Marathon Oil Reports Second Quarter 2019 Results
HOUSTON, Aug. 7, 2019 /PRNewswire/ -- Marathon Oil Corporation (NYSE: MRO) today reported second quarter 2019 net income of $161 million, or $0.20 per diluted share, which includes the impact of certain items not typically represented in analysts' earnings estimates and that would otherwise affect comparability of results. Adjusted net income was $189 million, or $0.23 per diluted share. Net operating cash flow was $797 million, or $771 million before changes in working capital.
Highlights
-- $137 million of organic free cash flow post-dividend, bringing
year-to-date organic free cash flow to $217 million
-- $250 million of year-to-date share repurchases in addition to $82
million of dividend payments; approximately 25% of year-to-date net
operating cash flow returned to shareholders
-- Board of Directors approved increase of the share repurchase
authorization to $1.5 billion
-- Development capital spend of $636 million second quarter and $1.2
billion year-to-date; annual $2.4 billion development capital budget
remains unchanged
-- U.S. oil production averaged 192,000 net bopd during second quarter, up
17% from year-ago quarter, divestiture-adjusted, and above top end of
guidance range
-- Total Company oil production averaged 218,000 net bopd during second
quarter, up 14% from year-ago quarter, divestiture-adjusted
-- Closed on sale of U.K. business July 1, removing $966 million of asset
retirement obligations; coupled with second quarter close on sale of
remaining block in Kurdistan, these two complete country exits simplify
the international portfolio to the free cash flow generating integrated
business in Equatorial Guinea
-- Strong financial position with investment grade rating at all three
primary credit ratings agencies reflecting peer leading leverage metrics
and free cash flow breakeven oil price
"Second quarter featured exceptional operational performance across our advantaged multi-basin portfolio driving compelling bottom-line financial outcomes," said Chairman, President and CEO Lee Tillman. "Through differentiated execution, we're improving our corporate returns, generating meaningful free cash flow, and returning significant capital back to our shareholders. Already in 2019, we've returned about 25% of our net operating cash flow back to our shareholders. Since the beginning of 2018, we have repurchased $950 million of our own shares, funded entirely by post-dividend organic free cash flow, equating to about a 6% reduction in our share count. The refreshed $1.5 billion share repurchase authorization positions us well to continue executing against our well-defined strategic framework. This is our sixth consecutive quarter of organic free cash flow generation, and our underlying free cash flow momentum only continues to improve. We believe our unwavering commitment to capital discipline and low enterprise breakeven oil price delivers success across a wide range of commodity price environments."
United States (U.S.)
U.S. production averaged 332,000 net barrels of oil equivalent per day (boed) for second quarter 2019, including 192,000 net barrels of oil per day (bopd), both above the top end of the second quarter guidance ranges. Oil production was up 17% from the year-ago quarter on a divestiture-adjusted basis. U.S. unit production costs were $4.89 per barrel of oil equivalent (boe), down 14% from the year-ago quarter, the lowest quarterly average unit production costs since becoming an independent exploration and production company in 2011.
EAGLE FORD: Marathon Oil's Eagle Ford production averaged 109,000 net boed in the second quarter 2019. The Company brought 41 gross Company-operated wells to sales in the quarter. Second quarter activity featured impressive results across the Company's acreage position. In Karnes County, a four-well pad achieved an average 30-day initial production (IP) rate of 3,230 boed (67% oil), establishing a new pad record for the Company in the Eagle Ford. The Company continued to deliver strong results from the expanded core of Atascosa County, where 15 wells achieved an average 30-day IP rate of 1,860 boed (81% oil). As the Company continues its efforts to uplift performance outside of the Karnes and Atascosa core, enhanced completion techniques were successfully applied in Gonzales County, where a six-well pad achieved an average 30-day IP rate of 1,600 boed (70% oil). 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: Marathon Oil's Bakken production averaged 104,000 net boed in the second quarter 2019. The Company brought 30 gross Company-operated wells to sales, balanced between Myrmidon and Hector. The Company continues to deliver impressive capital efficiency, highlighted by a six-well pad in Myrmidon that delivered an average 30-day IP rate of 3,160 boed (78% oil) at an average completed well cost of $5.3 million. The average completed well cost for all of Marathon Oil's second quarter wells was $5.2 million, down approximately 15% in comparison to the 2018 average.
