||
Interest rate
|
$
|
64
|
|
|
$
|
—
|
|
|
$
|
64
|
|
|
Other noncurrent assets
|
Total Designated Hedges
|
$
|
68
|
|
|
$
|
—
|
|
|
$
|
68
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Not Designated as Hedges
|
|
|
|
|
|
|
|
||||||
Commodity
|
$
|
—
|
|
|
$
|
60
|
|
|
$
|
(60
|
)
|
|
Other current liabilities
|
Total Not Designated as Hedges
|
$
|
—
|
|
|
$
|
60
|
|
|
$
|
(60
|
)
|
|
|
Total
|
$
|
68
|
|
|
$
|
60
|
|
|
$
|
8
|
|
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||
|
Aggregate Notional Amount
|
Weighted Average, LIBOR
|
|
Aggregate Notional Amount
|
Weighted Average, LIBOR
|
||||||
Maturity Dates
|
(in millions)
|
Floating Rate
|
|
(in millions)
|
Floating Rate
|
||||||
October 1, 2017
|
$
|
600
|
|
5.54
|
%
|
|
$
|
600
|
|
5.10
|
%
|
March 15, 2018
|
$
|
300
|
|
5.49
|
%
|
|
$
|
300
|
|
5.04
|
%
|
|
June 30, 2017
|
|
December 31, 2016
|
||
|
Aggregate Notional Amount
|
Weighted Average, LIBOR
|
|
Aggregate Notional Amount
|
Weighted Average, LIBOR
|
Maturity Dates
|
(in millions)
|
Fixed Rate
|
|
(in millions)
|
Fixed Rate
|
March 15, 2018
|
$750
|
1.57%
|
|
$750
|
1.57%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(In millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Interest Rate Swaps
|
|
|
|
|
|
|
|
||||||||
Beginning balance
|
$
|
61
|
|
|
$
|
—
|
|
|
$
|
60
|
|
|
$
|
—
|
|
Change in fair value recognized in other comprehensive income
|
(14
|
)
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
||||
Reclassification from other comprehensive income
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
||||
Ending balance
|
$
|
46
|
|
|
$
|
—
|
|
|
$
|
46
|
|
|
$
|
—
|
|
Crude Oil
|
||||
|
2017
|
2018
|
||
|
Third Quarter
|
Fourth Quarter
|
First Quarter
|
Second Quarter
|
Three-Way Collars
(a)
|
|
|
|
|
Volume (Bbls/day)
|
50,000
|
50,000
|
20,000
|
20,000
|
Weighted average price per Bbl:
|
|
|
|
|
Ceiling
|
$60.37
|
$60.37
|
$57.86
|
$57.86
|
Floor
|
$54.80
|
$54.80
|
$53.00
|
$53.00
|
Sold put
|
$47.80
|
$47.80
|
$47.00
|
$47.00
|
Sold call options
(b)
|
|
|
|
|
Volume (Bbls/day)
|
35,000
|
35,000
|
—
|
—
|
Weighted average price per Bbl
|
$61.91
|
$61.91
|
—
|
—
|
(a)
|
Subsequent to June 30, 2017, we entered into
20,000
Bbls/day of three-way collars for January - December 2018 with an average ceiling price of
$55.09
, a floor price of
$50.00
, and a sold put price of
$43.00
.
|
(b)
|
Call options settle monthly.
|
Natural Gas
|
||||||
|
2017
|
2018
|
||||
|
Third Quarter
|
Fourth Quarter
|
First Quarter
|
Second Quarter
|
Third Quarter
|
Fourth Quarter
|
Three-Way Collars
|
|
|
|
|
|
|
Volume (MMBtu/day)
|
120,000
|
120,000
|
200,000
|
160,000
|
160,000
|
160,000
|
Weighted average price per MMBtu:
|
|
|
|
|
|
|
Ceiling
|
$3.58
|
$3.71
|
$3.79
|
$3.61
|
$3.61
|
$3.61
|
Floor
|
$3.09
|
$3.14
|
$3.08
|
$3.00
|
$3.00
|
$3.00
|
Sold put
|
$2.55
|
$2.60
|
$2.55
|
$2.50
|
$2.50
|
$2.50
|
Swaps
|
|
|
|
|
|
|
Volume (MMBtu/day)
|
20,000
|
20,000
|
—
|
—
|
—
|
—
|
Weighted average price per MMBtu
|
$2.93
|
$2.93
|
—
|
—
|
—
|
—
|
|
Stock Options
|
|
Restricted Stock Awards & Units
|
||||||||||
|
Number of
Shares
|
|
Weighted
Average
Exercise Price
|
|
Awards
|
|
Weighted
Average Grant
Date Fair Value
|
||||||
Outstanding at December 31, 2016
|
11,915,533
|
|
|
|
$27.71
|
|
|
6,933,533
|
|
|
|
$14.44
|
|
Granted
|
799,591
|
|
(a)
|
|
$15.80
|
|
|
3,908,344
|
|
|
|
$16.37
|
|
Options Exercised/Stock Vested
|
(8,666
|
)
|
|
|
$7.22
|
|
|
(2,237,657
|
)
|
|
|
$17.61
|
|
Canceled
|
(2,009,085
|
)
|
|
|
$35.48
|
|
|
(529,721
|
)
|
|
|
$15.84
|
|
Outstanding at June 30, 2017
|
10,697,373
|
|
|
|
$25.37
|
|
|
8,074,499
|
|
|
|
$14.40
|
|
•
|
$682 million
6.0%
Notes Due in 2017
|
•
|
$854 million
5.9%
Notes Due in 2018
|
•
|
$228 million
7.5%
Notes Due in 2019
|
|
Six Months Ended June 30,
|
||||||
(In millions)
|
2017
|
|
2016
|
||||
Net cash (used in) operating activities:
|
|
|
|
||||
Interest paid (net of amounts capitalized)
|
$
|
(193
|
)
|
|
$
|
(177
|
)
|
