HOUSTON - Marathon Oil Corporation (NYSE: MRO) today reported a third quarter 2020 net loss of $317 million, or $0.40 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.
The adjusted net loss was $219 million, or $0.28 per diluted share. Net operating cash flow was $345 million, or $352 million before changes in working capital.
Highlights
Third quarter free cash flow generation of $180 million through strong execution across all elements of business
Third quarter capital expenditures of $176 million on successful and efficient resumption of drilling and completion activity; 25% reduction to completed well cost per lateral foot vs. 2019 average
Third quarter U.S. unit production cost of $4.32 per boe on strong cost control, a 13% reduction from 2019 average; reduced full year 2020 U.S. unit production cost guidance by more than 5%
Third quarter total Company oil production of 172,000 net bopd; full year 2020 total Company oil guidance unchanged at midpoint
Third quarter total Company oil-equivalent production of 370,000 net boed; full year oil-equivalent guidance raised by 5,000 net boed at midpoint
Ended third quarter with $4.1 billion of liquidity, including $3.0 billion undrawn revolving credit facility and $1.1 billion of cash and cash equivalents; investment grade credit rating at all three primary rating agencies, including recent outlook upgrade to stable by S&P
Subsequent to end of third quarter, reinstated quarterly base dividend at 3 cents per share and reduced gross debt by $100 million
Committed to transparent capital allocation framework that provides free cash flow visibility and makes meaningful cash flow available for investor-friendly purposes across a broad range of commodity prices
'While we continue to manage through commodity price volatility and the ongoing COVID-19 pandemic, third quarter represented an inflection point in what has been a transitional year, highlighted by $180 million of free cash flow generation on strong execution across all elements of our business,' said Chairman, President, and CEO Lee Tillman. 'We believe our unwavering focus on how we allocate capital, how we manage our cost structure, and how we execute is clearly paying off. Third quarter free cash flow more than funded the reinstatement of our base dividend and a gross debt reduction of $100 million, consistent with our objective to return capital to shareholders and enhance our balance sheet. We are well positioned to continue doing both in the current environment.'
'We have also committed to a transparent capital allocation framework that provides visibility to compelling free cash flow generation and the dedication of meaningful cash flow to investor-friendly purposes,' continued Tillman. 'Beyond just a commitment, we have a unique track record of delivery on this framework since 2018. We believe we have successfully positioned our company for industry leading capital efficiency and sustainable free cash flow generation at lower and more volatile mid-cycle pricing.'
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 future capital budgets and allocations (including development capital budget and resource play leasing and exploration spend), future performance, 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,' '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 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 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 the U.S. and Equatorial Guinea, including changes in foreign currency exchange rates, interest rates, inflation rates; actions taken by the members of the Organization of the Petroleum Exporting Countries (OPEC) and Russia affecting the production and pricing of crude oil and other global and domestic political, economic or diplomatic developments; capital available for exploration and development; risks related to the Company's hedging activities; voluntary or involuntary curtailments, delays or cancellations of certain drilling activities; well production timing; liability resulting from litigation; 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; non-performance by third parties of contractual obligations; unforeseen hazards such as weather conditions, a health pandemic (including COVID-19), acts of war or terrorist acts and the government or military response thereto; cyber-attacks; changes in safety, health, environmental, tax and other regulations, requirements or initiatives, including initiatives addressing the impact of global climate change, air emissions, or water management; other geological, operating and economic considerations and the risk factors, forward-looking statements and challenges and uncertainties described in the Company's 2019 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other public filings and press releases, available at https://ir.marathonoil.com/.
Contact:
Stephanie Gentry
Tel: 713-296-3307
MARATHON OIL CORPORATION 
