MARATHON OIL CORPORATION 
Executive Overview Outlook Operations Market Conditions Results of Operations Critical Accounting Estimates Cash Flows Liquidity and Capital Resources Environmental Matters and Other Contingencies
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the preceding consolidated financial statements and notes in Item 1 .
Executive Overview
We are an independent exploration and production company, focused onU.S. resource plays:Eagle Ford inTexas , Bakken inNorth Dakota , STACK and SCOOP inOklahoma and Permian inNew Mexico andTexas . OurU.S. assets are complemented by our international operations in E.G. Our overall business strategy is to responsibly deliver competitive corporate return levels, free cash flow and cash returns to shareholders, all of which are sustainable and resilient through long-term commodity price cycles. We expect to achieve our business strategy by adherence to a disciplined reinvestment rate capital allocation framework that limits our capital expenditures relative to our expected cash flow from operations. Keeping our workforce safe, maintaining a strong balance sheet, responsibly meeting global energy demand with a focus on continuously improving environmental performance, serving as a trusted partner in our local communities and maintaining best in-class corporate governance standards are foundational to the execution of our strategy.
In
Compared to the same period of 2022, we experienced a decrease in revenue and net income from operations and operating cash flow, all of which were impacted by lower commodity prices. Total company net sales volumes increased during the first three months of 2023 when compared to prior year quarter. Below are certain key financial and operational highlights for the quarter:
Financial and operational results
•Our net income was$417 million in the first quarter of 2023 as compared to net income of$1.3 billion in the same period last year. Included in our financial results for the current quarter: •Revenues from contracts with customers decreased$194 million compared to the same quarter last year as a result of lower realized commodity prices, partially offset by increased sales.
•We recorded a net gain of
•Depreciation, depletion and amortization was
•Our provision for income taxes increased by
•Successfully integrated the Eagle Ford assets of Ensign into our existing operations in the resource play.
•In
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•Net sales volumes in the U.S. segment increased 22% compared to the same period
last year, primarily driven by increased production from the acreage acquired
from Ensign.
Prioritized return of capital to investors and maintained investment grade balance sheet
•In the first three months of 2023, we repurchased
•As of
•Paid$63 million of dividends, or$0.10 per share, during the first three months of 2023, compared to dividends paid of$0.07 per share during the first three months of 2022.
•All three primary credit rating agencies continue to rate us as investment
grade, with S&P reaffirming our credit rating in
Outlook
Capital Budget
InFebruary 2023 , we announced a 2023 capital budget of$1.9 billion to$2.0 billion that prioritizes free cash flow generation over production growth, consistent with our disciplined capital allocation framework. Approximately 60% of the 2023 capital budget is weighted to the first half of the year.
Operations
The following table presents a summary of our sales volumes for each of our
segments. Refer to Results of Operations for a price-volume analysis for
each of the segments.
Three Months Ended March 31,
Net Sales Volumes 2023 2022 Increase (Decrease)
United States (mboed) 341 280 22 %
International (mboed) 56 61 (8) %
Total (mboed) 397 341 16 %
United States
The following tables provide additional details regarding net sales volumes,
sales mix and operational drilling activity for our significant operations
within this segment. The increase in net sales volumes in our
Three Months Ended March 31,
Net Sales Volumes 2023 2022 Increase (Decrease)
Equivalent Barrels (mboed)
Eagle Ford 144 80 80 %
Bakken 95 118 (19) %
Oklahoma 55 51 8 %
Permian 45 20 125 %
Other United States 2 11 (82) %
Total United States 341 280 22 %
Three Months Ended March 31, 2023
Sales Mix - U.S. Resource Plays Eagle Ford Bakken Oklahoma Permian Total
Crude oil and condensate 52 % 66 % 22 % 55 % 52 %
Natural gas liquids 23 % 19 % 31 % 23 % 23 %
Natural gas 25 % 15 % 47 % 22 % 25 %
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Three Months Ended March 31,
Drilling Activity - U.S. Resource Plays 2023 2022
Gross Operated
Eagle Ford:
Wells drilled to total depth 35 29
Wells brought to sales 36 28
Bakken:
Wells drilled to total depth 18 14
Wells brought to sales 17 20
Oklahoma:
Wells drilled to total depth 1 3
Wells brought to sales 5 9
Permian:
Wells drilled to total depth 8 -
Wells brought to sales 8 -
International
Net sales volumes were lower in the first quarter of 2023 as compared to the
first quarter of 2022 primarily due to natural decline. In addition, timing of
sales impacted the sales volumes of our equity method investees in the quarter.