Income taxes paid to taxing authorities
|
(43
|
)
|
|
(61
|
)
|
||
Noncash investing activities, related to continuing operations:
|
|
|
|
|
|
||
Asset retirement cost increase
|
$
|
12
|
|
|
$
|
2
|
|
Asset retirement obligations assumed by buyer
|
2
|
|
|
83
|
|
||
Increase in capital expenditure accrual
|
183
|
|
|
—
|
|
||
Notes receivable for disposal of assets
|
742
|
|
|
—
|
|
•
|
At the end of the second quarter 2017, we had
$5.9 billion
of liquidity, comprised of
$2.6 billion
in cash and an undrawn
$3.3 billion
revolving credit facility.
|
•
|
In July 2017 we expanded the capacity of the revolving credit facility from $3.3 billion to $3.4 billion, and in June 2017 we extended the maturity date one year to 2021.
|
•
|
In July 2017, we issued $1 billion of 4.4% senior notes due in 2027. Net proceeds plus existing cash on hand will be used in the third quarter to redeem approximately $1.8 billion of 6% senior notes due in 2017, 5.9% senior notes due in 2018 and 7.5% senior notes due in 2019. The offering and redemption will reduce total gross debt by approximately $750 million.
|
•
|
Closed on the sale of our Canadian business for approximately
$2.5 billion
with over $1.8 billion in proceeds received to date and $750 million to be received in first quarter 2018.
|
•
|
Closed on the Permian basin acquisitions for approximately
$1.8 billion
with cash on hand.
|
•
|
Net sales volumes from continuing operations are 357 mboed, which is
4%
higher compared to the same quarter last year; this includes a 7% increase to 202 mboed sales volumes in the U.S. resource plays in our
United States E&P
segment.
|
•
|
Cash provided by operating activities from continuing operations of $
923 million
for the
first six months
of 2017, is primarily a result of our average crude oil and condensate price realizations of $47.46 per bbl in the first half of 2017.
|
•
|
Our net loss per share from continuing operations was
$0.18
in the
second quarter
of
2017
as compared to a net loss per share of
$0.16
in the same period last year. Included in the second quarter 2017 and comparable period net loss are:
|
◦
|
An increase in sales and other operating revenues of approximately 40% to
$958 million
, including a commodity derivative net gain of
$56 million
compared to a net loss of
$88 million
in the comparable quarter.
|
◦
|
Production expense decreased
5%
while sales volumes increased in second quarter 2017 compared to the same quarter last year.
|
◦
|
Our provision for income taxes was $
41 million
in the second quarter of 2017 compared to a benefit of $
54 million
|
◦
|
Exploration expenses decreased primarily as a result of our decision in 2016 not to drill any of our remaining undeveloped Gulf of Mexico leases.
|
◦
|
Second quarter 2016 includes a net gain on sale of $
294 million
primarily relating to the sale of our Wyoming upstream and midstream non-core assets.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
Net Sales Volumes
|
2017
|
|
2016
|
|
Increase (Decrease)
|
|
2017
|
|
2016
|
|
Increase
(Decrease) |
United States E&P
(mboed)
|
222
|
|
224
|
|
(1)%
|
|
215
|
|
232
|
|
(7)%
|
International E&P
(mboed)
|
135
|
|
120
|
|
13%
|
|
131
|
|
108
|
|
21%
|
Total Continuing Operations
(mboed)
|
357
|
|
344
|
|
4%
|
|
346
|
|
340
|
|
2%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
Net Sales Volumes (a)
|
2017
|
|
2016
|
|
Increase (Decrease)
|
|
2017
|
|
2016
|
|
Increase
(Decrease) |
Equivalent Barrels
(mboed)
|
|
|
|
|
|
|
|
|
|
|
|
Oklahoma Resource Basins
|
49
|
|
27
|
|
81%
|
|
46
|
|
27
|
|
70%
|
Eagle Ford
|
100
|
|
109
|
|
(8)%
|
|
100
|
|
114
|
|
(12)%
|
Bakken
|
49
|
|
53
|
|
(8)%
|
|
48
|
|
55
|
|
(13)%
|
Northern Delaware
|
4
|
|
—
|
|
100%
|
|
2
|
|
—
|
|
100%
|
Other United States
(b)
|
20
|
|
35
|
|
(43)%
|
|
19
|
|
36
|
|
(47)%
|
Total United States E&P
|
222
|
|
224
|
|
(1)%
|
|
215
|
|
232
|
|
(7)%
|
(a)
|
Our U.S. Resource plays consists of the Oklahoma Resource Basins, Eagle Ford, Bakken and Northern Delaware.
