(Mark One)
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☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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|
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For the Quarterly Period Ended
|
June 30, 2019
|
|
☐
|
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
|
|
25-0996816
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
Title of each class
|
|
Trading Symbol
|
|
Name of each exchange on which registered
|
Common Stock, par value $1.00
|
|
MRO
|
|
New York Stock Exchange
|
|
Large accelerated filer
|
þ
|
Accelerated filer
|
o
|
Non-accelerated filer
|
o
|
|
||
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Smaller reporting company
|
☐
|
Emerging growth company
|
☐
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Table of Contents
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Page
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||
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||
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||
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Three Months Ended
|
|
Six Months Ended
|
||||||||||||
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June 30,
|
|
June 30,
|
||||||||||||
(In millions, except per share data)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenues and other income:
|
|
|
|
|
|
|
|
||||||||
Revenues from contracts with customers
|
$
|
1,381
|
|
|
$
|
1,447
|
|
|
$
|
2,581
|
|
|
$
|
2,984
|
|
Net gain (loss) on commodity derivatives
|
16
|
|
|
(152
|
)
|
|
(75
|
)
|
|
(254
|
)
|
||||
Income from equity method investments
|
31
|
|
|
60
|
|
|
42
|
|
|
97
|
|
||||
Net gain (loss) on disposal of assets
|
(8
|
)
|
|
50
|
|
|
34
|
|
|
307
|
|
||||
Other income
|
13
|
|
|
12
|
|
|
48
|
|
|
16
|
|
||||
Total revenues and other income
|
1,433
|
|
|
1,417
|
|
|
2,630
|
|
|
3,150
|
|
||||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|||||
Production
|
193
|
|
|
205
|
|
|
380
|
|
|
422
|
|
||||
Shipping, handling and other operating
|
170
|
|
|
126
|
|
|
324
|
|
|
256
|
|
||||
Exploration
|
26
|
|
|
65
|
|
|
85
|
|
|
117
|
|
||||
Depreciation, depletion and amortization
|
605
|
|
|
612
|
|
|
1,159
|
|
|
1,202
|
|
||||
Impairments
|
18
|
|
|
34
|
|
|
24
|
|
|
42
|
|
||||
Taxes other than income
|
79
|
|
|
65
|
|
|
151
|
|
|
129
|
|
||||
General and administrative
|
87
|
|
|
105
|
|
|
181
|
|
|
205
|
|
||||
Total costs and expenses
|
1,178
|
|
|
1,212
|
|
|
2,304
|
|
|
2,373
|
|
||||
Income from operations
|
255
|
|
|
205
|
|
|
326
|
|
|
777
|
|
||||
Net interest and other
|
(64
|
)
|
|
(65
|
)
|
|
(113
|
)
|
|
(110
|
)
|
||||
Other net periodic benefit costs
|
2
|
|
|
—
|
|
|
7
|
|
|
(3
|
)
|
||||
Income before income taxes
|
193
|
|
|
140
|
|
|
220
|
|
|
664
|
|
||||
Provision (benefit) for income taxes
|
32
|
|
|
44
|
|
|
(115
|
)
|
|
212
|
|
||||
Net income
|
$
|
161
|
|
|
$
|
96
|
|
|
$
|
335
|
|
|
$
|
452
|
|
Net income per share:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
$
|
0.20
|
|
|
$
|
0.11
|
|
|
$
|
0.41
|
|
|
$
|
0.53
|
|
Diluted
|
$
|
0.20
|
|
|
$
|
0.11
|
|
|
$
|
0.41
|
|
|
$
|
0.53
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
813
|
|
|
854
|
|
|
817
|
|
|
853
|
|
||||
Diluted
|
814
|
|
|
855
|
|
|
817
|
|
|
854
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income
|
$
|
161
|
|
|
$
|
96
|
|
|
$
|
335
|
|
|
$
|
452
|
|
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
|
|
|
|
|||||
Postretirement and postemployment plans:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Change in actuarial loss in postretirement and postemployment plans
|
(9
|
)
|
|
13
|
|
|
(13
|
)
|
|
17
|
|
||||
Postretirement and postemployment plans, net of tax
|
(9
|
)
|
|
13
|
|
|
(13
|
)
|
|
17
|
|
||||
Other, net of tax
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
||||
Other comprehensive income (loss)
|
(9
|
)
|
|
17
|
|
|
(13
|
)
|
|
21
|
|
||||
Comprehensive income
|
$
|
152
|
|
|
$
|
113
|
|
|
$
|
322
|
|
|
$
|
473
|
|
|
June 30,
|
|
December 31,
|
||||
(In millions, except par value and share amounts)
|
2019
|
|
2018
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
961
|
|
|
$
|
1,462
|
|
Receivables, less reserve of $12 and $11
|
1,144
|
|
|
1,079
|
|
||
Inventories
|
72
|
|
|
96
|
|
||
Other current assets
|
101
|
|
|
257
|
|
||
Current assets held for sale
|
410
|
|
|
27
|
|
||
Total current assets
|
2,688
|
|
|
2,921
|
|
||
Equity method investments
|
684
|
|
|
745
|
|
||
Property, plant and equipment, less accumulated depreciation, depletion and amortization of $17,260 and $21,830
|
16,730
|
|
|
16,804
|
|
||
Goodwill
|
95
|
|
|
97
|
|
||
Other noncurrent assets
|
420
|
|
|
723
|
|
||
Noncurrent assets held for sale
|
665
|
|
|
31
|
|
||
Total assets
|
$
|
21,282
|
|
|
$
|
21,321
|
|
Liabilities
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
1,401
|
|
|
$
|
1,320
|
|
Payroll and benefits payable
|
88
|
|
|
154
|
|
||
Accrued taxes
|
77
|
|
|
181
|
|
||
Other current liabilities
|
216
|
|
|
170
|
|
||
Long-term debt due within one year
|
600
|
|
|
—
|
|
||
Current liabilities held for sale
|
89
|
|
|
7
|
|
||
Total current liabilities
|
2,471
|
|
|
1,832
|
|
||
Long-term debt
|
4,902
|
|
|
5,499
|
|
||
Deferred tax liabilities
|
184
|
|
|
199
|
|
||
Defined benefit postretirement plan obligations
|
179
|
|
|
195
|
|
||
Asset retirement obligations
|
189
|
|
|
1,081
|
|
||
Deferred credits and other liabilities
|
292
|
|
|
279
|
|
||
Noncurrent liabilities held for sale
|
964
|
|
|
108
|
|
||
Total liabilities
|
9,181
|
|
|
9,193
|
|
||
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 (par value $1 per share, 1.925 billion shares authorized at June 30, 2019 and December 31, 2018)
|
937
|
|
|
937
|
|
||
Held in treasury, at cost – 133 million shares and 118 million shares
|
(3,984
|
)
|
|
(3,816
|
)
|
||
Additional paid-in capital
|
7,170
|
|
|
7,238
|
|
||
Retained earnings
|
7,928
|
|
|
7,706
|
|
||
Accumulated other comprehensive income
|
50
|
|
|
63
|
|
||
Total stockholders’ equity
|
12,101
|
|
|
12,128
|
|
||
Total liabilities and stockholders’ equity
|
$
|
21,282
|
|
|
$
|
21,321
|
|
|
Six Months Ended
|
||||||
|
June 30,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Increase (decrease) in cash and cash equivalents
|
|
|
|
||||
Operating activities:
|
|
|
|
|
|
||
Net income
|
$
|
335
|
|
|
$
|
452
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||
Depreciation, depletion and amortization
|
1,159
|
|
|
1,202
|
|
||
Impairments
|
24
|
|
|
42
|
|
||
Exploratory dry well costs and unproved property impairments
|
69
|
|
|
93
|
|
||
Net gain on disposal of assets
|
(34
|
)
|
|
(307
|
)
|
||
Deferred income taxes
|
(33
|
)
|
|
(6
|
)
|
||
Net loss on derivative instruments
|
75
|
|
|
254
|
|
||
Net settlements of derivative instruments
|
27
|
|
|
(166
|
)
|
||
Pension and other post retirement benefits, net
|
(41
|
)
|
|
(51
|
)
|
||
Stock-based compensation
|
32
|
|
|
28
|
|
||
Equity method investments, net
|
12
|
|
|
27
|
|
||
Changes in:
|
|
|
|
|
|||
Current receivables
|
(95
|
)
|
|
(256
|
)
|
||
Inventories
|
3
|
|
|
(17
|
)
|
||
Current accounts payable and accrued liabilities
|
(158
|
)
|
|
133
|
|
||
Other current assets and liabilities
|
119
|
|
|
(8
|
)
|
||
All other operating, net
|
(182
|
)
|
|
(4
|
)
|
||
Net cash provided by operating activities
|
1,312
|
|
|
1,416
|
|
||
Investing activities:
|
|
|
|
|
|
||
Additions to property, plant and equipment
|
(1,262
|
)
|
|
(1,300
|
)
|
||
Additions to other assets
|
42
|
|
|
(129
|
)
|
||
Acquisitions, net of cash acquired
|
—
|
|
|
(25
|
)
|
||
Disposal of assets, net of cash transferred to the buyer
|
69
|
|
|
1,183
|
|
||
Equity method investments - return of capital
|
49
|
|
|
32
|
|
||
All other investing, net
|
(27
|
)
|
|
7
|
|
||
Net cash used in investing activities
|
(1,129
|
)
|
|
(232
|
)
|
||
Financing activities:
|
|
|
|
|
|
||
Purchases of common stock
|
(266
|
)
|
|
(11
|
)
|
||
Dividends paid
|
(82
|
)
|
|
(85
|
)
|
||
All other financing, net
|
(2
|
)
