Business Description
Marathon Oil Corporation (MRO) is an independent exploration and production company that focuses on U.S. resource plays, including Eagle Ford in Texas, Bakken in North Dakota, STACK and SCOOP in Oklahoma, and the Permian in New Mexico and Texas, complemented by international activities in Equatorial Guinea (E.G.) . The company operates through two reportable segments: United States and International, engaging in the exploration, production, and marketing of crude oil and condensate, natural gas liquids (NGLs), and natural gas . Marathon Oil's revenues primarily come from the sale of these products under spot and term agreements with customers in the United States and E.G. .
- United States Segment - Engages in exploring, producing, and marketing crude oil and condensate, natural gas liquids (NGLs), and natural gas within the U.S.
- International Segment - Focuses on similar activities outside the U.S., including the production and marketing of LNG and methanol in Equatorial Guinea (E.G.).
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Key Metrics
| Revenue by Segment - Metric (USD Million) | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 |
|---|---|---|---|---|---|---|---|---|---|
| Crude Oil & Condensate (U.S.) | $1,185 | - | - | - | $1,180 | - | - | - | |
| NGLs (U.S.) | $169 | - | - | - | $151 | - | - | - | |
| Natural Gas (U.S.) | $139 | - | - | - | $86 | - | - | - | |
| Other (U.S.) | $10 | - | - | - | $5 | - | - | - | |
| Crude Oil & Condensate (Int'l) | $57 | - | - | - | $61 | - | - | - | |
| NGLs (Int'l) | $1 | - | - | - | $1 | - | - | - | |
| Natural Gas (Int'l) | $5 | - | - | - | $2 | - | - | - | |
| LNG (Int'l) | - | - | - | - | $51 | - | - | - | |
| Other (Int'l) | $1 | - | - | - | $1 | - | - | - | |
| Revenue by Geography - Metric (in million USD) | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 |
| United States Revenue | 1,503 | 1,440 | 1,700 | - | 1,422 | 1,551 | 1,615 | - | |
| International Revenue | 64 | 44 | 71 | - | 116 | 115 | 126 | - | |
| Total Revenue | 1,567 | 1,484 | 1,771 | - | 1,538 | 1,666 | 1,741 | - | |
| KPIs - Metric / Period | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 |
| **Net Sales Volumes of LNG (mmcfd)** | 78 | 109 | 72 | - | 78 | 109 | 72 | - | |
| **Average Realized Price of LNG ($/mcf)** | - | - | - | - | 7.21 | 8.52 | 10.76 | - | |
| **Drilling Activity (wells)** | 62 | 66 | 67 | 42 | 70 | 79 | 70 | - | |
| **Crude and Oil Condensate (mbbld)** | 186 | 189 | 198 | 184 | 183 | 188 | 198 | - | |
| **NGLs (mbbld)** | 78 | 91 | 90 | 86 | 81 | 90 | 99 | - | |
| **Natural Gas, Sold as Gas (mmcfd)** | 754 | 690 | 539 | 739 | 78 | 82 | 66 | - | |
| **Natural Gas, Sold as LNG (mmcfd)** | 232 | 186 | 217 | - | 78 | 109 | 72 | - | |
| **LNG (mtd)** | 2,112 | 1,716 | 1,670 | 1,669 | 388 | 0 | 0 | - | |
| **Methanol (mtd)** | 1,378 | 1,047 | 1,208 | 1,377 | 935 | 954 | 674 | - | |
| **Condensate and LPG (boed)** | 8,817 | 6,614 | 8,264 | 5,705 | 7,630 | 5,998 | 6,369 | - |
Executive Team
Questions to Ask Management
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Given your commitment to reduce gross debt to $4 billion while maintaining a 40% CFO shareholder return, can you elaborate on the specific steps you're taking to balance debt reduction with shareholder returns, especially in a potentially lower $50 to $60 WTI pricing environment?
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With your strict M&A criteria and high bar for acquisitions following the Ensign transaction, how do you plan to achieve growth and enhance your business organically, particularly in the Permian Basin where competition for assets is intense?
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As your Bakken and Eagle Ford assets mature, and considering that extending lateral lengths becomes more challenging each year, what strategies are in place to replenish your inventory and sustain production levels in these regions over the long term?
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Regarding the Gas Sales Agreement with the methanol plant expiring in 2026, what are your strategic plans for the EG Integrated Gas assets post-2026, and how do you anticipate this will impact your LNG and methanol operations?
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You mentioned exploring gas aggregation opportunities in Equatorial Guinea and cross-border with Cameroon; what are the key challenges you face in expanding your footprint there, and how confident are you in securing additional gas resources to maximize throughput at EG LNG?
Latest news
Recent developments and announcements about MRO.
Financial Actions
- Equity Awards: Marathon's equity awards were converted into ConocoPhillips' awards based on the merger agreement terms. Restricted stock units and stock options were adjusted according to the exchange ratio .
- Commercial Paper Program: Marathon terminated its commercial paper program and settled all outstanding obligations .
- Municipal Bonds: ConocoPhillips guaranteed $1 billion of Marathon's municipal bonds, with plans to assume all obligations by July 2026 .
- Financial Impact: The merger is expected to streamline operations and potentially enhance financial performance through synergies between the two companies.
- Operational Changes: Marathon's directors and officers were replaced by those from ConocoPhillips' merger subsidiary, indicating a shift in management and operational strategies .
Strategic Assets
Marathon Oil Corporation Acquisition by ConocoPhillips
On November 22, 2024, ConocoPhillips completed its acquisition of Marathon Oil Corporation through a merger. This transaction involved the conversion of Marathon's common stock into ConocoPhillips stock at an exchange ratio of 0.2550 shares of ConocoPhillips for each share of Marathon, along with cash for fractional shares .
Transaction Details
Potential Effects on Financials and Operations
This acquisition marks a significant consolidation in the energy sector, potentially affecting market dynamics and competitive positioning for both companies.
Note: This summary is based on the latest available information as of November 22, 2024.
Dividend Policy
ConocoPhillips to increase its ordinary base dividend by 34% starting in Q4 2024
ConocoPhillips has announced a significant change in its dividend policy. The company plans to increase its ordinary base dividend by 34%, raising it to 78 cents per share starting in the fourth quarter of 2024. This increase is independent of the ongoing transaction with Marathon Oil Corporation .
Corporate Leadership
Leadership Change
Who is leaving: All directors and officers of Marathon have ceased their positions due to the merger with ConocoPhillips. This was not due to any disagreements with the company .
Why: The changes are a result of the merger agreement between Marathon and ConocoPhillips, where Marathon became a wholly-owned subsidiary of ConocoPhillips .
Who is stepping up: The directors and officers of Merger Sub, a subsidiary of ConocoPhillips, have become the new directors and officers of Marathon .
CEO Change
The CEO of Marathon Oil Corporation has not left the company. However, as of November 22, 2024, Marathon Oil Corporation has become a wholly-owned subsidiary of ConocoPhillips following a merger. This change in control was part of a previously announced merger agreement where ConocoPhillips acquired Marathon Oil Corporation .