|
|
|
Three Months Ended June 30, 2017
|
||||||||
Sales Mix - U.S. Resource Plays
|
|
Oklahoma Resource Basins
|
|
Eagle Ford
|
|
Bakken
|
|
Northern Delaware
|
|
Total
|
Crude oil and condensate
|
|
29%
|
|
59%
|
|
80%
|
|
56%
|
|
56%
|
Natural gas liquids
|
|
24%
|
|
20%
|
|
12%
|
|
16%
|
|
19%
|
Natural gas
|
|
47%
|
|
21%
|
|
8%
|
|
28%
|
|
25%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Gross Operated - U.S. Resource Plays
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oklahoma Resource Basins:
|
|
|
|
|
|
|
|
Wells drilled to total depth
|
23
|
|
6
|
|
38
|
|
11
|
Wells brought to sales
|
20
|
|
5
|
|
32
|
|
8
|
Eagle Ford:
|
|
|
|
|
|
|
|
Wells drilled to total depth
|
53
|
|
40
|
|
98
|
|
98
|
Wells brought to sales
|
41
|
|
30
|
|
88
|
|
80
|
Bakken:
|
|
|
|
|
|
|
|
Wells drilled to total depth
|
33
|
|
—
|
|
45
|
|
3
|
Wells brought to sales
|
2
|
|
4
|
|
6
|
|
10
|
Northern Delaware
|
|
|
|
|
|
|
|
Wells drilled to total depth
|
2
|
|
—
|
|
2
|
|
—
|
Wells brought to sales
(a)
|
2
|
|
—
|
|
2
|
|
—
|
•
|
Oklahoma Resource Basins
– Our net sales volumes in the second quarter increased by more than 80% from the year ago quarter, with net sales volumes of 49 mboed in
second quarter
2017. Our second STACK infill spacing pilot, the Hansens pad located in the normally pressured Meramec black oil window east of the Yost pad, tested a tighter well spacing design. Additionally, we also continued delineation and leasehold activity with strong results.
|
•
|
Eagle Ford
– Our net sales volumes were 100 mboed in the
second quarter
2017 which was 8% lower compared to the prior year quarter. We brought 41 gross operated wells to sales in the second quarter compared to 30 in the second quarter 2016. A new Company record was set again for the fastest operated well drilled in the Eagle Ford at a rate of more than 4,200 feet per day.
|
•
|
Bakken
– Our net sales volumes were 49 mboed compared to 53 mboed in the prior year quarter. In second quarter 2017 we brought two gross operated wells to sales in the Hector with enhanced completion designs.
|
•
|
Northern Delaware
– Our net sales volumes were 4 net mboed in second quarter 2017, reflecting the May 1 closing of BC Operating assets and June 1 closing of Black Mountain assets. During second quarter 2017 we brought online our first well with a company designed completion in Northern Delaware with successful results, pushing delineation west in Eddy County.
|
•
|
Other United States
– Net sales volumes declined in
second quarter
2017 primarily due to the disposition of Wyoming and certain non-operated assets in West Texas and New Mexico in 2016. See Note
6
to the consolidated financial statements for information about dispositions. This decrease was partially offset by the Gunflint field located in Mississippi Canyon block 948 in the Gulf of Mexico which began production in the second half of 2016.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
Net Sales Volumes
|
2017
|
|
2016
|
|
Increase (Decrease)
|
|
2017
|
|
2016
|
|
Increase
(Decrease) |
Equivalent Barrels
(mboed)
|
|
|
|
|
|
|
|
|
|
|
|
Equatorial Guinea
|
105
|
|
101
|
|
4%
|
|
104
|
|
93
|
|
12%
|
United Kingdom
(a)
|
18
|
|
19
|
|
(5)%
|
|
14
|
|
15
|
|
(7)%
|
Libya
|
11
|
|
—
|
|
100%
|
|
12
|
|
—
|
|
100%
|
Other International
|
1
|
|
—
|
|
100%
|
|
1
|
|
—
|
|
100%
|
Total International E&P
|
135
|
|
120
|
|
13%
|
|
131
|
|
108
|
|
21%
|
Equity Method Investees
|
|
|
|
|
|
|
|
|
|
|
|
LNG
(mtd)
|
6,243
|
|
5,797
|
|
8%
|
|
6,195
|
|
5,060
|
|
22%
|
Methanol
(mtd)
|
1,182
|
|
1,303
|
|
(9)%
|
|
1,244
|
|
1,292
|
|
(4)%
|
Condensate & LPG
(boed)
|
11,608
|
|
11,306
|
|
3%
|
|
13,069
|
|
10,757
|
|
21%
|
(a)
|
Includes natural gas acquired for injection and subsequent resale.