OKLAHOMA: Marathon Oil's Oklahoma production averaged 82,000 net boed in the second quarter 2019. The Company brought 18 gross Company-operated wells to sales. Marathon Oil continues to deliver strong results from the overpressured STACK, where the eight-well per section Mike Stroud infill achieved an average 30-day IP rate of 2,480 boed (38% oil) with average completed well costs more than 30% below the previously drilled parent well. The Company continues to make significant progress in reducing its cost structure and improving efficiencies. Marathon Oil's two most recent overpressured STACK infills achieved an average completed well cost of $6.3 million normalized to a 10,000 foot lateral.
NORTHERN DELAWARE: Marathon Oil's Northern Delaware production averaged 28,000 net boed in the second quarter 2019. The Company brought 16 gross Company-operated wells to sales, including a mix of development and delineation wells in both the Malaga and Red Hills areas. Marathon Oil continues to make significant progress in reducing its cost structure and improving margins, with second quarter cash costs down approximately 10% sequentially 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, where 11 development wells achieved an average 30-day IP rate of 1,520 boed (63% oil), or 345 boed per one thousand foot lateral, with completed well costs per lateral foot 5% below the 2018 average.
International
International production averaged 103,000 net boed for second quarter 2019. During the quarter, E.G. production returned to normal levels after successful completion of the planned triennial turnaround during first quarter 2019. Second quarter 2019 International unit production costs averaged $4.72 per boe.
During the second quarter, the Company closed on the sale of its 15% participating interest in the Atrush Block in Kurdistan, marking a complete country exit. Subsequent to quarter end on July 1, the Company closed on the sale of its U.K business, representing the tenth country exit since 2013.
Excluding Kurdistan and U.K operations, second quarter international production averaged 91,000 net boed with unit production costs of $2.21 per boe. As of July 1, the Company's international operations are limited to the integrated business in Equatorial Guinea.
Cash Flow, Development Capital and Resource Capture
Net cash provided by operations was $797 million during second quarter 2019, or $771 million before changes in working capital.
Second quarter development capital expenditures were $636 million, with year-to-date development capital of $1.2 billion. The Company's 2019 development capital budget remains unchanged at $2.4 billion.
Outside of the development capital budget, second quarter resource play leasing and exploration (REx) capital expenditures were $37 million, with year-to-date expenditures of $74 million. The Company's 2019 REx capital budget remains unchanged at $200 million.
Organic free cash flow during second quarter totaled $137 million post-dividend, bringing year-to-date organic free cash flow generation to $217 million.
Production Guidance
For third quarter 2019, the Company forecasts total U.S. oil production of 190,000 to 200,000 net bopd. Third quarter 2019 international oil production guidance is 12,000 to 16,000 net bopd, reflecting both the U.K. and Kurdistan asset divestitures. Adjusted full year 2019 production guidance now excludes divested U.K. and Kurdistan volumes for the second half of 2019, but otherwise remains unchanged. There is no change to annual divestiture-adjusted oil production growth guidance of 10% for total Company and 12% for U.S.
Corporate
The Company has executed $250 million of year-to-date share repurchases, returning additional capital to shareholders beyond the $82 million of year-to-date dividend payments. On a year-to-date basis, the Company has returned approximately 25% of net operating cash flow back to shareholders. Since the beginning of 2018, Marathon Oil has repurchased $950 million of its own shares, representing approximately 6% of its outstanding share count, funded entirely by post-dividend organic free cash flow generation of over $1 billion over the same period. The board of directors authorized an increase in the remaining share repurchase authorization to a total of $1.5 billion, representing an increase in authorization of $950 million.