|
|
18
|
|
||
Net cash used in financing activities
|
(350
|
)
|
|
(78
|
)
|
||
Effect of exchange rate on cash and cash equivalents
|
1
|
|
|
(2
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
(166
|
)
|
|
1,104
|
|
||
Cash and cash equivalents at beginning of period
|
1,462
|
|
|
563
|
|
||
Cash and cash equivalents at end of period
|
$
|
1,296
|
|
|
$
|
1,667
|
|
|
|
|
|
||||
Reconciliation of cash and cash equivalents
|
|
|
|
||||
Cash and cash equivalents
|
$
|
961
|
|
|
$
|
1,667
|
|
Cash and cash equivalents included in current assets held for sale
|
335
|
|
|
—
|
|
||
Total cash and cash equivalents
|
$
|
1,296
|
|
|
$
|
1,667
|
|
|
|
Total Equity of Marathon Oil Stockholders
|
||||||||||||||||||||||||||
(In millions)
|
|
Preferred
Stock
|
|
Common
Stock
|
|
Treasury
Stock
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Total
Equity
|
||||||||||||||
Six Months Ended June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
December 31, 2017 Balance
|
|
$
|
—
|
|
|
$
|
937
|
|
|
$
|
(3,325
|
)
|
|
$
|
7,379
|
|
|
$
|
6,779
|
|
|
$
|
(62
|
)
|
|
11,708
|
|
|
Shares issued - stock-based compensation
|
|
—
|
|
|
—
|
|
|
158
|
|
|
(93
|
)
|
|
—
|
|
|
—
|
|
|
65
|
|
|||||||
Shares repurchased
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|||||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(49
|
)
|
|
—
|
|
|
—
|
|
|
(49
|
)
|
|||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
356
|
|
|
—
|
|
|
356
|
|
|||||||
Other comprehensive income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
4
|
|
|||||||
Dividends paid (per share amount of $0.05)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(42
|
)
|
|
—
|
|
|
(42
|
)
|
|||||||
March 31, 2018 Balance
|
|
$
|
—
|
|
|
$
|
937
|
|
|
$
|
(3,175
|
)
|
|
$
|
7,237
|
|
|
$
|
7,093
|
|
|
$
|
(58
|
)
|
|
$
|
12,034
|
|
Shares issued - stock-based compensation
|
|
—
|
|
|
—
|
|
|
40
|
|
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
25
|
|
|||||||
Shares repurchased
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
96
|
|
|
—
|
|
|
96
|
|
|||||||
Other comprehensive income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|
17
|
|
|||||||
Dividends paid (per share amount of $0.05)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(43
|
)
|
|
—
|
|
|
(43
|
)
|
|||||||
June 30, 2018 Balance
|
|
$
|
—
|
|
|
$
|
937
|
|
|
$
|
(3,137
|
)
|
|
$
|
7,227
|
|
|
$
|
7,146
|
|
|
$
|
(41
|
)
|
|
$
|
12,132
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Six Months Ended June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
December 31, 2018 Balance
|
|
$
|
—
|
|
|
$
|
937
|
|
|
$
|
(3,816
|
)
|
|
$
|
7,238
|
|
|
$
|
7,706
|
|
|
$
|
63
|
|
|
12,128
|
|
|
Cumulative-effect adjustment (Note 2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(31
|
)
|
|
—
|
|
|
(31
|
)
|
|||||||
Shares issued - stock based compensation
|
|
—
|
|
|
—
|
|
|
101
|
|
|
(39
|
)
|
|
—
|
|
|
—
|
|
|
62
|
|
|||||||
Shares repurchased
|
|
—
|
|
|
—
|
|
|
(30
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(30
|
)
|
|||||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(50
|
)
|
|
—
|
|
|
—
|
|
|
(50
|
)
|
|||||||
Net income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
174
|
|
|
—
|
|
|
174
|
|
|||||||
Other comprehensive income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
(4
|
)
|
|||||||
Dividends paid (per share amount of $0.05)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(41
|
)
|
|
—
|
|
|
(41
|
)
|
|||||||
March 31, 2019 Balance
|
|
$
|
—
|
|
|
$
|
937
|
|
|
$
|
(3,745
|
)
|
|
$
|
7,149
|
|
|
$
|
7,808
|
|
|
$
|
59
|
|
|
$
|
12,208
|
|
Shares issued - stock-based compensation
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
5
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||||
Shares repurchased
|
|
—
|
|
|
—
|
|
|
(236
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(236
|
)
|
|||||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
161
|
|
|
—
|
|
|
161
|
|
|||||||
Other comprehensive income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
(9
|
)
|
|||||||
Dividends paid (per share amount of $0.05)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(41
|
)
|
|
—
|
|
|
(41
|
)
|
|||||||
June 30, 2019 Balance
|
|
$
|
—
|
|
|
$
|
937
|
|
|
$
|
(3,984
|
)
|
|
$
|
7,170
|
|
|
$
|
7,928
|
|
|
$
|
50
|
|
|
$
|
12,101
|
|
1.
|
Basis of Presentation
|
•
|
Implemented an accounting policy to not recognize any right-of-use assets and lease liabilities related to short-term leases on the balance sheet.
|
•
|
Implemented an accounting policy to not separate the lease and nonlease components for all asset classes, except for vessels.
|
•
|
Elected the package of practical expedients which allows us to not reassess our prior conclusions regarding the lease identification and lease classification for contracts that commenced or expired prior to the effective date.
|
•
|
Elected the practical expedient pertaining to land easements which allows us to continue accounting for existing agreements under the previous accounting policies as nonlease transactions. Any modifications of existing contracts or new agreements will be assessed under the new lease accounting guidance and may become leases in the future.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(In millions, except per share data)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income
|
$
|
161
|
|
|
$
|
96
|
|
|
$
|
335
|
|
|
$
|
452
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding
|
813
|
|
|
854
|
|
|
817
|
|
|
853
|
|
||||
Effect of dilutive securities
|
1
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Weighted average common shares, diluted
|
814
|
|
|
855
|
|
|
817
|
|
|
854
|
|
||||
Net income per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.20
|
|
|
$
|
0.11
|
|
|
$
|
0.41
|
|
|
$
|
0.53
|
|
Diluted
|
$
|
0.20
|
|
|
$
|
0.11
|
|
|
$
|
0.41
|
|
|
$
|
0.53
|
|
|
|
|
|
|
|
|
|
||||||||
Dividends per share
|
$
|
0.05
|
|
|
$
|
0.05
|
|
|
$
|
0.10
|
|
|
$
|
0.10
|
|
|
Three Months Ended June 30, 2019
|
||||||||||||||||||||||
(In millions)
|
Eagle Ford
|
|
Bakken
|
|
Oklahoma
|
|
Northern Delaware
|
|
Other U.S.
|
|
Total
|
||||||||||||
Crude oil and condensate
|
$
|
350
|
|
|
$
|
453
|
|
|
$
|
111
|
|
|
$
|
77
|
|
|
$
|
30
|
|
|
$
|
1,021
|
|
Natural gas liquids
|
30
|
|
|
15
|
|
|
31
|
|
|
7
|
|
|
1
|
|
|
84
|
|
||||||
Natural gas
|
32
|
|
|
6
|
|
|
36
|
|
|
1
|
|
|
4
|
|
|
79
|
|
||||||
Other
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
16
|
|
||||||
Revenues from contracts with customers
|
$
|
413
|
|
|
$
|
474
|
|
|
$
|
178
|
|
|
$
|
85
|
|
|
$
|
50
|
|
|
$
|
1,200
|
|
|
Three Months Ended June 30, 2018
|
||||||||||||||||||||||
(In millions)
|
Eagle Ford
|
|
Bakken
|
|
Oklahoma
|
|
Northern Delaware
|
|
Other U.S.
|
|
Total
|
||||||||||||
Crude oil and condensate
|
$
|
394
|
|
|
$
|
405
|
|
|
$
|
111
|
|
|
$
|
59
|
|
|
$
|
44
|
|
|
$
|
1,013
|
|
Natural gas liquids
|
45
|
|
|
17
|
|
|
45
|
|
|
6
|
|
|
2
|
|
|
115
|
|
||||||
Natural gas
|
33
|
|
|
8
|
|
|
38
|
|
|
2
|
|
|
5
|
|
|
86
|
|
||||||
Other
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
7
|
|
||||||
Revenues from contracts with customers
|
$
|
473
|
|
|
$
|
430
|
|
|
$
|
194
|
|
|
$
|
67
|
|
|
$
|
57
|
|
|
$
|
1,221
|
|
|
Six Months Ended June 30, 2019
|
||||||||||||||||||||||
(In millions)
|
Eagle Ford
|
|
Bakken
|
|
Oklahoma
|
|
Northern Delaware
|
|
Other U.S.
|
|
Total
|
||||||||||||
Crude oil and condensate
|
$
|
668
|
|
|
$
|
825
|
|
|
$
|
188
|
|
|
$
|
141
|
|
|
$
|
58
|
|
|
$
|
1,880
|
|
Natural gas liquids
|
65
|
|
|
25
|
|
|
53
|
|
|
15
|
|
|
3
|
|
|
161
|
|
||||||
Natural gas
|
66
|
|
|
18
|
|
|
81
|
|
|
7
|
|
|
10
|
|
|
182
|
|
||||||
Other
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
36
|
|
|
39
|
|
||||||
Revenues from contracts with customers
|
$
|
802
|
|
|
$
|
868
|
|
|
$
|
322
|
|
|
$
|
163
|
|
|
$
|
107
|
|
|
$
|
2,262
|
|
|
Six Months Ended June 30, 2018
|
||||||||||||||||||||||
(In millions)
|
Eagle Ford
|
|
Bakken
|
|
Oklahoma
|
|
Northern Delaware
|
|
Other U.S.