|
•
|
Equatorial Guinea
–
Second quarter
2017 net sales were higher compared to the same quarter in 2016 as a result of the completion and start-up of our Alba field compression project in mid-2016.
|
•
|
United Kingdom
– Net sales volumes in the
first six months
of 2017 were marginally lower compared to the first six months of 2016 as a result of reliability issues at the outside-operated Foinaven Field.
|
•
|
Libya
– Our Libya operations have been interrupted in recent years due to civil unrest. In late 2016, liftings resumed from the Es Sider crude oil terminal. Sales volumes and production continued without interruption during second quarter 2017.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
2017
|
|
2016
|
|
Increase (Decrease)
|
|
2017
|
|
2016
|
|
Increase (Decrease)
|
Average Price Realizations
(a)
|
|
|
|
|
|
|
|
|
|
|
|
Crude Oil and Condensate
(per bbl)
(b)
|
$45.81
|
|
$40.77
|
|
12%
|
|
$47.09
|
|
$34.21
|
|
38%
|
Natural Gas Liquids
(per bbl)
|
17.61
|
|
14.84
|
|
19%
|
|
18.46
|
|
11.43
|
|
62%
|
Total Liquid Hydrocarbons
(per bbl)
|
39.00
|
|
35.07
|
|
11%
|
|
40.04
|
|
29.32
|
|
37%
|
Natural Gas
(per mcf)
(c)
|
3.05
|
|
1.96
|
|
56%
|
|
3.03
|
|
1.99
|
|
52%
|
Benchmarks
|
|
|
|
|
|
|
|
|
|
|
|
WTI crude oil
(per bbl)
|
$48.15
|
|
$45.64
|
|
5%
|
|
$49.95
|
|
$39.78
|
|
26%
|
LLS crude oil
(per bbl)
|
50.18
|
|
47.35
|
|
6%
|
|
51.77
|
|
41.49
|
|
25%
|
Mont Belvieu NGLs
(per bbl)
(d)
|
20.99
|
|
17.52
|
|
20%
|
|
21.95
|
|
15.78
|
|
39%
|
Henry Hub natural gas
(per mmbtu)
|
3.18
|
|
1.95
|
|
63%
|
|
3.25
|
|
2.02
|
|
61%
|
(a)
|
Excludes gains or losses on commodity derivative instruments.
|
(b)
|
Inclusion of realized gains on crude oil derivative instruments would have increased liquid hydrocarbons average price realizations by
$1.07
per bbl and
$0.12
per bbl for the
second quarter
2017
and
2016
, and
$0.72
per bbl and
$0.91
per bbl for the
first six months
of
2017
and
2016
.
|
(c)
|
Inclusion of realized gains (losses) on natural gas derivative instruments would have a minimal impact on average price realizations for the periods presented.
|
(d)
|
Bloomberg Finance LLP: Y-grade Mix NGL of 50% ethane, 25% propane, 10% butane, 5% isobutane and 10% natural gasoline.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
2017
|
|
2016
|
|
Increase (Decrease)
|
|
2017
|
|
2016
|
|
Increase
(Decrease) |
Average Price Realizations
|
|
|
|
|
|
|
|
|
|
|
|
Crude Oil and Condensate (
per bbl
)
|
$47.04
|
|
$42.21
|
|
11%
|
|
$48.58
|
|
$37.56
|
|
29%
|
Natural Gas Liquids (
per bbl
)
|
1.77
|
|
2.65
|
|
(33)%
|
|
2.83
|
|
2.45
|
|
16%
|
Liquid Hydrocarbons (
per bbl
)
|
37.11
|
|
32.11
|
|
16%
|
|
37.83
|
|
28.11
|
|
35%
|
Natural Gas (
per mcf
)
|
0.57
|
|
0.53
|
|
8%
|
|
0.56
|
|
0.56
|
|
—%
|
Benchmark
|
|
|
|
|
|
|
|
|
|
|
|
Brent (Europe) crude oil (
per bbl
)
(a)
|
$49.67
|
|
$45.52
|
|
9%
|
|
$51.68
|
|
$39.61
|
|
30%
|
(a)
|
Average of monthly prices obtained from EIA website.