Total liquidity as of June 30 was approximately $4.4 billion, which consisted of $1.0 billion in cash and cash equivalents and an undrawn revolving credit facility of $3.4 billion. End of quarter cash and cash equivalents reflect cash balances classified as held for sale associated with U.K. properties, but do not include the $95 million of sales proceeds received upon July 1 close.
Marathon Oil's credit rating was upgraded to investment grade by Moody's Investor's Service on April 24. The Company's credit rating was also upgraded from BBB- to BBB by S&P on June 19. Marathon Oil is rated investment grade at all three primary credit ratings agencies.
The adjustments to net income for second quarter 2019 totaled $28 million before tax, primarily due to impairments and loss on sale associated with asset dispositions, partially offset by the income impact associated with unrealized gains on derivative instruments.
As of August 5, 2019, the Company's open crude hedge positions for 2019 include an average of 80,000 bopd at a weighted average floor price of $56.75 per bbl and a weighted average ceiling price of $74.19 per bbl, hedged through three-way collars. The Company has also hedged 19,945 bopd of 2020 oil production at a weighted average floor price of $55.00 per bbl.
A slide deck and Quarterly Investor Packet will be posted to the Company's website following this release today, Aug. 7. On Thursday, Aug. 8, at 9:00 a.m. ET, the Company will conduct a question and answer webcast/call, which will include forward-looking information. The live webcast, replay and all related materials will be available at https://www.marathonoil.com/Investors.
Definitions
Organic free cash flow - Operating cash flow before working capital (excluding exploration costs other than well costs), less development capital expenditures, less dividends, plus other.
Non-GAAP Measures
In analyzing and planning for its business, Marathon Oil supplements its use of GAAP financial measures with non-GAAP financial measures, including adjusted net income, adjusted net income per share, net cash provided by operations before changes in working capital, and organic free cash flow because the Company believes this information is useful to investors to help evaluate the Company's financial performance between periods and to compare the Company's performance to certain competitors. Management also uses net cash provided by operations before changes in working capital to demonstrate the Company's ability to internally fund capital expenditures, pay dividends and service debt. The Company considers adjusted net income and adjusted net income per share as another way to meaningfully represent the Company's operational performance for the period presented; consequently, it excludes the impact of mark-to-market accounting, impairment charges, dispositions, pension settlements, and other items that could be considered "non-operating" or "non-core" in nature. These non-GAAP financial measures reflect an additional way of viewing aspects of the business that, when viewed with GAAP results may provide a more complete understanding of factors and trends affecting the business and are a useful tool to help management and investors make informed decisions about Marathon Oil's financial and operating performance. These measures should not be considered substitutes for their most directly comparable GAAP financial measures. A reconciliation to their most directly comparable GAAP financial measures can be found in our investor package on our website at www.marathonoil.com and in the tables below. Marathon Oil strongly encourages investors to review the Company's consolidated financial statements and publicly filed reports in their entirety and not rely on any single financial measure.
Forward-looking Statements
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, including without limitation statements regarding the Company's 2019 capital budget and allocations (including development capital budget and resource play leasing and exploration spend), future performance, organic free cash flow, free cash flow, corporate-level cash returns on invested capital, business strategy, asset quality, drilling plans, production guidance, cash margins, asset sales and acquisitions, leasing and exploration activities, production, oil growth and other plans and objectives for future operations, are forward-looking statements. Words such as "anticipate," "believe," "could," "estimate," "expect," "forecast," "guidance," "intend," "may," "plan," "project," "seek," "should," "target," "will," "would," or similar words may be used to identify forward-looking statements; however, the absence of these words does not mean that the statements are not forward-looking. While the Company believes its assumptions concerning future events are reasonable, a number of factors could cause actual results to differ materially from those projected, including, but not limited to: conditions in the oil and gas industry, including supply/demand levels and the resulting impact on price; changes in expected reserve or production levels; changes in political or economic conditions in the jurisdictions in which the Company operates; risks related to the Company's hedging activities; capital available for exploration and development; drilling and operating risks; well production timing; availability of drilling rigs, materials and labor, including associated costs; 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 government 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 the Company's 2018 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other public filings and press releases, available at www.marathonoil.com. Except as required by law, the Company undertakes no obligation to revise or update any forward-looking statements as a result of new information, future events or otherwise.