|
|
Total
|
||||||||||||
Crude oil and condensate
|
$
|
760
|
|
|
$
|
735
|
|
|
$
|
226
|
|
|
$
|
114
|
|
|
$
|
97
|
|
|
$
|
1,932
|
|
Natural gas liquids
|
87
|
|
|
32
|
|
|
82
|
|
|
12
|
|
|
5
|
|
|
218
|
|
||||||
Natural gas
|
66
|
|
|
18
|
|
|
81
|
|
|
7
|
|
|
12
|
|
|
184
|
|
||||||
Other
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
12
|
|
||||||
Revenues from contracts with customers
|
$
|
916
|
|
|
$
|
785
|
|
|
$
|
389
|
|
|
$
|
133
|
|
|
$
|
123
|
|
|
$
|
2,346
|
|
|
Three Months Ended June 30, 2019
|
||||||||||||||
(In millions)
|
E.G.
|
|
U.K.
|
|
Other International
|
|
Total
|
||||||||
Crude oil and condensate
|
$
|
101
|
|
|
$
|
51
|
|
|
$
|
9
|
|
|
$
|
161
|
|
Natural gas liquids
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Natural gas
|
9
|
|
|
4
|
|
|
—
|
|
|
13
|
|
||||
Other
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
||||
Revenues from contracts with customers
|
$
|
111
|
|
|
$
|
61
|
|
|
$
|
9
|
|
|
$
|
181
|
|
|
Three Months Ended June 30, 2018
|
||||||||||||||
(In millions)
|
E.G.
|
|
U.K.
|
|
Other International
|
|
Total
|
||||||||
Crude oil and condensate
|
$
|
100
|
|
|
$
|
71
|
|
|
$
|
22
|
|
|
$
|
193
|
|
Natural gas liquids
|
1
|
|
|
3
|
|
|
—
|
|
|
4
|
|
||||
Natural gas
|
10
|
|
|
12
|
|
|
—
|
|
|
22
|
|
||||
Other
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
||||
Revenues from contracts with customers
|
$
|
111
|
|
|
$
|
93
|
|
|
$
|
22
|
|
|
$
|
226
|
|
|
Six Months Ended June 30, 2019
|
||||||||||||||
(In millions)
|
E.G.
|
|
U.K.
|
|
Other International
|
|
Total
|
||||||||
Crude oil and condensate
|
$
|
148
|
|
|
$
|
107
|
|
|
$
|
19
|
|
|
$
|
274
|
|
Natural gas liquids
|
2
|
|
|
1
|
|
|
—
|
|
|
3
|
|
||||
Natural gas
|
16
|
|
|
12
|
|
|
—
|
|
|
28
|
|
||||
Other
|
—
|
|
|
14
|
|
|
—
|
|
|
14
|
|
||||
Revenues from contracts with customers
|
$
|
166
|
|
|
$
|
134
|
|
|
$
|
19
|
|
|
$
|
319
|
|
|
Six Months Ended June 30, 2018
|
||||||||||||||||||
(In millions)
|
E.G.
|
|
U.K.
|
|
Libya
|
|
Other International
|
|
Total
|
||||||||||
Crude oil and condensate
|
$
|
171
|
|
|
$
|
166
|
|
|
$
|
187
|
|
|
$
|
45
|
|
|
$
|
569
|
|
Natural gas liquids
|
2
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|||||
Natural gas
|
19
|
|
|
20
|
|
|
9
|
|
|
—
|
|
|
48
|
|
|||||
Other
|
—
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|||||
Revenues from contracts with customers
|
$
|
192
|
|
|
$
|
205
|
|
|
$
|
196
|
|
|
$
|
45
|
|
|
$
|
638
|
|
(In millions)
|
June 30, 2019
|
January 1, 2019
|
||||
Receivables from contracts with customers, included in receivables, less reserves
|
$
|
797
|
|
$
|
714
|
|
Contract asset (liability)
|
$
|
21
|
|
$
|
(1
|
)
|
|
Six Months Ended
|
||
(In millions)
|
June 30, 2019
|
||
Contract asset (liability) balance as of January 1, 2019
|
$
|
(1
|
)
|
Revenue recognized as performance obligations are satisfied
|
74
|
|
|
Amounts invoiced to customers
|
(52
|
)
|
|
Contract asset (liability) balance as of June 30, 2019
|
$
|
21
|
|
•
|
United States (“U.S.”) – explores for, produces and markets crude oil and condensate, NGLs and natural gas in the United States
|
•
|
International (“Int’l”) – 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, 2019
|
||||||||||||||
|
|
Not Allocated
|
|
|
|||||||||||
(In millions)
|
U.S.
|
|
Int’l
|
|
to Segments
|
|
Total
|
||||||||
Revenues from contracts with customers
|
$
|
1,200
|
|
|
$
|
181
|
|
|
$
|
—
|
|
|
$
|
1,381
|
|
Net gain on commodity derivatives
|
5
|
|
|
—
|
|
|
11
|
|
(b)
|
16
|
|
||||
Income from equity method investments
|
—
|
|
|
31
|
|
|
—
|
|
|
31
|
|
||||
Net loss on disposal of assets
|
—
|
|
|
—
|
|
|
(8
|
)
|
(c)
|
(8
|
)
|
||||
Other income
|
4
|
|
|
2
|
|
|
7
|
|
|
13
|
|
||||
Less costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Production
|
147
|
|
|
46
|
|
|
—
|
|
|
193
|
|
||||
Shipping, handling and other operating
|
147
|
|
|
10
|
|
|
13
|
|
|
170
|
|
||||
Exploration
|
26
|
|
|
—
|
|
|
—
|
|
|
26
|
|
||||
Depreciation, depletion and amortization
|
561
|
|
|
38
|
|
|
6
|
|
|
605
|
|
||||
Impairments
|
—
|
|
|
—
|
|
|
18
|
|
(d)
|
18
|
|
||||
Taxes other than income
|
79
|
|
|
—
|
|
|
—
|
|
|
79
|
|
||||
General and administrative
|
31
|
|
|
8
|
|
|
48
|
|
|
87
|
|
||||
Net interest and other
|
—
|
|
|
—
|
|
|
64
|
|
|
64
|
|
||||
Other net periodic benefit costs
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
(2
|
)
|
||||
Income tax provision (benefit)
|
3
|
|
|
17
|
|
|
12
|
|
|
32
|
|
||||
Segment income
|
$
|
215
|
|
|
$
|
96
|
|
|
$
|
(150
|
)
|
|
$
|
161
|
|
Capital expenditures(a)
|
$
|
686
|
|
|
$
|
10
|
|
|
$
|
5
|
|
|
$
|
701
|
|
(a)
|
Includes accruals.
|
(b)
|
(c)
|
Primarily related to the sale of our certain non-core proved properties in our International segment (See Note 4).
|
(d)
|
Primarily a result of the anticipated sale of non-core proved properties in the United States segment (See Note 10).
|
|
Three Months Ended June 30, 2018
|
||||||||||||||
|
|
Not Allocated
|
|
|
|||||||||||
(In millions)
|
U.S.
|
|
Int’l
|
|
to Segments
|
|
Total
|
||||||||
Revenues from contracts with customers
|
$
|
1,221
|
|
|
$
|
226
|
|
|
$
|
—
|
|
|
$
|
1,447
|
|
Net loss on commodity derivatives
|
(107
|
)
|
|
—
|
|
|
(45
|
)
|
(b)
|
(152
|
)
|
||||
Income from equity method investments
|
—
|
|
|
60
|
|
|
—
|
|
|
60
|
|
||||
Net gain on disposal of assets
|
—
|
|
|
—
|
|
|
50
|
|
|
50
|
|
||||
Other income
|
2
|
|
|
2
|
|
|
8
|
|
|
12
|
|
||||
Less costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Production
|
153
|
|
|
52
|
|
|
—
|
|
|
205
|
|
||||
Shipping, handling and other operating
|
117
|
|
|
10
|
|
|
(1
|
)
|
|
126
|
|
||||
Exploration
|
64
|
|
|
1
|
|
|
—
|
|
|
65
|
|
||||
Depreciation, depletion and amortization
|
556
|
|
|
50
|
|
|
6
|
|
|
612
|
|
||||
Impairments
|
—
|
|
|
—
|
|
|
34
|
|
(c)
|
34
|
|
||||
Taxes other than income
|
68
|
|
|
—
|
|
|
(3
|
)
|
|
65
|
|
||||
General and administrative
|
35
|
|
|
9
|
|
|
61
|
|
|
105
|
|
||||
Net interest and other
|
—
|
|
|
—
|
|
|
65
|
|
|
65
|
|
||||
Other net periodic benefit costs
|
—
|
|
|
(2
|
)
|
|
2
|
|
|
—
|
|
||||
Income tax provision (benefit)
|
—
|
|
|
26
|
|
|
18
|
|
|
44
|
|
||||
Segment income (loss)
|
$
|
123
|
|
|
$
|
142
|
|
|
$
|
(169
|
)
|
|
$
|
96
|
|
Capital expenditures(a)
|
$
|
641
|
|
|
$
|
16
|
|
|
$
|
5
|
|
|
$
|
662
|
|
(a)
|
Includes accruals.
|
(b)
|
(c)
|
Primarily a result of anticipated sales of certain non-core proved properties in our International and United States segments (See Note 10).
|
|
Six Months Ended June 30, 2019
|
||||||||||||||
|
|
Not Allocated
|
|
|
|||||||||||
(In millions)
|
U.S.