|
|
Three Months Ended June 30,
|
||||||
(In millions)
|
2017
|
|
2016
|
||||
Sales and other operating revenues, including related party
|
|
|
|
||||
United States E&P
|
$
|
695
|
|
|
$
|
617
|
|
International E&P
|
220
|
|
|
159
|
|
||
Segment sales and other operating revenues, including related party
|
$
|
915
|
|
|
$
|
776
|
|
Unrealized gain (loss) on commodity derivative instruments
|
43
|
|
|
(91
|
)
|
||
Sales and other operating revenues, including related party
|
$
|
958
|
|
|
$
|
685
|
|
(a)
|
Three months ended
June 30, 2017
includes a net sales volume reduction from
June 30, 2016
of
21
mboed primarily consisting of the disposition of Wyoming and certain non-operated assets in West Texas and New Mexico in 2016. See Note 6 to the consolidated financial statements for further information.
|
|
Three Months Ended June 30,
|
||||||
($ per boe)
|
2017
|
|
2016
|
||||
Production Expense Rate
|
|
|
|
||||
United States E&P
|
|
$5.86
|
|
|
|
$6.28
|
|
International E&P
|
|
$4.68
|
|
|
|
$5.09
|
|
|
Three Months Ended June 30,
|
||||||
(In millions)
|
2017
|
|
2016
|
||||
Exploration Expenses
|
|
|
|
||||
Unproved property impairments
|
$
|
25
|
|
|
$
|
133
|
|
Dry well costs
|
—
|
|
|
15
|
|
||
Geological and geophysical
|
—
|
|
|
—
|
|
||
Other
|
5
|
|
|
34
|
|
||
Total exploration expenses
|
$
|
30
|
|
|
$
|
182
|
|
|
Three Months Ended June 30,
|
||||||
(In millions)
|
2017
|
|
2016
|
||||
Production and severance
|
$
|
23
|
|
|
$
|
25
|
|
Ad valorem
|
1
|
|
|
5
|
|
||
Other
|
21
|
|
|
5
|
|
||
Total
|
$
|
45
|
|
|
$
|
35
|
|
|
Three Months Ended June 30,
|
||||||
(In millions)
|
2017
|
|
2016
|
||||
United States E&P
|
$
|
(107
|
)
|
|
$
|
(70
|
)
|
International E&P
|
59
|
|
|
55
|
|
||
Segment income (loss)
|
(48
|
)
|
|
(15
|
)
|
||
Items not allocated to segments, net of income taxes
|
(105
|
)
|
|
(123
|
)
|
||
Income (loss) from continuing operations
|
(153
|
)
|
|
(138
|
)
|
||
Income (loss) from discontinued operations
(a)
|
14
|
|
|
(32
|
)
|
||
Net income (loss)
|
$
|
(139
|
)
|
|
$
|
(170
|
)
|
|
Six Months Ended June 30,
|
||||||
(In millions)
|
2017
|
|
2016
|
||||
Sales and other operating revenues, including related party
|
|
|
|
||||
United States E&P
|
$
|
1,369
|
|
|
$
|
1,110
|
|
International E&P
|
423
|
|
|
255
|
|
||
Segment sales and other operating revenues, including related party
|
$
|
1,792
|
|
|
$
|
1,365
|
|
Unrealized gain (loss) on commodity derivative instruments
|
120
|
|
|
(114
|
)
|
||
Sales and other operating revenues, including related party
|
$
|
1,912
|
|
|
$
|
1,251
|
|
|
|
Six Months Ended
|
|
Increase (Decrease) Related to
|
|
Six Months Ended
|
||||||||||
(In millions)
|
|
June 30, 2016
|
|
Price Realizations
|
|
Net Sales Volumes
|
|
June 30, 2017
|
||||||||
United States E&P Price-Volume Analysis
(a)
|
||||||||||||||||
Liquid hydrocarbons
|
|
$
|
960
|
|
|
$
|
313
|
|
|
$
|
(101
|
)
|
|
$
|
1,172
|
|
Natural gas
|
|
113
|
|
|
61
|
|
|
3
|
|
|
177
|
|
||||
Realized gain on commodity
|
|
|
|
|
|
|
|
|
||||||||
derivative instruments
|
|
24
|
|
|
|
|
|
|
|
17
|
|
|||||
Other sales
|
|
13
|
|
|
|
|
|
|
3
|
|
||||||
Total
|
|
$
|
1,110
|
|
|
|
|
|
|
$
|
1,369
|
|
||||
International E&P Price-Volume Analysis
|
||||||||||||||||
Liquid hydrocarbons
|
|
$
|
194
|
|
|
$
|
92
|
|
|
$
|
73
|
|
|
$
|
359
|
|
Natural gas
|
|
43
|
|
|
—
|
|
|
5
|
|
|
48
|
|
||||
Other sales
|
|
18
|
|
|
|
|
|
|
16
|
|
||||||
Total
|
|
$
|
255
|
|
|
|
|
|
|
$
|
423
|
|
|
Six Months Ended June 30,
|
||||||
($ per boe)
|
2017
|
|
2016
|
||||
Production Expense Rate
|
|
|
|
||||
United States E&P
|
|
$5.82
|
|
|
|
$6.22
|
|
International E&P
|
|
$4.22
|
|
|
|
$5.53
|
|
|
Six Months Ended June 30,
|
||||||
(In millions)
|
2017
|
|
2016
|
||||
Exploration Expenses
|
|
|
|
||||
Unproved property impairments
|
$
|
45
|
|
|
$
|
144
|
|
Dry well costs
|
—
|
|
|
15
|
|
||
Geological and geophysical
|
1
|
|
|
—
|
|
||
Other
|
12
|
|
|
47
|
|
||
Total exploration expenses
|
$
|
58
|
|
|
$
|
206