The following table provides details regarding net sales volumes for our
operations within this segment:
Three Months Ended March 31,
Net Sales Volumes 2023 2022 Increase (Decrease)
Equivalent Barrels (mboed)
Equatorial Guinea 56 61 (8) %
Equity Method Investees
LNG (mtd) 2,112 3,489 (39) %
Methanol (mtd) 1,378 982 40 %
Condensate and LPG (boed) 8,817 6,914 28 %
Market Conditions
Commodity prices are the most significant factor impacting our revenues,
profitability, operating cash flows, the amount of capital we invest in our
business, redemption of our debt, payment of dividends and funding of share
repurchases. Commodity prices experienced significant volatility in 2022 and
this has continued into 2023. Russia's invasion of Ukraine was a geopolitical
shock that caused energy prices to spike significantly higher in early to
mid-2022. However, Russian oil production has remained at higher levels than
expected, European gas shortages were averted as record levels of LNG were
imported into that market and an exceptionally warm winter in both the US and
Europe has refilled gas inventories to multi year highs causing prices to fall
back significantly. Economic headwinds, caused by increasing interest rates as
central banks continue to fight inflation, are a threat to demand growth as we
move forward, but demand growth in China could be a significant offset, as they
continue to emerge from strict COVID restrictions. Price volatility was also
exacerbated by ongoing OPEC+ petroleum supply limitations, strategic petroleum
reserve releases and economic sanctions involving producer countries. We
continue to expect commodity price volatility given the complex global dynamics
of supply and demand that exist in the market. Refer to Item 1A. Risk Factors in
our 2022 Annual Report on Form 10-K for further discussion on how volatility in
commodity prices could impact us.
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United States
The following table presents our average price realizations and the related
benchmarks for crude oil and condensate, NGLs and natural gas for the first
quarter of 2023 and 2022.
Three Months Ended March 31,
Increase
2023 2022 (Decrease)
Average Price Realizations(a)
Crude oil and condensate (per bbl)(b) $ 74.69 $ 94.43 (21) %
Natural gas liquids (per bbl) 24.27 37.32 (35) %
Natural gas (per mcf)(c) 2.95 4.79 (38) %
Benchmarks
WTI crude oil average of daily prices (per bbl)$ 75.99 $ 95.01 (20) %
Magellan
77.36 96.67 (20) %
Mont Belvieu NGLs (per bbl)(d) 25.33 38.24 (34) %
4.95 (31) %
(a)Excludes gains or losses on commodity derivative instruments.
(b)Inclusion of realized gains (losses) on crude oil derivative instruments
would have decreased average price realizations by $2.00 per bbl for the first
quarter of 2022.
(c)Inclusion of realized gains (losses) on natural gas derivative instruments
would have minimal impact on average price realizations for the first quarter of
2023 and 2022.
(d)Bloomberg Finance LLP : Y-grade Mix NGL of 55% ethane, 25% propane, 5% butane,
8% isobutane and 7% natural gasoline.
Crude oil and condensate - Price realizations may differ from benchmarks due to the quality and location of the product.
Natural gas liquids - The majority of our sales volumes are sold at reference to
Natural gas - A significant portion of our volumes are sold at bid-week prices, or first-of-month indices relative to our producing areas.
International (E.G.)
The following table presents our average price realizations and the related benchmark for crude oil for the first quarter of 2023 and 2022.