|
|
Int’l
|
|
to Segments
|
|
Total
|
||||||||
Revenues from contracts with customers
|
$
|
2,262
|
|
|
$
|
319
|
|
|
$
|
—
|
|
|
$
|
2,581
|
|
Net gain (loss) on commodity derivatives
|
27
|
|
|
—
|
|
|
(102
|
)
|
(b)
|
(75
|
)
|
||||
Income from equity method investments
|
—
|
|
|
42
|
|
|
—
|
|
|
42
|
|
||||
Net gain on disposal of assets
|
—
|
|
|
—
|
|
|
34
|
|
(c)
|
34
|
|
||||
Other income
|
5
|
|
|
5
|
|
|
38
|
|
(d)
|
48
|
|
||||
Less costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Production
|
286
|
|
|
96
|
|
|
(2
|
)
|
|
380
|
|
||||
Shipping, handling and other operating
|
287
|
|
|
23
|
|
|
14
|
|
|
324
|
|
||||
Exploration
|
85
|
|
|
—
|
|
|
—
|
|
|
85
|
|
||||
Depreciation, depletion and amortization
|
1,075
|
|
|
72
|
|
|
12
|
|
|
1,159
|
|
||||
Impairments
|
—
|
|
|
—
|
|
|
24
|
|
(e)
|
24
|
|
||||
Taxes other than income
|
153
|
|
|
—
|
|
|
(2
|
)
|
|
151
|
|
||||
General and administrative
|
60
|
|
|
15
|
|
|
106
|
|
|
181
|
|
||||
Net interest and other
|
—
|
|
|
—
|
|
|
113
|
|
|
113
|
|
||||
Other net periodic benefit costs
|
—
|
|
|
(3
|
)
|
|
(4
|
)
|
|
(7
|
)
|
||||
Income tax provision (benefit)
|
1
|
|
|
6
|
|
|
(122
|
)
|
(f)
|
(115
|
)
|
||||
Segment income
|
$
|
347
|
|
|
$
|
157
|
|
|
$
|
(169
|
)
|
|
$
|
335
|
|
Capital expenditures(a)
|
$
|
1,292
|
|
|
$
|
15
|
|
|
$
|
8
|
|
|
$
|
1,315
|
|
(a)
|
Includes accruals.
|
(b)
|
(c)
|
Primarily related to the sale of our working interest in the Droshky field (Gulf of Mexico) (See Note 4).
|
(d)
|
Primarily related to the indemnification of certain tax liabilities in connection with the 2010-2011 Federal Tax Audit (See Note 7).
|
(e)
|
Primarily a result of anticipated sales of our certain non-core proved properties in our International and United States segments (See Note 10).
|
(f)
|
|
Six Months Ended June 30, 2018
|
||||||||||||||
|
|
Not Allocated
|
|
|
|||||||||||
(In millions)
|
U.S.
|
|
Int’l
|
|
to Segments
|
|
Total
|
||||||||
Revenue from contracts with customers
|
$
|
2,346
|
|
|
$
|
638
|
|
|
$
|
—
|
|
|
$
|
2,984
|
|
Net loss on commodity derivatives
|
(166
|
)
|
|
—
|
|
|
(88
|
)
|
(b)
|
(254
|
)
|
||||
Income from equity method investments
|
—
|
|
|
97
|
|
|
—
|
|
|
97
|
|
||||
Net gain on disposal of assets
|
—
|
|
|
—
|
|
|
307
|
|
(c)
|
307
|
|
||||
Other income
|
5
|
|
|
3
|
|
|
8
|
|
|
16
|
|
||||
Less costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Production
|
304
|
|
|
119
|
|
|
(1
|
)
|
|
422
|
|
||||
Shipping, handling and other operating
|
228
|
|
|
29
|
|
|
(1
|
)
|
|
256
|
|
||||
Exploration
|
115
|
|
|
2
|
|
|
—
|
|
|
117
|
|
||||
Depreciation, depletion and amortization
|
1,084
|
|
|
104
|
|
|
14
|
|
|
1,202
|
|
||||
Impairments
|
—
|
|
|
—
|
|
|
42
|
|
(d)
|
42
|
|
||||
Taxes other than income
|
132
|
|
|
—
|
|
|
(3
|
)
|
|
129
|
|
||||
General and administrative
|
71
|
|
|
18
|
|
|
116
|
|
|
205
|
|
||||
Net interest and other
|
—
|
|
|
—
|
|
|
110
|
|
|
110
|
|
||||
Other net periodic benefit costs
|
—
|
|
|
(4
|
)
|
|
7
|
|
|
3
|
|
||||
Income tax provision (benefit)
|
3
|
|
|
196
|
|
|
13
|
|
|
212
|
|
||||
Segment income (loss)
|
$
|
248
|
|
|
$
|
274
|
|
|
$
|
(70
|
)
|
|
$
|
452
|
|
Capital expenditures(a)
|
$
|
1,252
|
|
|
$
|
22
|
|
|
$
|
10
|
|
|
$
|
1,284
|
|
(a)
|
Includes accruals.
|
(b)
|
(c)
|
(d)
|
Primarily a result of anticipated sales of certain non-core proved properties in our International and United States segments (See Note 4).
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Effective income tax expense (benefit) rate(a)
|
|
17
|
%
|
|
31
|
%
|
|
(52
|
)%
|
|
32
|
%
|
(a)
|
In all periods presented, we maintained our valuation allowance on our net federal deferred tax assets in the U.S.
|
•
|
Income taxes for the second quarter of 2019 were impacted by pre-tax income and foreign currency revaluation. Income taxes for the six months ended June 30, 2019 were impacted by the settlement of the 2010-2011 U.S. Federal Tax Audit (“IRS Audit”) in the first quarter of 2019, resulting in a tax benefit of $126 million. Additionally, in the first quarter of 2019, we recorded a non-cash deferred tax benefit of $18 million in the U.K. related to an internal restructuring. These two items are discrete to the first six months of 2019. Excluding these discrete adjustments, the effective income tax rate for the first six months of 2019 was an expense of 13%.
|
•
|
Income taxes for the second quarter of 2018 were impacted by foreign currency revaluation. During the six months ended June 30, 2018, income taxes were impacted by the tax expense in Libya of $162 million.
|
(In millions)
|
June 30, 2019
|
|
December 31, 2018
|
||||
Crude oil and natural gas
|
$
|
9
|
|
|
$
|
11
|
|
Supplies and other items
|
63
|
|
|
85
|
|
||
Inventories
|
$
|
72
|
|
|
$
|
96
|
|
(In millions)
|
June 30, 2019
|
|
December 31, 2018
|
||||
United States
|
$
|
16,112
|
|
|
$
|
16,011
|
|
International
|
540
|
|
|
710
|
|
||
Corporate
|
78
|
|
|
83
|
|
||
Net property, plant and equipment
|
$
|
16,730
|
|
|
$
|
16,804
|
|
|
Six Months Ended June 30,
|
||||||||||||||
|
2019
|
|
2018
|
||||||||||||
(In millions)
|
Fair Value
|
|
Impairment
|
|
Fair Value
|
|
Impairment
|
||||||||
Long-lived assets held for use
|
$
|
56
|
|
|
$
|
24
|
|
|
$
|
69
|
|
|
$
|
42
|
|
•
|
2019 – During the six months ended June 30, 2019, we recorded pre-tax non-cash proved property impairments of $24 million, primarily as a result of anticipated sales proceeds for certain non-core proved properties in our United States segment and the sale of our non-operated interest in the Atrush block (Kurdistan) in our International segment. The related fair value was measured using the market approach, based upon anticipated sales proceeds less costs to sell which resulted in a Level 2 classification. See Note 4 for discussion of the divestiture in further detail.
|
•
|
2018 – During the six months ended June 30, 2018, we recorded pre-tax non-cash proved property impairments of $42 million, to a fair value of $69 million, primarily as a result of anticipated sales proceeds for certain non-core proved properties in our International and United States segments. The related fair value measurement utilized the market approach, based upon anticipated sales proceeds less costs to sell which resulted in a Level 2 classification. See Note 4 for discussion of the divestiture in further detail.
|
|
June 30,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Beginning balance
|
$
|
1,145
|
|
|
$
|
1,483
|
|
Incurred liabilities, including acquisitions
|
18
|
|
|
8
|
|
||
Settled liabilities, including dispositions
|
(129
|
)
|
|
(14
|
)
|
||
Accretion expense (included in depreciation, depletion and amortization)
|
26
|
|
|
36
|
|
||
Revisions of estimates
|
11
|
|
|
(9
|
)
|
||
Held for sale
|
(864
|
)
|
|
(89
|
)
|
||
Ending balance
|
$
|
207
|
|
|
$
|
1,415
|
|
•
|
Settled liabilities are primarily related to the sale of our working interest in the Droshky field (Gulf of Mexico), which closed during the first quarter of 2019.
|
•
|
Held for sale includes the asset retirement obligations of $966 million associated with the sale of our U.K. business, which was partially offset by settled liabilities for dispositions primarily related to the Droshky field in the first quarter of 2019. See Note 4 for discussion of the divestitures in further detail.
|
•
|
Ending balance includes $18 million classified as short-term at June 30, 2019.
|
•
|
Held for sale includes the asset retirement obligations associated with the sale of non-core, non-operated conventional properties, primarily in the Gulf of Mexico. See Note 4 for discussion of the divestitures in further detail.
|
•
|
Ending balance includes $51 million classified as short-term at June 30, 2018.