|
|
|
Six Months Ended June 30,
|
||||||
(In millions)
|
2017
|
|
2016
|
||||
Production and severance
|
$
|
48
|
|
|
$
|
44
|
|
Ad valorem
|
4
|
|
|
19
|
|
||
Other
|
32
|
|
|
15
|
|
||
Total
|
$
|
84
|
|
|
$
|
78
|
|
|
Six Months Ended June 30,
|
||||||
(In millions)
|
2017
|
|
2016
|
||||
United States E&P
|
$
|
(186
|
)
|
|
$
|
(265
|
)
|
International E&P
|
152
|
|
|
59
|
|
||
Segment income (loss)
|
(34
|
)
|
|
(206
|
)
|
||
Items not allocated to segments, net of income taxes
|
(169
|
)
|
|
(292
|
)
|
||
Income (loss) from continuing operations
|
(203
|
)
|
|
(498
|
)
|
||
Income (loss) from discontinued operations
(a)
|
(4,893
|
)
|
|
(79
|
)
|
||
Net income (loss)
|
$
|
(5,096
|
)
|
|
$
|
(577
|
)
|
|
Six Months Ended June 30,
|
||||||
(In millions)
|
2017
|
|
2016
|
||||
Sources of cash and cash equivalents
|
|
|
|
|
|
||
Operating activities - continuing operations
|
$
|
923
|
|
|
$
|
267
|
|
Disposals of assets
|
1,726
|
|
|
758
|
|
||
Common stock issuance
|
—
|
|
|
1,236
|
|
||
Other
|
49
|
|
|
39
|
|
||
Total sources of cash and cash equivalents
|
$
|
2,698
|
|
|
$
|
2,300
|
|
Uses of cash and cash equivalents
|
|
|
|
||||
Cash additions to property, plant and equipment
|
$
|
(775
|
)
|
|
$
|
(728
|
)
|
Acquisitions, net of cash acquired
|
(1,828
|
)
|
|
—
|
|
||
Deposits for acquisitions
|
—
|
|
|
(89
|
)
|
||
Dividends paid
|
(85
|
)
|
|
(77
|
)
|
||
Purchases of common stock
|
(10
|
)
|
|
(4
|
)
|
||
Other
|
(6
|
)
|
|
—
|
|
||
Total uses of cash and cash equivalents
|
$
|
(2,704
|
)
|
|
$
|
(898
|
)
|
|
Six Months Ended June 30,
|
||||||
(In millions)
|
2017
|
|
2016
|
||||
United States E&P
|
$
|
924
|
|
|
$
|
468
|
|
International E&P
|
23
|
|
|
44
|
|
||
Corporate
|
11
|
|
|
8
|
|
||
Total capital expenditures
|
958
|
|
|
520
|
|
||
Decrease (increase) in capital expenditure accrual
|
(183
|
)
|
|
208
|
|
||
Total use of cash and cash equivalents for property, plant and equipment
|
$
|
775
|
|
|
$
|
728
|
|
•
|
$682 million 6.0% Notes Due in 2017
|
•
|
$854 million 5.9% Notes Due in 2018
|
•
|
$228 million 7.5% Notes Due in 2019
|
|
June 30,
|
|
December 31,
|
||||
(In millions)
|
2017
|
|
2016
|
||||
Long-term debt due within one year
|
$
|
548
|
|
|
$
|
686
|
|
Long-term debt
|
6,715
|
|
|
6,581
|
|
||
Total debt
|
$
|
7,263
|
|
|
$
|
7,267
|
|
Cash and cash equivalents
|
$
|
2,614
|
|
|
$
|
2,488
|
|
Equity
|
$
|
12,405
|
|
|
$
|
17,541
|
|
Calculation:
|
|
|
|
|
|
||
Total debt
|
$
|
7,263
|
|
|
$
|
7,267
|
|
Minus cash and cash equivalents
|
2,614
|
|
|
2,488
|
|
||
Total debt minus cash, cash equivalents
|
$
|
4,649
|
|
|
$
|
4,779
|
|
Total debt
|
$
|
7,263
|
|
|
$
|
7,267
|
|
Plus equity
|
12,405
|
|
|
17,541
|
|
||
Minus cash and cash equivalents
|
2,614
|
|
|
2,488
|
|
||
Total debt plus equity minus cash, cash equivalents
|
$
|
17,054
|
|
|
$
|
22,320
|
|
Cash-adjusted debt-to-capital ratio
|
27
|
%
|
|
21
|
%
|
•
|
conditions in the oil and gas industry, including supply and 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 and economic conditions in the jurisdictions in which we operate, including changes in foreign currency exchange rates, interest rates, inflation rates, and global and domestic market conditions;
|
•
|
risks related to our hedging activities;
|
•
|
capital available for exploration and development;
|
•
|
the inability of any party to satisfy closing conditions with respect to our asset disposition;
|
•
|
drilling and operating risks;
|
•
|
well production timing;
|
•
|
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, acts of war or terrorist acts and the governmental or military response thereto;
|
•
|
cyber-attacks;
|
•
|
changes in safety, health, environmental, tax and other regulations;
|
•
|
other geological, operating and economic considerations; and
|
•
|
the risk factors, forward-looking statements and challenges and uncertainties described in our 2016 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other filings with the SEC.