Three Months Ended
Increase
2023 2022 (Decrease)
Average Price Realizations
Crude oil and condensate (per bbl) $ 58.57 $ 59.63 (2) %
Natural gas liquids (per bbl) 1.00 1.00 - %
Natural gas (per mcf) 0.24 0.24 - %
Benchmark
Brent (Europe) crude oil (per bbl)(a)$ 81.17 $ 100.30 (19) %
(a)Average of monthly prices obtained from the
Crude oil and condensate - Alba field liquids production is primarily condensate. We generally sell our share of condensate in relation to the Brent crude benchmark.Alba Plant LLC processes the rich hydrocarbon gas which is supplied by the Alba field under a fixed-price long term contract.Alba Plant LLC extracts NGLs and condensate which is then sold byAlba Plant LLC at market prices, with our share of the revenue reflected in income from equity method investments on the consolidated statements of income.Alba Plant LLC delivers the processed dry natural gas to the Alba Unit Parties for distribution and sale to AMPCO and EG LNG. Natural gas liquids - Wet gas is sold toAlba Plant LLC at a fixed-price long term contract resulting in realized prices not tracking market price.Alba Plant LLC extracts and keeps NGLs, which are sold at market price, with our share of income fromAlba Plant LLC being reflected in the income from equity method investments on the consolidated statements of income. 25 -------------------------------------------------------------------------------- Table of Contents Natural gas - Dry natural gas, processed byAlba Plant LLC on behalf of the Alba Unit Parties, is sold by the Alba field to EG LNG and AMPCO at fixed-price contracts resulting in realized prices not tracking market price. The gas sales contracts between Alba Unit and EG LNG and AMPCO expire onDecember 31, 2023 and in 2026, respectively. We derive additional value from the equity investment in our downstream gas processing units EG LNG and AMPCO. EG LNG sells LNG on a market-based contract and AMPCO markets methanol at market prices. InMarch 2023 , we announced the signing of a HOA to progress the development of theEquatorial Guinea Regional Gas Mega Hub. The next phase involves processing Alba Unit gas under new contractual terms effectiveJanuary 1, 2024 that would increase our exposure to global LNG market prices. In addition to processing Alba Unit gas,Alba Plant LLC and EG LNG process third-party gas from the Alen field under a combination of a tolling and a market linked profit-sharing arrangement, the benefits of which are included in our respective share of income from equity method investees. This profit-sharing arrangement provides exposure to global LNG market prices.
Results of Operations
Three Months Ended
Revenues from contracts with customers are presented by segment in the table
below:
Three Months Ended March 31,
(In millions) 2023 2022
Revenues from contracts with customers
United States $ 1,503 $ 1,714
International 64 47
Segment revenues from contracts with customers $
1,567
Below is a price/volume analysis for each segment. Refer to the preceding
Operations and Market Conditions sections for additional detail related to our net sales volumes and average price realizations.
Increase (Decrease) Related to
Three Months Ended Three Months Ended
(In millions) March 31, 2022 Price Realizations Net Sales Volumes March 31, 2023
United States Price/Volume Analysis
Crude oil and condensate $ 1,341 $ (313) $ 157 $ 1,185
Natural gas liquids 216 (91) 44 169
Natural gas 151 (86) 74 139
Other sales 6 10
Total $ 1,714 $ 1,503
International Price/Volume Analysis
Crude oil and condensate $ 40 $ (1) $ 18 $ 57
Natural gas liquids 1 - - 1
Natural gas 5 - - 5
Other sales 1 1
Total $ 47 $ 64
Net gain (loss) on commodity derivatives in the first quarter of 2023 was a gain
of $15 million , compared to a net loss of $143 million for the same period in
2022. We have commodity derivative contracts which settle against the Henry Hub
index. We record commodity derivative gains/losses as the index pricing and
forward curves change each period. See Note 12 to the consolidated financial
statements for further information.
Income from equity method investments decreased $47 million in the first quarter
of 2023, when compared to the first quarter of 2022, primarily as a result of
lower prices realized by our equity method investees during the first quarter of
2023.
Production expenses increased $49 million in the first quarter of 2023 versus
the same period in 2022, primarily as a result of our acquisition of the Eagle
Ford assets of Ensign in December 2022 and inflationary pressures when compared
to the first quarter of 2022. In addition, in our International segment,
production expenses were higher due to planned major non-routine maintenance
that was completed in April 2023 .
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The following table provides production expense and production expense rates
(expense per boe) for each segment:
Three Months Ended
Increase Increase
($ in millions; rate in $ per boe) 2023 2022 (Decrease) 2023 2022 (Decrease)
Production Expense and Rate Expense Rate
United States $ 178 $ 141 26 % $ 5.82 $ 5.59 4 %
International $ 23 $ 11 109 % $ 4.54 $ 1.92 136 %
Shipping, handling and other operating decreased $23 million in the first
quarter of 2023 versus the same period in 2022, primarily as a result of costs
related to retrofit or replacement of equipment in the Bakken recorded in the
first quarter of 2022. See Note 21 to the consolidated financial statements
for further information.
Depreciation, depletion and amortization increased $97 million in the first
quarter of 2023 primarily as a result of higher production volumes. In addition,
the DD&A rate is impacted by capitalized costs and the sales volume mix between
fields.