|
(In millions)
|
|
June 30, 2019
|
||
Operating Leases:
|
Balance Sheet Location:
|
|
||
ROU asset
|
Other noncurrent assets
|
$
|
248
|
|
Current portion of long-term lease liability
|
Other current liabilities
|
$
|
104
|
|
Long-term lease liability
|
Deferred credits and other liabilities
|
$
|
151
|
|
•
|
Implemented an accounting policy to not recognize any right-of-use assets and lease liabilities related to short-term leases on the balance sheet.
|
•
|
Implemented an accounting policy to not separate the lease and nonlease components for all asset classes, except for vessels.
|
•
|
Elected the package of practical expedients which allows us to not reassess our prior conclusions regarding the lease identification and lease classification for contracts that commenced or expired prior to the effective date.
|
•
|
Elected the practical expedient pertaining to land easements which allows us to continue accounting for existing agreements under the previous accounting policies as nonlease transactions. Any modifications of existing contracts or new agreements will be assessed under the new lease accounting guidance and may become leases in the future.
|
(a)
|
Represents our net share of the ROU asset amortization and the interest expense.
|
(b)
|
Represents our net share of lease costs arising from leases of less than one year but longer than one month that were not included in the lease liability.
|
(c)
|
Represents our net share of variable lease payments that were not included in the lease liability.
|
(d)
|
Represents the cumulative value of ROU assets recognized at lease inception during the first six months of 2019. This amount is then amortized as we utilize the ROU asset, the net effect of which is the ending ROU asset of $248 million (first table above).
|
(In millions)
|
Operating Lease Obligations
|
||
2019
|
$
|
61
|
|
2020
|
106
|
|
|
2021
|
62
|
|
|
2022
|
35
|
|
|
2023
|
5
|
|
|
Thereafter
|
1
|
|
|
Total undiscounted lease payments
|
$
|
270
|
|
Less: amount representing interest
|
15
|
|
|
Total operating lease liabilities
|
$
|
255
|
|
Less: current portion of long-term lease liability as of June 30, 2019
|
104
|
|
|
Long-term lease liability as of June 30, 2019
|
$
|
151
|
|
(In millions)
|
Operating Lease Obligations
|
||
2019
|
$
|
62
|
|
2020
|
54
|
|
|
2021
|
35
|
|
|
2022
|
12
|
|
|
2023
|
5
|
|
|
Thereafter
|
49
|
|
|
Sublease rentals
|
—
|
|
|
Total minimum lease payments
|
$
|
217
|
|
(In millions)
|
Operating Lease Future Cash Receipts
|
||
2019
|
$
|
4
|
|
2020
|
6
|
|
|
2021
|
6
|
|
|
2022
|
6
|
|
|
2023
|
6
|
|
|
Thereafter
|
66
|
|
|
Total undiscounted cash flows
|
$
|
94
|
|
|
June 30, 2019
|
|
|
||||||||||
(In millions)
|
Asset
|
|
Liability
|
|
Net Asset (Liability)
|
|
Balance Sheet Location
|
||||||
Not Designated as Hedges
|
|
|
|
|
|
|
|
||||||
Commodity
|
$
|
33
|
|
|
$
|
4
|
|
|
$
|
29
|
|
|
Other current assets
|
Commodity
|
—
|
|
|
4
|
|
|
(4
|
)
|
|
Deferred credits and other liabilities
|
|||
Total Not Designated as Hedges
|
$
|
33
|
|
|
$
|
8
|
|
|
$
|
25
|
|
|
|
|
December 31, 2018
|
|
|
||||||||||
(In millions)
|
Asset
|
|
Liability
|
|
Net Asset (Liability)
|
|
Balance Sheet Location
|
||||||
Not Designated as Hedges
|
|
|
|
|
|
|
|
||||||
Commodity
|
$
|
131
|
|
|
$
|
—
|
|
|
$
|
131
|
|
|
Other current assets
|
Commodity
|
—
|
|
|
4
|
|
|
(4
|
)
|
|
Deferred credits and other liabilities
|
|||
Total Not Designated as Hedges
|
$
|
131
|
|
|
$
|
4
|
|
|
$
|
127
|
|
|
|
|
|
2019
|
|
|
2020
|
|
|
2021
|
||||||||||
Crude Oil
|
|
Third Quarter
|
|
Fourth Quarter
|
|
|
Full Year
|
|
|
Full Year
|
||||||||
NYMEX WTI Three-Way Collars (a)
|
|
|
|
|
|
|
|
|
|
|
||||||||
Volume (Bbls/day)
|
|
80,000
|
|
|
80,000
|
|
|
|
9,945
|
|
|
|
—
|
|
||||
Weighted average price per Bbl:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Ceiling
|
|
$
|
74.19
|
|
|
$
|
74.19
|
|
|
|
$
|
70.00
|
|
|
|
$
|
—
|
|
Floor
|
|
$
|
56.75
|
|
|
$
|
56.75
|
|
|
|
$
|
55.00
|
|
|
|
$
|
—
|
|
Sold put
|
|
$
|
49.50
|
|
|
$
|
49.50
|
|
|
|
$
|
47.00
|
|
|
|
$
|
—
|
|
Basis Swaps - Argus WTI Midland (b)
|
|
|
|
|
|
|
|
|
|
|
||||||||
Volume (Bbls/day)
|
|
15,000
|
|
|
15,000
|
|
|
|
15,000
|
|
|
|
—
|
|
||||
Weighted average price per Bbl
|
|
$
|
(1.40
|
)
|
|
$
|
(1.40
|
)
|
|
|
$
|
(0.94
|
)
|
|
|
$
|
—
|
|
Basis Swaps - Net Energy Clearbrook (c)
|
|
|
|
|
|
|
|
|
|
|
||||||||
Volume (Bbls/day)
|
|
1,000
|
|
|
1,000
|
|
|
|
—
|
|
|
|
—
|
|
||||
Weighted average price per Bbl
|
|
$
|
(3.50
|
)
|
|
$
|
(3.50
|
)
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
Basis Swaps - NYMEX WTI / ICE Brent (d)
|
|
|
|
|
|
|
|
|
|
|
||||||||
Volume (Bbls/day)
|
|
5,000
|
|
|
5,000
|
|
|
|
5,000
|
|
|
|
808
|
|
||||
Weighted average price per Bbl
|
|
$
|
(7.24
|
)
|
|
$
|
(7.24
|
)
|
|
|
$
|
(7.24
|
)
|
|
|
$
|
(7.24
|
)
|
Basis Swaps - Argus WTI Houston (e)
|
|
|
|
|
|
|
|
|
|
|
||||||||
Volume (Bbls/day)
|
|
10,000
|
|
|
10,000
|
|
|
|
—
|
|
|
|
—
|
|
||||
Weighted average price per Bbl
|
|
$
|
5.51
|
|
|
$
|
5.51
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
NYMEX Roll Basis Swaps
|
|
|
|
|
|
|
|
|
|
|
||||||||
Volume (Bbls/day)
|
|
60,000
|
|
|
60,000
|
|
|
|
—
|
|
|
|
—
|
|
||||
Weighted average price per Bbl
|
|
$
|
0.38
|
|
|
$
|
0.38
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
(a)
|
Between July 1, 2019 and August 5, 2019, we entered into 10,000 Bbls/day of three-way collars for January - December 2020, with a ceiling of $65.12, a sold put of $48.00, and a floor of $55.00.
|
(b)
|
The basis differential price is indexed against Argus WTI Midland.
|
(c)
|
The basis differential price is indexed against Net Energy Canada Bakken SW at Clearbrook (“UHC”).
|
(d)
|
The basis differential price is indexed against International Commodity Exchange (“ICE”) Brent and NYMEX WTI.
|
(e)
|
The basis differential price is indexed against Argus WTI Houston.
|
|
June 30, 2019
|
||||||||||||||
(In millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Derivative instruments, assets
|
|
|
|
|
|
|
|
||||||||
Commodity(a)
|
$
|
—
|
|
|
$
|
30
|
|
|
$
|
—
|
|
|
$
|
30
|
|
Derivative instruments, assets
|
$
|
—
|
|
|
$
|
30
|
|
|
$
|
—
|
|
|
$
|
30
|
|
Derivative instruments, liabilities
|
|
|
|
|
|
|
|
||||||||
Commodity(a)
|
$
|
(5
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(5
|
)
|
Derivative instruments, liabilities
|
$
|
(5
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(5
|
)
|
(a)
|
|
December 31, 2018
|
||||||||||||||
(In millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Derivative instruments, assets
|
|
|
|
|
|
|
|
||||||||
Commodity(a)
|
$
|
21
|
|
|
$
|
106
|
|
|
$
|
—
|
|
|
$
|
127
|
|
Derivative instruments, assets
|
$
|
21
|
|
|
$
|
106
|
|
|
$
|
—
|
|
|
$
|
127
|
|
Derivative instruments, liabilities
|
|
|
|
|
|
|
|
||||||||
Derivative instruments, liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(a)
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||
(In millions)
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
||||||||
Financial assets
|
|
|
|
|
|
|
|
||||||||
Current assets
|
$
|
4
|
|
|
$
|
4
|
|
|
$
|
3
|
|
|
$
|
3
|
|
Other noncurrent assets
|
25
|
|
|
31
|
|
|
76
|
|
|
81
|
|
||||
Total financial assets
|
$
|
29
|
|
|
$
|
35
|
|
|
$
|
79
|
|
|
$
|
84
|
|
Financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other current liabilities
|
$
|
76
|
|
|
$
|
101
|
|
|
$
|
37
|
|
|
$
|
58
|
|
Long-term debt, including current portion(a)
|
6,048
|
|
|
5,528
|
|
|
5,469
|
|
|
5,528
|
|
||||
Deferred credits and other liabilities
|
109
|
|
|
98
|
|
|
93
|
|
|
88
|
|
||||
Total financial liabilities
|
$
|
6,233
|
|
|
$
|
5,727
|
|
|
$
|
5,599
|
|
|
$
|
5,674
|
|
(a)
|
Excludes capital leases and debt issuance costs.