|
Crude Oil
|
||||
|
2017
|
2018
|
||
|
Third Quarter
|
Fourth Quarter
|
First Quarter
|
Second Quarter
|
Three-Way Collars
(a)
|
|
|
|
|
Volume (Bbls/day)
|
50,000
|
50,000
|
20,000
|
20,000
|
Weighted average price per Bbl:
|
|
|
|
|
Ceiling
|
$60.37
|
$60.37
|
$57.86
|
$57.86
|
Floor
|
$54.80
|
$54.80
|
$53.00
|
$53.00
|
Sold put
|
$47.80
|
$47.80
|
$47.00
|
$47.00
|
Sold call options
(b)
|
|
|
|
|
Volume (Bbls/day)
|
35,000
|
35,000
|
—
|
—
|
Weighted average price per Bbl
|
$61.91
|
$61.91
|
—
|
—
|
(a)
|
Subsequent to June 30, 2017, we entered into
20,000
Bbls/day of three-way collars for January - December 2018 with an average ceiling price of $55.09, a floor price of
$50.00
, and a sold put price of
$43.00
.
|
(b)
|
Call options settle monthly.
|
Natural Gas
|
||||||
|
2017
|
2018
|
||||
|
Third Quarter
|
Fourth Quarter
|
First Quarter
|
Second Quarter
|
Third Quarter
|
Fourth Quarter
|
Three-Way Collars
|
|
|
|
|
|
|
Volume (MMBtu/day)
|
120,000
|
120,000
|
200,000
|
160,000
|
160,000
|
160,000
|
Weighted average price per MMBtu:
|
|
|
|
|
|
|
Ceiling
|
$3.58
|
$3.71
|
$3.79
|
$3.61
|
$3.61
|
$3.61
|
Floor
|
$3.09
|
$3.14
|
$3.08
|
$3.00
|
$3.00
|
$3.00
|
Sold put
|
$2.55
|
$2.60
|
$2.55
|
$2.50
|
$2.50
|
$2.50
|
Swaps
|
|
|
|
|
|
|
Volume (MMBtu/day)
|
20,000
|
20,000
|
—
|
—
|
—
|
—
|
Weighted average price per MMBtu
|
$2.93
|
$2.93
|
—
|
—
|
—
|
—
|
(In millions)
|
Hypothetical Price Increase of 10%
|
Hypothetical Price Decrease of 10%
|
||||
|
|
|
||||
Crude oil derivatives
|
$
|
(30
|
)
|
$
|
18
|
|
Natural gas derivatives
|
(15
|
)
|
13
|
|
||
Total
|
$
|
(45
|
)
|
$
|
31
|
|
(In millions)
|
Fair Value
|
|
Incremental Change in Fair Value
|
||||
Financial assets (liabilities):
(a)
|
|
|
|
||||
Interest rate fair value hedges
|
$
|
1
|
|
(b)
|
$
|
1
|
|
Interest rate swaps
|
$
|
53
|
|
(b)
|
$
|
(15
|
)
|
Long term debt, including amounts due within one year
|
$
|
(7,451
|
)
|
(b)(c)
|
$
|
(254
|
)
|
(a)
|
Fair value of cash and cash equivalents, receivables, accounts payable and accrued interest approximate carrying value and are relatively insensitive to changes in interest rates due to the short-term maturity of the instruments. Accordingly, these instruments are excluded from the table.
|
(b)
|
Fair value was based on market prices where available, or current borrowing rates for financings with similar terms and maturities.
|
(c)
|
Excludes capital leases.
|
Period
|
Total Number of
Shares
Purchased
(a)
|
|
Average
Price Paid
per Share
|
|
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs
(b)
|
|
Approximate
Dollar Value of
Shares that May
Yet Be Purchased
Under the Plans
or Programs
(b)
|
||||
04/01/17 - 04/30/17
|
66,785
|
|
|
$16.23
|
|
—
|
|
|
$
|
1,500,285,529
|
|
05/01/17 - 05/31/17
|
123,405
|
|
|
$14.83
|
|
—
|
|
|
$
|
1,500,285,529
|
|
06/01/17 - 06/30/17
|
493
|
|
|
$13.18
|
|
—
|
|
|
$
|
1,500,285,529
|
|
Total
|
190,683
|
|
|
$15.32
|
|
—
|
|
|
|
(a)
|
190,683
shares of restricted stock were delivered by employees to Marathon Oil, upon vesting, to satisfy tax withholding requirements.