Our segments apply the units-of-production method to the majority of assets,
including capitalized asset retirement costs; therefore, volumes have an impact
on DD&A expense. The following table provides DD&A expense and DD&A expense
rates for each segment:
Three Months Ended
Increase Increase
($ in millions; rate in $ per boe) 2023 2022 (Decrease) 2023 2022 (Decrease)
DD&A Expense and Rate Expense Rate
United States $ 505 $ 404 25 % $ 16.46 $ 16.02 3 %
International $ 12 $ 15 (20) % $ 2.41 $ 2.80 (14) %
Net interest and other increased $60 million in the first quarter of 2023
primarily as a result of increased interest expense associated with borrowings
on our Term Loan Facility and Revolving Credit Facility and the recording of a
$17 million gain on the settlement of interest rate swaps in the first quarter
of 2022. See Note 12 to the consolidated financial statements for further
information.
Provision for income taxes reflects an effective income tax rate of 21% in the
first quarter of 2023. The provision for income taxes in the first quarter of
2022 included a non-cash tax benefit of $685 million arising from the partial
release of a valuation allowance on certain U.S. and state deferred tax assets.
See Note 6 to the consolidated financial statements for further information.
Segment Income
Segment income represents income that excludes certain items not allocated to our operating segments, net of income taxes. See Note 5 to the consolidated financial statements for further details regarding items not allocated to the operating segments.
The following table reconciles segment income to net income:
Three Months Ended March 31,
(In millions) 2023 2022
United States $ 425 $ 661
International 89 115
Segment income 514 776
Items not allocated to segments, net of income taxes (97) 528
Net income $ 417 $ 1,304
United States segment income in the first quarter of 2023 was $425 million of
income versus $661 million of income for the same period in 2022. The decrease
in income was primarily due to lower price realizations, an increase in DD&A
expense and production expense, partially offset by an increase in net sales
volumes and realized net gains on commodity derivatives in the first quarter of
2023.
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International segment income in the first quarter of 2023 was $89 million of
income versus $115 million of income for the same period in 2022. The decrease
was primarily due to lower price realizations by our equity method investees.
Items not allocated to segments, net of income taxes in the first quarter of
2023 was a loss of $97 million versus $528 million of income for the same period
in 2022. The decrease was largely attributable to the partial release of a
valuation allowance on certain U.S. and state deferred tax assets in the first
quarter of 2022, which resulted in a non-cash deferred tax benefit of
$685 million . In addition, we had increased interest expense as a result of
outstanding borrowings on our Term Loan Facility and Revolving Credit Facility,
offset by unrealized net gains on commodity derivatives in the first quarter of
2023.
Critical Accounting Estimates
There have been no material changes or developments in the evaluation of the accounting estimates and the underlying assumptions or methodologies pertaining to our Critical Accounting Estimates disclosed in our Form 10-K for the year endedDecember 31, 2022 . Cash Flows The following table presents sources and uses of cash and cash equivalents: Three Months Ended March 31, (In millions) 2023 2022 Sources of cash and cash equivalents Net cash provided by operating activities $
865
Proceeds from revolving credit facility 175 - Equity method investments - return of capital - 7 Other 11 24 Total sources of cash and cash equivalents $ 1,051$ 1,098 Uses of cash and cash equivalents Additions to property, plant and equipment $
(532)
Repayments of revolving credit facility (175) - Debt repayment (70) - Shares repurchased under buyback programs (334) (592) Dividends paid (63) (52) Purchases of shares for tax withholding obligations (30) (21) Other (3) - Total uses of cash and cash equivalents $
(1,207)
Sources of cash and cash equivalents
Cash flows generated from operating activities during the first quarter of 2023
were 19% lower compared to 2022, primarily as a result of lower realized
commodity prices, partially offset by higher volumes resulting from our
acquisition of the Eagle Ford assets of Ensign in
During the first three months of 2023, we borrowed and repaid$175 million under our Revolving Credit Facility. See the Liquidity and Capital Resources section below for further information.