|
|
Stock Options
|
|
Restricted Stock Awards & Units
|
||||||||||
|
Number of Shares
|
|
Weighted Average Exercise Price
|
|
Awards
|
|
Weighted Average Grant Date Fair Value
|
||||||
Outstanding at December 31, 2018
|
6,180,007
|
|
|
$
|
24.39
|
|
|
8,504,946
|
|
|
$
|
14.04
|
|
Granted
|
648,526
|
|
(a)
|
$
|
16.79
|
|
|
3,846,526
|
|
|
$
|
16.96
|
|
Exercised/Vested
|
(10,470
|
)
|
|
$
|
14.92
|
|
|
(3,562,277
|
)
|
|
$
|
12.41
|
|
Canceled
|
(590,624
|
)
|
|
$
|
24.01
|
|
|
(377,692
|
)
|
|
$
|
15.35
|
|
Outstanding at June 30, 2019
|
6,227,439
|
|
|
$
|
23.65
|
|
|
8,411,503
|
|
|
$
|
16.00
|
|
|
Three Months Ended June 30,
|
||||||||||||||
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Service cost
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
7
|
|
|
6
|
|
|
1
|
|
|
2
|
|
||||
Expected return on plan assets
|
(8
|
)
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization:
|
|
|
|
|
|
|
|
|
|
|
|
||||
– prior service cost (credit)
|
(2
|
)
|
|
(3
|
)
|
|
(4
|
)
|
|
(2
|
)
|
||||
– actuarial loss
|
2
|
|
|
3
|
|
|
—
|
|
|
1
|
|
||||
Net settlement loss(a)
|
2
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit cost(b)
|
$
|
6
|
|
|
$
|
5
|
|
|
$
|
(3
|
)
|
|
$
|
1
|
|
|
Six Months Ended June 30,
|
||||||||||||||
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Service cost
|
$
|
9
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Interest cost
|
14
|
|
|
13
|
|
|
2
|
|
|
4
|
|
||||
Expected return on plan assets
|
(16
|
)
|
|
(17
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization:
|
|
|
|
|
|
|
|
|
|
|
|||||
– prior service credit
|
(4
|
)
|
|
(5
|
)
|
|
(8
|
)
|
|
(4
|
)
|
||||
– actuarial loss
|
4
|
|
|
6
|
|
|
—
|
|
|
1
|
|
||||
Net settlement loss(a)
|
2
|
|
|
6
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit cost(b)
|
$
|
9
|
|
|
$
|
12
|
|
|
$
|
(6
|
)
|
|
$
|
2
|
|
(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.
|
(b)
|
Net periodic benefit cost reflects a calculated market-related value of plan assets which recognizes changes in fair value over three years.
|
(a)
|
During 2019 and 2018 we had a full valuation allowance on net federal deferred tax assets and as such, there is no tax impact to our postretirement and postemployment plans.
|
|
|
Six Months Ended June 30,
|
||||||
(In millions)
|
|
2019
|
|
2018
|
||||
Included in operating activities:
|
|
|
|
|
||||
Interest paid, net of amounts capitalized
|
|
$
|
70
|
|
|
$
|
134
|
|
Income taxes paid to taxing authorities
|
|
149
|
|
|
282
|
|
||
Noncash investing activities:
|
|
|
|
|
|
|
||
Increase (decrease) in asset retirement costs
|
|
$
|
29
|
|
|
$
|
(1
|
)
|
Asset retirement obligations assumed by buyer(a)
|
|
109
|
|
|
3
|
|
•
|
EGHoldings, in which we have a 60% noncontrolling interest. EGHoldings is engaged in LNG production activity.
|
•
|
AMPCO, in which we have a 45% interest. AMPCO is engaged in methanol production activity.
|
|
Ownership as of
|
|
June 30,
|
|
December 31,
|
||||
(In millions)
|
June 30, 2019
|
|
2019
|
|
2018
|
||||
EGHoldings
|
60%
|
|
$
|
331
|
|
|
$
|
402
|
|
Alba Plant LLC
|
52%
|
|
173
|
|
|
167
|
|
||
AMPCO
|
45%
|
|
180
|
|
|
176
|
|
||
Total
|
|
|
$
|
684
|
|
|
$
|
745
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(In millions)
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Income data:
|
|
|
|
|
|
|
|
|
||||||||
Revenues and other income
|
|
$
|
233
|
|
|
$
|
228
|
|
|
$
|
453
|
|
|
$
|
426
|
|
Income from operations
|
|
$
|
82
|
|
|
$
|
143
|
|
|
$
|
131
|
|
|
$
|
240
|
|
Net income
|
|
$
|
63
|
|
|
$
|
123
|
|
|
$
|
95
|
|
|
$
|
202
|
|
•
|
In July 2019, we closed on the sale of our U.K. business for proceeds of approximately $95 million, reflecting the assumption by the buyer of: working capital and cash equivalent balances of approximately $345 million and the U.K. asset retirement obligations of $966 million.
|
•
|
In the second quarter of 2019, we closed on the sale our 15% non-operated interest in the Atrush block in Kurdistan for proceeds of $63 million, before closing adjustments.
|
•
|
Returned additional capital to shareholders by acquiring approximately 15 million common shares at a cost of $236 million, with $550 million of repurchase authorization remaining at June 30, 2019.
|
•
|
On July 31, 2019, the Board of Directors authorized an extension of the share repurchase program, which increased the remaining share repurchase authorization to $1.5 billion.
|
•
|
At the end of the second quarter 2019, we had approximately $4.4 billion of liquidity, comprised of $1.0 billion in cash and an undrawn $3.4 billion revolving credit facility.
|
•
|
Strong financial position with investment grade at all three primary credit ratings agencies.
|
•
|
Total net sales volumes for the quarter were 437 mboed, including 330 mboed in the U.S. resource plays. Our U.S. oil net sales volumes increased 13% compared to the same quarter last year.
|
•
|
Our net income per share was $0.20 in the second quarter of 2019 as compared to a net income per share of $0.11 in the same period last year. Included in net income results for the current quarter:
|
◦
|
A decrease in revenues from contracts with customers of approximately 5% to $1.4 billion, compared to the same quarter last year, primarily as a result of lower price realizations partially offset by higher net sales volumes in the current quarter.
|
◦
|
Despite higher sales volumes, total costs and expenses from operations decreased $34 million during the quarter compared to the same quarter last year primarily as a result of lower production expenses.
|
•
|
Net cash provided by operating activities decreased 7% as commodity price realizations decreased while net sales volumes remained flat in the first six months of 2019 versus the same period last year.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
Net Sales Volumes
|
2019
|
|
2018
|
|
Increase (Decrease)
|
|
2019
|
|
2018
|
|
Increase (Decrease)
|
United States (mboed)
|
330
|
|
298
|
|
11%
|
|
314
|
|
291
|
|
8%
|
International (mboed)(a)
|
107
|
|
121
|
|
(12)%
|
|
98
|
|
133
|
|
(26)%
|
Total (mboed)
|
437
|
|
419
|
|
4%
|
|
412
|
|
424
|
|
(3)%
|
(a)
|
We closed on the sale of our Libya subsidiary in the first quarter of 2018. The six months ended June 30, 2018 includes net sales volumes relating to Libya of 16 mboed. See further detail of International net sales volumes below. See Note 4 to the consolidated financial statements for further information.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
Net Sales Volumes
|
2019
|
|
2018
|
|
Increase (Decrease)
|
|
2019
|
|
2018
|
|
Increase (Decrease)
|
Equivalent Barrels (mboed)
|
|
|
|
|
|
|
|
|
|
|
|
Eagle Ford
|
109
|
|
106
|
|
3%
|
|
107
|
|
105
|
|
2%
|
Bakken
|
103
|
|
82
|
|
26%
|
|
98
|
|
78
|
|
26%
|
Oklahoma
|
82
|
|
80
|
|
3%
|
|
72
|
|
77
|
|
(6)%
|
Northern Delaware
|
27
|
|
17
|
|
59%
|
|
27
|
|
17
|
|
59%
|
Other United States
|
9
|
|
13
|
|
(31)%
|
|
10
|
|
14
|
|
(29)%
|
Total United States (mboed)
|
330
|
|
298
|
|
11%
|
|
314
|
|
291
|
|
8%
|
|
Three Months Ended June 30, 2019
|
||||||||
Sales Mix - U.S. Resource Plays
|
Eagle Ford
|
|
Bakken
|
|
Oklahoma
|
|
Northern Delaware
|
|
Total
|
Crude oil and condensate
|
56%
|
|
85%
|
|
26%
|
|
57%
|
|
58%
|
Natural gas liquids
|
23%
|
|
8%
|
|
29%
|
|
21%
|
|
19%
|
Natural gas
|
21%
|
|
7%
|
|
45%
|
|
22%
|
|
23%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||
Drilling Activity - U.S. Resource Plays
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Gross Operated
|
|
|
|
|
|
|
|
Eagle Ford:
|
|
|
|
|
|
|
|
Wells drilled to total depth
|
36
|
|
33
|
|
66
|
|
67
|
Wells brought to sales
|
41
|
|
39
|
|
82
|
|
73
|
Bakken:
|
|
|
|
|
|
|
|
Wells drilled to total depth
|
20
|
|
24
|
|
32
|
|
43
|
Wells brought to sales
|
30
|
|
21
|
|
59
|
|
32
|
Oklahoma:
|
|
|
|
|
|
|
|
Wells drilled to total depth
|
18
|
|
10
|
|
38
|
|
23
|
Wells brought to sales
|
18
|
|
17
|
|
36
|
|
34
|
Northern Delaware:
|
|
|
|
|
|
|
|
Wells drilled to total depth
|
14
|
|
21
|
|
27
|
|
41
|
Wells brought to sales
|
16
|
|
13
|
|
31
|
|
22
|
•
|
Eagle Ford – Our net sales volumes were 109 mboed in the second quarter of 2019 which was 3% higher compared to the prior year quarter. During the second quarter of 2019, we continued to deliver strong results from the expanded core of Atascosa County in terms of well performance. Additionally, we continued efforts to uplift performance outside of the Karnes and Atascosa core, by applying enhanced completion techniques in Gonzales County. Overall, despite a majority of wells to sales outside of Karnes County during second quarter, the Eagle Ford asset achieved a quarterly record for average 30 day initial well productivity, while continuing to drive a trend of lower completed well costs per lateral foot.