Media Relations Contact:
Lee Warren: 713-296-4103
Investor Relations Contacts:
Guy Baber: 713-296-1892
John Reid: 713-296-4380
Consolidated
Statements of Income
(Unaudited)
Three Months Ended
June 30 Mar. 31 June 30
(In millions, except
per share data) 2019 2019 2018
---
Revenues and other
income:
Revenues from
contracts with
customers $
1,381 $
1,200 $
1,447
Net gain (loss) on
commodity
derivatives 16 (91) (152)
Income from equity
method investments 31 11 60
Net gain (loss) on
disposal of assets (8) 42 50
Other income 13 35 12
Total revenues and
other income 1,433 1,197 1,417
Costs and expenses:
Production 193 187 205
Shipping, handling
and other operating 170 154 126
Exploration 26 59 65
Depreciation,
depletion and
amortization 605 554 612
Impairments 18 6 34
Taxes other than
income 79 72 65
General and
administrative 87 94 105
Total costs and
expenses 1,178 1,126 1,212
Income from
operations 255 71 205
Net interest and
other (64) (49) (65)
Other net periodic
benefit costs 2 5
Income before income
taxes 193 27 140
Provision (benefit)
for income taxes 32 (147) 44
Net income $
161 $
174 $
96
Adjusted Net Income
Net income $
161 $
174 $
96
Adjustments for
special items (pre-
tax):
Net (gain) loss on
disposal of assets 8 (42) (50)
Proved property
impairments 18 6 34
Pension settlement 2 2
Unrealized (gain)
loss on derivative
instruments (11) 113 45
Other 11 12 (8)
Benefit for income
taxes related to
special items (7) 7
Adjustments for
special items 28 82 30
Adjusted net income
(a) $
189 $
256 $
126
---
Per diluted share:
Net income $
0.20 $
0.21 $
0.11
Adjusted net income
(a) $
0.23 $
0.31 $
0.15
Weighted average
diluted shares 814 820 855
---
(a) Non-GAAP financial measure.
See "Non-GAAP Measures"
above for further
discussion.
Supplemental
Statistics
(Unaudited)
Three Months Ended
June 30 Mar. 31 June 30
(In millions) 2019 2019 2018
---
Segment income
United States $
215 $
132 $
123
International 96 61 142
Segment income 311 193 265
Not allocated to
segments (150) (19) (169)
Net income $
161 $
174 $
96
---
Exploration expenses
United States $
26 $
59 $
64
International 1
Total $
26 $
59 $
65
---
Cash flows
Net cash provided by
operating activities $
797 $
515 $
767
Minus: changes in
working capital 26 (157) (82)
Net cash provided by
operations before
changes in working
capital (a) $
771 $
672 $
849
---
Cash additions to
property, plant and
equipment $
(647) $
(615) $
(638)
---
(a) Non-GAAP financial measure.
See "Non-GAAP Measures"
above for further
discussion.
Supplemental Three Months Six Months
Statistics Ended Ended
(Unaudited)
(In
millions) June 30, 2019 June 30, 2019
---
Organic
Free
Cash
Flow
Net
cash
provided
by
operating
activities $
797 $
1,312
Minus:
changes
in
working
capital 26 (131)
Minus:
exploration
costs
other
than
well
costs (6) (16)
Development
capital
expenditures (636) (1,205)
Dividends (41) (82)
EG
LNG
return
of
capital
and
other 37 45
Organic
free
cash
flow
(a) $
137 $
217
---
(a) Non-GAAP financial measure.
See "Non-GAAP Measures"
above for further
discussion.
