Eighth Consecutive Quarter of Organic Free Cash Flow
HOUSTON, TX (STL.News) Marathon Oil Corporation (NYSE: MRO) today announced its 2020 capital expenditure budget in addition to its fourth quarter and full year 2019 financial results. The 2020 plan is intended to continue building on the Company’s two year track record of execution on its framework for success: corporate returns improvement, sustainable free cash flow generation, and the return of capital to shareholders.
2020 Capital Budget Highlights
- Disciplined total capital budget of $2.4 billion, down 11% from 2019; includes development capital budget of $2.2 billion, down 9% from 2019, and Resource Play Exploration (REx) capital of $200 million
- Underlying corporate returns improvement to continue outpacing production growth rates
- Forecasting sustainable organic free cash flow, post-dividend, at wide range of commodity prices with organic cash flow breakeven below $50/bbl WTI
- Cumulative two-year, post-dividend organic free cash flow of $600 million at flat $50/bbl WTI
- Cumulative two-year, post-dividend organic free cash flow of $2.1 billion at flat $60/bbl WTI
- Continue to prioritize return of capital to shareholders with a competitive dividend and $1.4 billion of share repurchase authorization outstanding
- Returned $1.4 billion of capital back to shareholders through dividends and share repurchases since beginning of 2018, representing 23% of operating cash flow; funded entirely by organic free cash flow generation
- 2020 annual U.S. oil production growth of 6% at the midpoint of guidance; comparable growth expected in 2021 on comparable development capital
- Resource Play Exploration (REx) capital spend of $200 million in 2020 primarily supports exploration and appraisal drilling in the Texas Delaware oil play and Louisiana Austin Chalk
Full Year and Fourth Quarter 2019 Results
Marathon Oil reported full year 2019 net income of $480 million, or $0.59 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 $611 million, or $0.75 per diluted share. Net operating cash flow was $2,749 million, or $2,885 million before changes in working capital.
Marathon Oil reported fourth quarter 2019 net loss of $20 million, or $(0.03) 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 $55 million, or $0.07 per diluted share. Net operating cash flow was $700 million, or $685 million before changes in working capital.
NOTE: this is NOT the complete release.