|
•
|
Bakken – Our net sales volumes of 103 mboed represent a 26% increase over the prior year quarter of 82 mboed with company-operated wells to sales balanced between Myrmidon and Hector. We continued to improve capital efficiency, which was highlighted by a six well pad in Myrmidon, with an average completed well cost of $5.3 million. The average completed well cost for all second quarter wells was just $5.2 million.
|
•
|
Oklahoma – Our net sales volumes in the second quarter of 2019 increased by 3% from the prior year quarter, with net sales volumes of 82 mboed. We continued to deliver strong results from the over-pressured STACK where the eight-well per section Mike Stroud infill achieved average completed well costs more than 30% below the previously drilled parent well. We continued to make significant progress in reducing our cost structure with our two most recent over-pressured STACK infills completed at an average completed well cost of $6.3 million normalized to a 10,000 foot lateral.
|
•
|
Northern Delaware – Our net sales volumes were 27 mboed in the second quarter of 2019 which was 59% higher compared to the prior year quarter. We continued to make progress in reducing our cost structure and improving margins, with second quarter cash costs down over the prior year on a per boe basis, 100% of water on pipe for all second quarter wells to sales, and a rising percentage of total oil production on pipe. Second quarter again featured strong Upper Wolfcamp productivity in Malaga, with the second quarter completed well costs per lateral foot below the 2018 average.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
Net Sales Volumes
|
2019
|
|
2018
|
|
Increase (Decrease)
|
|
2019
|
|
2018
|
|
Increase (Decrease)
|
Equivalent Barrels (mboed)
|
|
|
|
|
|
|
|
|
|
|
|
Equatorial Guinea
|
95
|
|
103
|
|
(8)%
|
|
85
|
|
98
|
|
(13)%
|
United Kingdom(a)
|
10
|
|
14
|
|
(29)%
|
|
11
|
|
15
|
|
(27)%
|
Libya
|
—
|
|
—
|
|
—%
|
|
—
|
|
16
|
|
(100)%
|
Other International
|
2
|
|
4
|
|
(50)%
|
|
2
|
|
4
|
|
(50)%
|
Total International (mboed)
|
107
|
|
121
|
|
(12)%
|
|
98
|
|
133
|
|
(26)%
|
Equity Method Investees
|
|
|
|
|
|
|
|
|
|
|
|
LNG (mtd)
|
5,321
|
|
6,141
|
|
(13)%
|
|
4,981
|
|
5,843
|
|
(15)%
|
Methanol (mtd)
|
1,134
|
|
1,316
|
|
(14)%
|
|
1,069
|
|
1,256
|
|
(15)%
|
Condensate and LPG (boed)
|
11,080
|
|
12,689
|
|
(13)%
|
|
10,488
|
|
12,553
|
|
(16)%
|
(a)
|
Includes natural gas acquired for injection and subsequent resale.
|
•
|
Equatorial Guinea – Net sales volumes in the second quarter of 2019 were lower compared to the same period in 2018 as a result of natural field decline.
|
•
|
United Kingdom – Second quarter of 2019 net sales volumes were lower compared to the second quarter of 2018 primarily due to timing of liftings in the non-operated Foinaven complex. In July 2019, we closed on the sale of our U.K. business. See Note 4 to the consolidated financial statements for further information.
|
•
|
Libya – During the first quarter of 2018 we closed on the sale of our subsidiary in Libya. See Note 4 to the consolidated financial statements for further information.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||
|
2019
|
|
2018
|
|
Increase (Decrease)
|
|
2019
|
|
2018
|
|
Increase (Decrease)
|
||||||||
Average Price Realizations(a)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Crude oil and condensate (per bbl)(b)
|
$
|
59.18
|
|
|
$
|
66.03
|
|
|
(10)%
|
|
$
|
56.72
|
|
|
$
|
64.16
|
|
|
(12)%
|
Natural gas liquids (per bbl)
|
14.60
|
|
|
22.09
|
|
|
(34)%
|
|
15.09
|
|
|
22.49
|
|
|
(33)%
|
||||
Natural gas (per mcf)
|
1.89
|
|
|
2.18
|
|
|
(13)%
|
|
2.36
|
|
|
2.38
|
|
|
(1)%
|
||||
Benchmarks
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
WTI crude oil average of daily prices (per bbl)
|
$
|
59.91
|
|
|
$
|
67.91
|
|
|
(12)%
|
|
$
|
57.45
|
|
|
$
|
65.46
|
|
|
(12)%
|
Magellan East Houston (“MEH”) crude oil average of daily prices (per bbl)(c)
|
66.32
|
|
|
|
|
|
|
63.37
|
|
|
|
|
|
||||||
LLS crude oil average of daily prices (per bbl)(c)
|
|
|
72.96
|
|
|
|
|
|
|
69.48
|
|
|
|
||||||
Mont Belvieu NGLs (per bbl)(d)
|
19.20
|
|
|
28.28
|
|
|
(32)%
|
|
21.19
|
|
|
27.29
|
|
|
(22)%
|
||||
Henry Hub natural gas settlement date average (per mmbtu)
|
2.64
|
|
|
2.80
|
|
|
(6)%
|
|
2.89
|
|
|
2.90
|
|
|
—%
|
(a)
|
Excludes gains or losses on commodity derivative instruments.
|
(b)
|
Inclusion of realized gains (losses) on crude oil derivative instruments would have impacted average price realizations by $0.32 per bbl and $(7.04) per bbl for the second quarter 2019 and 2018 and $0.70 per bbl and $(5.71) per bbl for the first six months of 2019 and 2018.
|
(c)
|
Benchmark change due to industry shift to MEH in the first quarter of 2019.
|
(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,
|
||||||||||||||||
|
2019
|
|
2018
|
|
Increase (Decrease)
|
|
2019
|
|
2018
|
|
Increase (Decrease)
|
||||||||
Average Price Realizations
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Crude oil and condensate (per bbl)
|
$
|
58.21
|
|
|
$
|
66.12
|
|
|
(12)%
|
|
$
|
56.36
|
|
|
$
|
66.19
|
|
|
(15)%
|
Natural gas liquids (per bbl)
|
1.67
|
|
|
2.91
|
|
|
(43)%
|
|
1.81
|
|
|
2.40
|
|
|
(25)%
|
||||
Natural gas (per mcf)
|
0.35
|
|
|
0.52
|
|
|
(33)%
|
|
0.41
|
|
|
0.59
|
|
|
(31)%
|
||||
Benchmark
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Brent (Europe) crude oil (per bbl)(a)
|
$
|
68.92
|
|
|
$
|
74.50
|
|
|
(7)%
|
|
|
$66.05
|
|
|
$
|
70.65
|
|
|
(7)%
|
(a)
|
Average of monthly prices obtained from the United States Energy Information Agency website.
