(Mark One) | |
[X] | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly Period Ended June 30, 2014 |
[ ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _____ to _____ |
Delaware | 25-0996816 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Large accelerated filer þ | Accelerated filer o |
Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company o |
INDEX | ||
Page | ||
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
(In millions, except per share data) | 2014 | 2013 | 2014 | 2013 | |||||||||||
Revenues and other income: | |||||||||||||||
Sales and other operating revenues, including related party | $ | 2,270 | $ | 2,513 | $ | 4,419 | $ | 4,961 | |||||||
Marketing revenues | 618 | 497 | 1,159 | 929 | |||||||||||
Income from equity method investments | 120 | 77 | 257 | 195 | |||||||||||
Net gain (loss) on disposal of assets | (87 | ) | (107 | ) | (85 | ) | 2 | ||||||||
Other income | 20 | 10 | 40 | 19 | |||||||||||
Total revenues and other income | 2,941 | 2,990 | 5,790 | 6,106 | |||||||||||
Costs and expenses: | |||||||||||||||
Production | 562 | 552 | 1,104 | 1,085 | |||||||||||
Marketing, including purchases from related parties | 614 | 494 | 1,156 | 927 | |||||||||||
Other operating | 101 | 70 | 204 | 168 | |||||||||||
Exploration | 145 | 125 | 218 | 582 | |||||||||||
Depreciation, depletion and amortization | 680 | 626 | 1,323 | 1,257 | |||||||||||
Impairments | 4 | — | 21 | 38 | |||||||||||
Taxes other than income | 109 | 93 | 204 | 175 | |||||||||||
General and administrative | 139 | 159 | 326 | 322 | |||||||||||
Total costs and expenses | 2,354 | 2,119 | 4,556 | 4,554 | |||||||||||
Income from operations | 587 | 871 | 1,234 | 1,552 | |||||||||||
Net interest and other | (76 | ) | (67 | ) | (125 | ) | (140 | ) | |||||||
Income from continuing operations before income taxes | 511 | 804 | 1,109 | 1,412 | |||||||||||
Provision for income taxes | 151 | 563 | 351 | 1,013 | |||||||||||
Income from continuing operations | 360 | 241 | 758 | 399 | |||||||||||
Discontinued operations | 180 | 185 | 931 | 410 | |||||||||||
Net income | $ | 540 | $ | 426 | $ | 1,689 | $ | 809 | |||||||
Per Share Data | |||||||||||||||
Basic: | |||||||||||||||
Income from continuing operations | $0.53 | $0.34 | $1.11 | $0.56 | |||||||||||
Discontinued operations | $0.27 | $0.26 | $1.36 | $0.58 | |||||||||||
Net income | $0.80 | $0.60 | $2.47 | $1.14 | |||||||||||
Diluted: | |||||||||||||||
Income from continuing operations | $0.53 | $0.34 | $1.10 | $0.56 | |||||||||||
Discontinued operations | $0.27 | $0.26 | $1.36 | $0.58 | |||||||||||
Net income | $0.80 | $0.60 | $2.46 | $1.14 | |||||||||||
Dividends | $0.19 | $0.17 | $0.38 | $0.34 | |||||||||||
Weighted average common shares: | |||||||||||||||
Basic | 676 | 710 | 684 | 709 | |||||||||||
Diluted | 679 | 714 | 688 | 713 |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
(In millions) | 2014 | 2013 | 2014 | 2013 | |||||||||||
Net income | $ | 540 | $ | 426 | $ | 1,689 | $ | 809 | |||||||
Other comprehensive income (loss) | |||||||||||||||
Postretirement and postemployment plans | |||||||||||||||
Change in actuarial loss and other | (13 | ) | 133 | (43 | ) | 146 | |||||||||
Income tax benefit (provision) | 5 | (49 | ) | 15 | (54 | ) | |||||||||
Postretirement and postemployment plans, net of tax | (8 | ) | 84 | (28 | ) | 92 | |||||||||
Foreign currency translation and other | |||||||||||||||
Unrealized gain (loss) | 1 | (3 | ) | 1 | (4 | ) | |||||||||
Income tax benefit (provision) | (1 | ) | 1 | (1 | ) | 1 | |||||||||
Foreign currency translation and other, net of tax | — | (2 | ) | — | (3 | ) | |||||||||
Other comprehensive income (loss) | (8 | ) | 82 | (28 | ) | 89 | |||||||||
Comprehensive income | $ | 532 | $ | 508 | $ | 1,661 | $ | 898 |
June 30, | December 31, | ||||||
(In millions, except per share data) | 2014 | 2013 | |||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 1,169 | $ | 264 | |||
Receivables | 2,042 | 2,134 | |||||
Inventories | 404 | 364 | |||||
Other current assets | 211 | 172 | |||||
Current assets held for sale | 392 | 41 | |||||
Total current assets | 4,218 | 2,975 | |||||
Equity method investments | 1,184 | 1,201 | |||||
Property, plant and equipment, less accumulated depreciation, | |||||||
depletion and amortization of $20,207 and $21,895 | 27,824 | 28,145 | |||||
Goodwill | 457 | 499 | |||||
Other noncurrent assets | 1,088 | 1,153 | |||||
Noncurrent assets held for sale | 1,164 | 1,647 | |||||
Total assets | $ | 35,935 | $ | 35,620 | |||
Liabilities | |||||||
Current liabilities: | |||||||
Commercial paper | $ | — | $ | 135 | |||
Accounts payable | 2,439 | 2,206 | |||||
Payroll and benefits payable | 121 | 240 | |||||