Uses of cash and cash equivalents
During the first three months of 2023, we repurchased approximately 13 million shares of our common stock pursuant to the share repurchase program at a cost of$334 million , paid dividends of$63 million and redeemed the$70 million 8.5% Senior Notes on the maturity date. Additionally, we repurchased$30 million of shares during the first three months of 2023 related to our tax withholding obligations associated with the vesting of employee restricted stock awards and restricted stock units; these repurchases do not impact our share repurchase program authorization. 28
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The following table shows capital expenditures by segment and reconciles to
additions to property, plant and equipment as presented in the consolidated
statements of cash flows:
Three Months Ended March 31,
(In millions) 2023 2022
United States $ 597 $ 346
International 2 (1)
Not Allocated to Segments (Corporate) 2 3
Total capital expenditures (accrued) 601 348
Change in capital expenditure accrual (69) (16)
Total use of cash and cash equivalents for property, plant and equipment
$
532
The increase in our capital expenditures for theU.S. segment in the first three months of 2023 compared to the same period in 2022 was largely driven by increased investment and drilling related to the Eagle Ford acreage we acquired from Ensign inDecember 2022 . Additionally, inflationary pressures related to oil field services, labor, drilling materials and equipment, as well as increased activity in the current quarter compared to the same period in 2022, contributed to the increase in capital expenditures.
Liquidity and Capital Resources
Capital Resources and Available Liquidity
Our main sources of liquidity are cash and cash equivalents, internally generated cash flow from operations, capital market transactions and our Revolving Credit Facility. AtMarch 31, 2023 , we had approximately$2.2 billion of liquidity consisting of$178 million in cash and cash equivalents and$2.1 billion available under our Revolving Credit Facility. Our working capital requirements are supported by our cash and cash equivalents and our Revolving Credit Facility. We may draw on our Revolving Credit Facility to meet short-term cash requirements or issue debt or equity securities through the shelf registration statement discussed below as part of our longer-term liquidity and capital management program. Because of the alternatives available to us as discussed above, we believe that our short-term and long-term liquidity are adequate to fund not only our current operations, but also our near-term and long-term funding requirements including our capital spending programs, defined benefit plan contributions, repayment of debt maturities, dividends and other amounts that may ultimately be paid in connection with contingencies. See Note 21 to the consolidated financial statements for further discussion of how our commitments and contingencies could affect our available liquidity. General economic conditions, commodity prices, and financial, business and other factors could affect our operations and our ability to access the capital markets. We maintain investment grade ratings at all three primary credit rating agencies. A downgrade in our credit ratings could increase our future cost of financing or limit our ability to access capital and could result in additional credit support requirements. We do not have any triggers on any of our corporate debt that would cause an event of default in the case of a downgrade of our credit ratings. See Item 1A. Risk Factors in our Annual Report on Form 10-K for the year endedDecember 31, 2022 for a discussion of how a downgrade in our credit ratings could affect us. We may incur additional debt in order to fund our working capital requirements, capital expenditures, acquisitions or development activities or for general corporate or other purposes. A higher level of indebtedness could increase the risk that our liquidity and financial flexibility deteriorates. See Item 1A. Risk Factors in our Annual Report on Form 10-K for the year endedDecember 31, 2022 for a further discussion of how our level of indebtedness could affect us.
Credit Arrangements and Borrowings
InNovember 2022 , we entered into a two-year$1.5 billion Term Loan Facility and borrowed the full amount thereunder inDecember 2022 . The Term Loan Facility can be prepaid without penalty.
As of
Both our Term Loan Facility and Revolving Credit Facility include a covenant requiring that our total debt to total capitalization ratio not exceed 65% as of the last day of the fiscal quarter. Our total debt-to-capital ratio was 26% at both March 31, 2023 and December 31, 2022. See Note 14 to the consolidated financial statements for further information.
Refer to our 2022 Annual Report on Form 10-K for a listing of our long-term debt maturities.
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On April 3, 2023 , we closed a $200 million remarketing to investors of
sub-series 2017A-1 bonds that are part of the $1 billion St. John the Baptist,
State of Louisiana revenue refunding bonds Series 2017. The bonds are subject to
an interest rate of 4.05% and a mandatory purchase date of July 1, 2026 .
Other sources of liquidity
We have an effective universal shelf registration statement filed with theSEC pursuant to which we, as a "well-known seasoned issuer" for purposes ofSEC rules, subject to market conditions, are permitted to issue and sell an indeterminate amount of various types of debt, equity securities and other capital instruments, if and when necessary or perceived by us to be opportune, in one or more public offerings.
Capital Requirements
Share Repurchase Program
Our Board of Directors has authorized a share repurchase program. Our remaining
authorization at
Subsequent to the quarter, we repurchased approximately
Dividends
OnApril 26, 2023 , our Board of Directors approved a dividend of$0.10 per share payableJune 12, 2023 to stockholders of record at the close of business onMay 17, 2023 . Income Taxes As described in Note 6 to the consolidated financial statements, the IRA was signed into law during 2022. Under current law and guidance, we do not anticipate being subject to the corporate book minimum tax in 2023. TheU.S. Treasury is expected to publish further guidance and regulations that will be relevant to scoping considerations and the calculation of minimum income tax liabilities. As this guidance is issued, we will continue to evaluate and assess the impact the IRA may have on our current and future period income taxes. If we conclude that we do trigger the minimum income tax, we may have to make estimated tax payments.