Supplemental
Statistics
(Unaudited) Three Months Ended
June 30 Mar. 31 June 30
(mboed) 2019 2019 2018
---
Net production
United States 332 296 298
International 103 92 121
Total net
production 435 388 419
---
Supplemental
Statistics
(Unaudited) Three Months Ended
June 30 Mar. 31 June 30
(mboed) 2019 2019 2018
---
Net production
United States 332 296 298
Less:
Divestitures
(a) 1 6
Total
divestiture-
adjusted
United States 331 296 292
International 103 92 121
Less:
Divestitures
(b) 12 14 18
Total
divestiture-
adjusted
International 91 78 103
Total net
production
divestiture-
adjusted
(a)(b) 422 374 395
---
(a) The Company closed on the sale of
certain United States non-core
conventional assets primarily in
the Gulf of Mexico in third
quarter 2018 and first quarter
2019. The production volumes
relating to these dispositions
have been removed from all
corresponding prior periods to
derive the divestiture-adjusted
United States net production.
(b) Divestitures include volumes
associated with the sale of our
U.K. business, which closed in
third quarter 2019, the sale of
our non-operated interest in
Kurdistan, which closed in second
quarter 2019 and third quarter
2018. These production volumes
have been removed from historical
periods above in arriving at total
divestiture-adjusted
International net production.
Supplemental
Statistics
(Unaudited) Three Months Ended
June 30 Mar. 31 June 30
2019 2019 2018
United States -
net sales
volumes
Crude oil and
condensate
(mbbld) 190 177 168
Eagle Ford 61 61 63
Bakken 88 79 69
Oklahoma 21 16 18
Northern
Delaware 15 15 11
Other United
States (a) 5 6 7
Natural gas
liquids
(mbbld) 64 55 57
Eagle Ford 25 23 22
Bakken 8 7 7
Oklahoma 24 18 24
Northern
Delaware 6 6 3
Other United
States (a) 1 1 1
Natural gas
(mmcfd) 459 392 435
Eagle Ford 139 127 127
Bakken 42 36 35
Oklahoma 223 173 230
Northern
Delaware 36 33 18
Other United
States (a) 19 23 25
Total United
States (mboed) 330 297 298
---
International -
net sales
volumes
Crude oil and
condensate
(mbbld) 30 23 32
Equatorial
Guinea 20 12 18
United Kingdom 8 9 10
Other
International 2 2 4
Natural gas
liquids
(mbbld) 10 8 12
Equatorial
Guinea 10 8 11
United Kingdom 1
Natural gas
(mmcfd) 403 342 461
Equatorial
Guinea 392 330 443
United Kingdom
(b) 11 12 18
Total
International
(mboed) 107 88 121
Total Company -
net sales
volumes
(mboed) 437 385 419
---
Net sales
volumes of
equity method
investees
LNG (mtd) 5,321 4,636 6,141
Methanol (mtd) 1,134 1,003 1,316
Condensate and
LPG (boed) 11,080 9,890 12,689
---
(a) The three months ended June 30,
2018 includes sales volumes
from the sale of certain United
States non-core conventional
assets primarily in the Gulf of
Mexico which closed in third
quarter 2018 and first quarter
2019.
(b) Includes natural gas acquired
for injection and subsequent
resale.