Accrued taxes | 193 | 1,445 | |||||
Other current liabilities | 147 | 214 | |||||
Long-term debt due within one year | 68 | 68 | |||||
Current liabilities held for sale | 1,006 | 25 | |||||
Total current liabilities | 3,974 | 4,333 | |||||
Long-term debt | 6,362 | 6,394 | |||||
Deferred tax liabilities | 2,525 | 2,492 | |||||
Defined benefit postretirement plan obligations | 668 | 604 | |||||
Asset retirement obligations | 1,804 | 2,009 | |||||
Deferred credits and other liabilities | 392 | 401 | |||||
Noncurrent liabilities held for sale | 342 | 43 | |||||
Total liabilities | 16,067 | 16,276 | |||||
Commitments and contingencies | |||||||
Stockholders’ Equity | |||||||
Preferred stock – no shares issued or outstanding (no par value, | |||||||
26 million shares authorized) | — | — | |||||
Common stock: | |||||||
Issued – 770 million and 770 million shares (par value $1 per share, | |||||||
1.1 billion shares authorized) | 770 | 770 | |||||
Securities exchangeable into common stock – no shares issued or | |||||||
outstanding (no par value, 29 million shares authorized) | — | — | |||||
Held in treasury, at cost – 97 million and 73 million shares | (3,718 | ) | (2,903 | ) | |||
Additional paid-in capital | 6,530 | 6,592 | |||||
Retained earnings | 16,564 | 15,135 | |||||
Accumulated other comprehensive loss | (278 | ) | (250 | ) | |||
Total stockholders' equity | 19,868 | 19,344 | |||||
Total liabilities and stockholders' equity | $ | 35,935 | $ | 35,620 |
Six Months Ended | |||||||
June 30, | |||||||
(In millions) | 2014 | 2013 | |||||
Increase (decrease) in cash and cash equivalents | |||||||
Operating activities: | |||||||
Net income | $ | 1,689 | $ | 809 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Discontinued operations | (931 | ) | (410 | ) | |||
Deferred income taxes | 173 | 35 | |||||
Depreciation, depletion and amortization | 1,323 | 1,257 | |||||
Impairments | 21 | 38 | |||||
Pension and other postretirement benefits, net | 26 | 33 | |||||
Exploratory dry well costs and unproved property impairments | 156 | 494 | |||||
Net (gain) loss on disposal of assets | 85 | (2 | ) | ||||
Equity method investments, net | (10 | ) | — | ||||
Changes in: | |||||||
Current receivables | (266 | ) | (11 | ) | |||
Inventories | (58 | ) | (19 | ) | |||
Current accounts payable and accrued liabilities | (31 | ) | (284 | ) | |||
All other operating, net | (59 | ) | (18 | ) | |||
Net cash provided by continuing operations | 2,118 | 1,922 | |||||
Net cash provided by discontinued operations | 440 | 474 | |||||
Net cash provided by operating activities | 2,558 | 2,396 | |||||
Investing activities: | |||||||
Additions to property, plant and equipment | (2,230 | ) | (2,405 | ) | |||
Disposal of assets | 2,232 | 333 | |||||
Investments - return of capital | 27 | 29 | |||||
Investing activities of discontinued operations | (233 | ) | (271 | ) | |||
All other investing, net | — | 15 | |||||
Net cash used in investing activities | (204 | ) | (2,299 | ) | |||
Financing activities: | |||||||
Commercial paper, net | (135 | ) | (200 | ) | |||
Debt repayments | (34 | ) | (148 | ) | |||
Purchases of common stock | (1,000 | ) | — | ||||
Dividends paid | (260 | ) | (241 | ) | |||
All other financing, net | 86 | 46 | |||||
Net cash used in financing activities | (1,343 | ) | (543 | ) | |||
Effect of exchange rate on cash and cash equivalents: | |||||||
Continuing operations | — | 4 | |||||
Discontinued operations | (10 | ) | 4 | ||||
Cash held for sale | (96 | ) | — | ||||
Net increase (decrease) in cash and cash equivalents | 905 | (438 | ) | ||||
Cash and cash equivalents at beginning of period | 264 | 684 | |||||
Cash and cash equivalents at end of period | $ | 1,169 | $ | 246 |
Three Months Ended June 30, | |||||||||||||||
2014 | 2013 | ||||||||||||||
(In millions, except per share data) | Basic | Diluted | Basic | Diluted | |||||||||||
Income from continuing operations | $ | 360 | $ | 360 | $ | 241 | $ | 241 | |||||||
Discontinued operations | 180 | 180 | 185 | 185 | |||||||||||
Net income | $ | 540 | $ | 540 | $ | 426 | $ | 426 | |||||||
Weighted average common shares outstanding | 676 | 676 | 710 | 710 | |||||||||||
Effect of dilutive securities | — | 3 | — | 4 | |||||||||||
Weighted average common shares, including | |||||||||||||||
dilutive effect | 676 | 679 | 710 | 714 | |||||||||||
Per share: | |||||||||||||||
Income from continuing operations | $0.53 | $0.53 | $0.34 | $0.34 | |||||||||||
Discontinued operations | $0.27 | $0.27 | $0.26 | $0.26 | |||||||||||
Net income | $0.80 | $0.80 | $0.60 | $0.60 |
Six Months Ended June 30, | |||||||||||||||
2014 | 2013 | ||||||||||||||
(In millions, except per share data) | Basic | