Business News: Marathon Oil Reports Second Quarter 2019 Results

$250 Million Share Repurchases Year-to-Date Supported by Continued Strong Free Cash Flow; Buyback Authorization Raised to $1.5 Billion

HOUSTON, TX (STL.News) – 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.”

NOTE: this is not the complete report.

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