|
|
Three Months Ended June 30,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Revenues from contracts with customers
|
|
|
|
||||
United States
|
$
|
1,200
|
|
|
$
|
1,221
|
|
International
|
181
|
|
|
226
|
|
||
Segment revenues from contracts with customers
|
$
|
1,381
|
|
|
$
|
1,447
|
|
|
Three Months Ended June 30,
|
||||||||||||||||
($ per boe)
|
2019
|
2018
|
Increase (Decrease)
|
|
2019
|
2018
|
Increase (Decrease)
|
||||||||||
Production Expense and Production Expense Rate
|
Expense
|
|
Rate
|
||||||||||||||
United States
|
$
|
147
|
|
$
|
153
|
|
(4
|
)%
|
|
$
|
4.89
|
|
$
|
5.66
|
|
(14
|
)%
|
International
|
$
|
46
|
|
$
|
52
|
|
(12
|
)%
|
|
$
|
4.72
|
|
$
|
4.71
|
|
—
|
%
|
|
Three Months Ended June 30,
|
|||||||||
(In millions)
|
2019
|
|
2018
|
|
Increase (Decrease)
|
|||||
Exploration Expenses
|
|
|
|
|
|
|||||
Unproved property impairments
|
$
|
20
|
|
|
$
|
41
|
|
|
(51
|
)%
|
Dry well costs
|
—
|
|
|
10
|
|
|
(100
|
)%
|
||
Geological and geophysical
|
3
|
|
|
8
|
|
|
(63
|
)%
|
||
Other
|
3
|
|
|
6
|
|
|
(50
|
)%
|
||
Total exploration expenses
|
$
|
26
|
|
|
$
|
65
|
|
|
(60
|
)%
|
|
Three Months Ended June 30,
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
Increase (Decrease)
|
||||||
United States
|
$
|
215
|
|
|
$
|
123
|
|
|
$
|
92
|
|
International
|
96
|
|
|
142
|
|
|
(46
|
)
|
|||
Segment income
|
311
|
|
|
265
|
|
|
46
|
|
|||
Items not allocated to segments, net of income taxes
|
(150
|
)
|
|
(169
|
)
|
|
19
|
|
|||
Net income
|
$
|
161
|
|
|
$
|
96
|
|
|
$
|
65
|
|
|
Six Months Ended June 30,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Revenues from contracts with customers
|
|
|
|
||||
United States
|
$
|
2,262
|
|
|
$
|
2,346
|
|
International
|
319
|
|
|
638
|
|
||
Segment revenues from contracts with customers
|
$
|
2,581
|
|
|
$
|
2,984
|
|
|
|
|
|
Increase (Decrease) Related to
|
|
|
||||||||||
(In millions)
|
|
Six Months Ended June 30, 2018
|
|
Price Realizations
|
|
Net Sales Volumes
|
|
Six Months Ended June 30, 2019
|
||||||||
United States Price/Volume Analysis
|
||||||||||||||||
Crude oil and condensate
|
|
$
|
1,932
|
|
|
$
|
(247
|
)
|
|
$
|
195
|
|
|
$
|
1,880
|
|
Natural gas liquids
|
|
218
|
|
|
(79
|
)
|
|
22
|
|
|
161
|
|
||||
Natural gas
|
|
184
|
|
|
(1
|
)
|
|
(1
|
)
|
|
182
|
|
||||
Other sales
|
|
12
|
|
|
|
|
|
|
39
|
|
||||||
Total
|
|
$
|
2,346
|
|
|
|
|
|
|
$
|
2,262
|
|
||||
International Price/Volume Analysis
|
||||||||||||||||
Crude oil and condensate
|
|
$
|
569
|
|
|
$
|
(48
|
)
|
|
$
|
(247
|
)
|
|
$
|
274
|
|
Natural gas liquids
|
|
5
|
|
|
(1
|
)
|
|
(1
|
)
|
|
3
|
|
||||
Natural gas
|
|
48
|
|
|
(12
|
)
|
|
(8
|
)
|
|
28
|
|
||||
Other sales
|
|
16
|
|
|
|
|
|
|
14
|
|
||||||
Total
|
|
$
|
638
|
|
|
|
|
|
|
$
|
319
|
|
|
Six Months Ended June 30,
|
||||||||||||||||
($ per boe)
|
2019
|
2018
|
Increase (Decrease)
|
|
2019
|
2018
|
Increase (Decrease)
|
||||||||||
Production Expense and Production Expense Rate
|
Expense
|
|
Rate
|
||||||||||||||
United States
|
$
|
286
|
|
$
|
304
|
|
(6
|
)%
|
|
$
|
5.04
|
|
$
|
5.77
|
|
(13
|
)%
|
International
|
$
|
96
|
|
$
|
119
|
|
(19
|
)%
|
|
$
|
5.40
|
|
$
|
4.91
|
|
10
|
%
|
|
Six Months Ended June 30,
|
|||||||||
(In millions)
|
2019
|
|
2018
|
|
Increase (Decrease)
|
|||||
Exploration Expenses
|
|
|
|
|
|
|||||
Unproved property impairments
|
$
|
64
|
|
|
$
|
81
|
|
|
(21
|
)%
|
Dry well costs
|
5
|
|
|
12
|
|
|
(58
|
)%
|
||
Geological and geophysical
|
9
|
|
|
14
|
|
|
(36
|
)%
|
||
Other
|
7
|
|
|
10
|
|
|
(30
|
)%
|
||
Total exploration expenses
|
$
|
85
|
|
|
$
|
117
|
|
|
(27
|
)%
|
|
Six Months Ended June 30,
|
||||||||||||||||
($ per boe)
|
2019
|
2018
|
Increase (Decrease)
|
|
2019
|
2018
|
Increase (Decrease)
|
||||||||||
DD&A Expense and DD&A Expense Rate
|
Expense
|
|
Rate
|
||||||||||||||
United States
|
$
|
1,075
|
|
$
|
1,084
|
|
(1
|
)%
|
|
$
|
18.98
|
|
$
|
20.56
|
|
(8
|
)%
|
International
|
$
|
72
|
|
$
|
104
|
|
(31
|
)%
|
|
$
|
4.06
|
|
$
|
4.31
|
|
(6
|
)%
|
|
Six Months Ended June 30,
|
|||||||||
(In millions)
|
2019
|
|
2018
|
|
Increase (Decrease)
|
|||||
United States
|
$
|
347
|
|
|
$
|
248
|
|
|
40
|
%
|
International
|
157
|
|
|
274
|
|
|
(43
|
)%
|
||
Segment income
|
504
|
|
|
522
|
|
|
(3
|
)%
|
||
Items not allocated to segments, net of income taxes
|
(169
|
)
|
|
(70
|
)
|
|
141
|
%
|
||
Net income
|
$
|
335
|
|
|
$
|
452
|
|
|
(26
|
)%
|
|
Six Months Ended June 30,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Sources of cash and cash equivalents
|
|
|
|
|
|
||
Operating activities
|
$
|
1,312
|
|
|
$
|
1,416
|
|
Disposal of assets, net of cash transferred to the buyer
|
69
|
|
|
1,183
|
|
||
Other
|
50
|
|
|
57
|
|
||
Total sources of cash and cash equivalents
|
$
|
1,431
|
|
|
$
|
2,656
|
|
Uses of cash and cash equivalents
|
|
|
|
||||
Additions to property, plant and equipment
|
$
|
(1,262
|
)
|
|
$
|
(1,300
|
)
|
Additions to other assets
|
42
|
|
|
(129
|
)
|
||
Acquisitions, net of cash acquired
|
—
|
|
|
(25
|
)
|
||
Purchases of common stock
|
(266
|
)
|
|
(11
|
)
|
||
Dividends paid
|
(82
|
)
|
|
(85
|
)
|
||
Other
|
(29
|
)
|
|
(2
|
)
|
||
Total uses of cash and cash equivalents
|
$
|
(1,597
|
)
|
|
$
|
(1,552
|
)
|
|
Six Months Ended June 30,
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
United States
|
$
|
1,292
|
|
|
$
|
1,252
|
|
International
|
15
|
|
|
22
|
|
||
Corporate
|
8
|
|
|
10
|
|
||
Total capital expenditures
|
1,315
|
|
|
1,284
|
|
||
Change in capital expenditure accrual
|
(53
|
)
|
|
16
|
|
||
Total use of cash and cash equivalents for property, plant and equipment
|
$
|
1,262
|
|
|
$
|
1,300
|
|
•
|
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;
|
•
|
liability resulting from litigation;
|
•
|
capital available for exploration and development;
|
•
|
the inability of any party to satisfy closing conditions or delays in execution with respect to our asset acquisitions and dispositions;
|
•
|
drilling and operating risks;
|
•
|
lack of, or disruption in, access to pipelines or other transportation methods;
|
•
|
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 2018 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other filings with the SEC.
|
(In millions)
|
Hypothetical Price Increase of 10%
|
|
Hypothetical Price Decrease of 10%
|
||||
Crude oil derivatives
|
$
|
(35
|
)
|
|
$
|
37
|
|
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)
|
||||||
04/01/2019 – 04/30/2019
|
1,950,289
|
|
|
$
|
17.56
|
|
|
1,939,827
|
|
|
$
|
751,964,257
|
|
05/01/2019 – 05/31/2019
|
8,701,662
|
|
|
$
|
15.48
|
|
|
8,699,788
|
|
|
$
|
617,286,263
|
|
06/01/2019 – 06/30/2019
|
4,988,831
|
|
|
$
|
13.43
|
|
|
4,988,831
|
|
|
$
|
550,286,171
|
|
Total
|
15,640,782
|
|
|
$
|
15.09
|
|
|
15,628,446
|
|
|
|
|
(a)
|
12,336 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, by $1.2 billion in December 2013, and by $950 million in July 2019 for a total authorized amount of $7.2 billion.
|
August 8, 2019
|
|
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
|
|
8-K
|
|
3.1
|
|
6/1/2018
|
|
3.2
|
|
10-Q
|
|
3.2
|
|
8/4/2016
|
|
3.3
|
|
10-K
|
|
3.3
|
|
2/28/2014
|
|
4.1
|
|
10-K
|
|
4.2
|
|
2/28/2014
|
|
10.1*
|
|
|
|
|
|
|
|
10.2*
|
|
|
|
|
|
|
|
10.3*
|
|
|
|
|
|
|
|
10.4*
|
|
|
|
|
|
|
|
31.1*
|
|
|
|
|
|
|
|
31.2*
|
|
|
|
|
|
|
|
32.1*
|
|
|
|
|
|
|
|
32.2*
|
|
|
|
|
|
|
|
101.INS*
|
|
XBRL Instance Document - the XBRL Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL 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.
|
|
|
|
|
|
2.
|
Vesting and Forfeiture of Restricted Shares.
|
2.
|
Vesting and Forfeiture of Restricted Units.
|
12.
|
Definitions. For purposes of this Award Agreement:
|
2.
|
Vesting and Forfeiture of Restricted Units.
|
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 8, 2019
|
|
/s/ Lee M. Tillman
|
|
|
|
Lee M. Tillman
|
|
|
|
Chairman, 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;
|
(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 8, 2019
|
|
/s/ Dane E. Whitehead
|
|
|
|
Dane E. Whitehead
|
|
|
|
Executive Vice President and Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
August 8, 2019
|
/s/ Lee M. Tillman
|
|
Lee M. Tillman
|
|
Chairman, President and Chief Executive Officer
|
|
|
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
August 8, 2019
|
/s/ Dane E. Whitehead
|
|
Dane E. Whitehead
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|