Other Contractual Cash Obligations
As ofMarch 31, 2023 , there are no material changes to our consolidated cash obligations to make future payments under existing contracts, as disclosed in our 2022 Annual Report on Form 10-K.
Environmental Matters and Other Contingencies
We have incurred and will continue to incur capital, operating and maintenance
and remediation expenditures as a result of environmental laws and regulations.
If these expenditures, as with all costs, are not ultimately offset by the
prices we receive for our products and services, our operating results will be
adversely affected. We believe that substantially all of our competitors must
comply with similar environmental laws and regulations. However, the specific
impact on each competitor may vary depending on a number of factors, including
the age and location of its operating facilities, marketing areas and production
processes. These laws generally provide for control of pollutants released into
the environment and require responsible parties to undertake remediation of
hazardous waste disposal sites. Penalties may be imposed for noncompliance.
Other than the items set forth in Part II - Item 1. Legal Proceedings , there
have been no significant changes to the environmental, health and safety matters
under Item 1. Business or Item 3. Legal Proceedings in our 2022 Annual Report on
Form 10-K. See Note 21 to the consolidated financial statements for a
description of other contingencies.
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Forward-Looking Statements
This Quarterly Report on Form 10-Q 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 (the "Exchange Act"). All statements, other than statements of historical fact, including without limitation statements regarding our future performance, business strategy, capital budget and allocations, reserve estimates, asset quality, production guidance, drilling plans, capital plans, future debt retirement, cost and expense estimates, asset acquisitions and dispositions, expected impacts of the IRA, tax assumptions and allowances, future financial position, statements regarding future commodity prices, anticipated benefits of the Ensign acquisition, and statements regarding management's other plans and objectives for future operations, are forward-looking statements. Words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "forecast," "future," "guidance," "intend," "may," "outlook," "plan," "positioned," "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 we believe that our assumptions concerning future events are reasonable, these expectations may not prove to be correct. A number of factors could cause results to differ materially from those indicated by such forward-looking statements including, but not limited to:
•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 or economic conditions in theU.S. and E.G., including changes in foreign currency exchange rates, interest rates, inflation rates and global and domestic market conditions;
•actions taken by the members of
•capital available for exploration and development;
•risks related to our hedging activities;
•voluntary or involuntary curtailments, delays or cancellations of certain drilling activities;
•well production timing;
•liabilities or corrective actions resulting from litigation, other proceedings and investigations or alleged violations of law or permits;
•drilling and operating risks;
•lack of, or disruption in, access to storage capacity, pipelines or other transportation methods;
•availability of drilling rigs, materials and labor, including the costs associated therewith;
•difficulty in obtaining necessary approvals and permits;
•the availability, cost, terms and timing of issuance or execution of, competition for, and challenges to, mineral licenses and leases and governmental and other permits and rights-of-way, and our ability to retain mineral licenses and leases;
•non-performance by third parties of their contractual obligations, including due to bankruptcy;
•administrative impediments or unexpected events that may impact dividends or other distributions, and the timing thereof, from our equity method investees;
•unforeseen hazards such as weather conditions, a health pandemic (including COVID-19), acts of war or terrorist acts and the governmental or military response thereto;
•the impacts of supply chain disruptions that began during the COVID-19 pandemic and the resulting inflationary environment;
•security threats, including cybersecurity threats and disruptions to our business and operations from breaches of our information technology systems, or breaches of the information technology systems, facilities and infrastructure of third parties with which we transact business;
•our ability to achieve, reach or otherwise meet initiatives, plans or ambitions with respect to ESG matters;
•our ability to pay dividends and make share repurchases;
•our ability to secure increased exposure to global LNG market prices;
•impacts of the IRA;
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Table of Contents •the risk that the Ensign assets do not perform consistent with our expectations, including with respect to future production or drilling inventory;
•other geological, operating and economic considerations; and
•the risk factors, forward-looking statements and challenges and uncertainties described in our 2022 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other filings with theSEC . All forward-looking statements included in this report are based on information available to us on the date of this report. Except as required by law, we undertake no obligation to revise or update any forward-looking statements as a result of new information, future events or otherwise. 32
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