Supplemental
Statistics
(Unaudited)
Three Months Ended
June 30 Mar. 31 June 30
2019 2019 2018
United States -
average price
realizations (a)
Crude oil and
condensate ($ per
bbl) (b) $
59.18 $
54.05 $
66.03
Eagle Ford 63.10 57.69 68.77
Bakken 56.84 52.15 64.41
Oklahoma 58.66 53.39 66.90
Northern Delaware 55.33 48.97 60.01
Other United States
(c) 66.21 56.19 64.42
Natural gas liquids
($ per bbl) $
14.60 $
15.66 $
22.09
Eagle Ford 13.19 17.05 22.68
Bakken 18.68 16.17 25.52
Oklahoma 14.39 13.66 20.75
Northern Delaware 15.02 15.27 19.10
Other United States
(c) 17.25 18.92 25.62
Natural gas ($ per
mcf) (d) $
1.89 $
2.93 $
2.18
Eagle Ford 2.51 2.99 2.82
Bakken 1.70 3.77 2.46
Oklahoma 1.78 2.90 1.84
Northern Delaware 0.18 1.93 1.48
Other United States
(c) 2.26 2.89 2.11
---
International -
average price
realizations
Crude oil and
condensate ($ per
bbl) $
58.21 $
53.93 $
66.12
Equatorial Guinea 54.38 44.36 60.30
United Kingdom 68.40 67.62 77.15
Other International 55.83 47.76 64.73
Natural gas liquids
($ per bbl) $
1.67 $
1.96 $
2.91
Equatorial Guinea (d) 1.00 1.00 0.99
United Kingdom 37.63 38.10 43.20
Natural gas ($ per
mcf) $
0.35 $
0.48 $
0.52
Equatorial Guinea (d) 0.24 0.24 0.24
United Kingdom 4.25 7.02 7.39
---
Benchmark
WTI crude oil (per
bbl) $
59.91 $
54.90 $
67.91
Brent (Europe) crude
oil (per bbl) (e) $
68.92 $
63.17 $
74.50
Henry Hub natural gas
(per mmbtu) (f) $
2.64 $
3.15 $
2.80
---
(a) Excludes gains or losses on
commodity derivative instruments.
(b) Inclusion of realized gains
(losses) on crude oil derivative
instruments would have affected
average price realizations by
$0.32, $1.10 and $(7.04) for
second quarter 2019, first quarter
2019, and second quarter 2018.
(c) Includes sales volumes from the
sale of certain non-core proved
properties in our International
and United States segments.
(d) Represents fixed prices under long-
term contracts with Alba Plant
LLC, Atlantic Methanol Production
Company LLC and/or Equatorial
Guinea LNG Holdings Limited, which
are equity method investees. The
Alba Plant LLC processes the NGLs
and then sells secondary
condensate, propane, and butane at
market prices. Marathon Oil
includes its share of income from
each of these equity method
investees in the International
segment.
(e) Average of monthly prices obtained
from Energy Information
Administration website.
(f) Settlement date average per mmbtu.
Q3 2019 Oil Production (mbbld) Equivalent Production (mboed)
Production Guidance
---
Q3 2019 Q2 2019 Q3 2018 Q3 2019 Q2 2019 Q3 2018
---
Low High Divestiture- Divestiture- Low High Divestiture- Divestiture-
Adjusted (a) Adjusted (a) Adjusted (a) Adjusted (a)
Net production
United States 190 200 192 172 330 340 331 302
International 12 16 16 17 80 90 91 99
Total net production 202 216 208 189 410 430 422 401
---
Full Year 2019 Oil Production (mbbld) Equivalent Production (mboed)
Production Guidance
---
2019 2018 2019 2018
---
Low (b) High (b) Divestiture- Low (b) High (b) Divestiture-
Adjusted (a) Adjusted (a)
Net production
United States 185 195 169 320 330 294
International 18 22 17 85 95 98
Total net production 203 217 186 405 425 392
---
(a) Divestiture-adjusted, and also
removes volumes associated with
the sale of our U.K. business
which closed on July 1, 2019.
(b) Annual 2019 guidance includes
1H19 contributions from
divested assets.
The following table sets forth outstanding derivative contracts as of August 5, 2019, and the weighted average prices for those contracts:
2019 2020 2021
Crude Oil Third Fourth Quarter Full Year Full Year
Quarter
---
NYMEX WTI Three-Way Collars (a)
Volume (Bbls/day) 80,000 80,000 19,945
Weighted average price per Bbl:
Ceiling $
74.19 $
74.19 $
67.55
Floor $
56.75 $
56.75 $
55.00
Sold put $
49.50 $
49.50 $
47.50
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.
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SOURCE Marathon Oil Corporation