|
(b)
|
In January 2006, we announced a $2.0 billion share repurchase program. Our Board of directors subsequently increased the authorization for repurchases under the program by $500 million in January 2007, by $500 million in May 2007, by $2.0 billion in July 2007, and by $1.2 billion in December 2013, for a total authorized amount of $6.2 billion. The remaining share repurchase authorization as of
June 30, 2017
is
$1.5 billion
. No repurchases were made under the program in the second quarter of 2017.
|
August 3, 2017
|
|
MARATHON OIL CORPORATION
|
|
|
|
|
By:
|
/s/ Gary E. Wilson
|
|
|
Gary E. Wilson
|
|
|
Vice President, Controller and Chief Accounting Officer
|
|
|
(Duly Authorized Officer)
|
|
|
|
Incorporated by Reference (File No. 001-05153, unless otherwise indicated)
|
|||||
Exhibit Number
|
|
Exhibit Description
|
Form
|
|
Exhibit
|
|
Filing Date
|
|
3.1
|
|
10-Q
|
|
3.1
|
|
8/8/2013
|
|
|
3.2
|
|
8-K
|
|
3.1
|
|
3/1/2016
|
|
|
3.3
|
|
10-K
|
|
3.3
|
|
2/28/2014
|
|
|
4.1
|
|
10-K
|
|
4.2
|
|
2/28/2014
|
|
|
10.1
|
|
8-K
|
|
99.1
|
|
6/23/2017
|
|
|
10.2*
|
|
Incremental Commitment Supplement, dated as of July 11, 2017, to the Amended and Restated Credit Agreement dated as of May 28, 2014, as amended by the First Amendment dated as of May 5, 2015, supplemented by the Incremental Commitments Supplement dated as of March 4, 2016, and amended by the Second Amendment dated as of June 22, 2017, among Marathon Oil Corporation, as borrower, the lenders party thereto, The Royal Bank of Scotland Plc, as syndication agent, Citibank, N.A., Morgan Stanley Senior Funding, Inc. and The Bank of Nova Scotia, as documentation agents, and JPMorgan Chase Bank, N.A., as administrative agent.
|
|
|
|
|
|
|
31.1*
|
|
Certification of President and Chief Executive Officer pursuant to Rule 13(a)-14 and 15(d)-14 under the Securities Exchange Act of 1934
|
|
|
|
|
|
|
31.2*
|
|
Certification of Executive Vice President and Chief Financial Officer pursuant to Rule 13(a)-14 and 15(d)-14 under the Securities Exchange Act of 1934
|
|
|
|
|
|
|
32.1*
|
|
Certification of President and Chief Executive Officer pursuant to 18 U.S.C. Section 1350
|
|
|
|
|
|
|
32.2*
|
|
Certification of Executive Vice President and Chief Financial Officer pursuant to 18 U.S.C. Section 1350
|
|
|
|
|
|
|
101.INS*
|
|
XBRL Instance Document
|
|
|
|
|
|
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema
|
|
|
|
|
|
|
101.CAL*
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
|
|
|
|
|
101.DEF*
|
|
XBRL Taxonomy Extension Definition Linkbase
|
|
|
|
|
|
|
101.LAB*
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
|
|
|
|
|
101.PRE*
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
|
|
|
|
|
*
|
|
Filed herewith.
|
|
|
|
|
|
|
MARATHON OIL CORPORATION,
|
|
|
|
|
|
by
|
/s/ Morris R. Clark
|
|
|
Name: Morris R. Clark
Title: Vice President and Treasurer
|
|
JPMORGAN CHASE BANK, N.A., as the Administrative Agent,
|
|
|
|
|
|
by
|
/s/ Debra Hrelja
|
|
|
Name: Debra Hrelja
Title: Vice President
|
|
Name of Increasing Lender:
|
CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH
|
|
|
|
by
|
/s/ Nupur Kumar
|
|
|
Name: Nupur Kumar
|
|
|
Title: Authorized Signatory
|
|
|
|
|
by
|
/s/ Lea Baerlocher
|
|
|
Name: Lea Baerlocher
|
|
|
Title: Authorized Signatory
|
|
1.
|
I have reviewed this report on Form 10-Q of Marathon Oil Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
August 3, 2017
|
|
/s/ Lee M. Tillman
|
|
|
|
Lee M. Tillman
|
|
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this report on Form 10-Q of Marathon Oil Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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August 3, 2017
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/s/ Dane E. Whitehead
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Dane E. Whitehead
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Executive Vice President and Chief Financial Officer
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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August 3, 2017
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/s/ Lee M. Tillman
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Lee M. Tillman
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President and Chief Executive Officer
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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August 3, 2017
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/s/ Dane E. Whitehead
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Dane E. Whitehead
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Executive Vice President and Chief Financial Officer
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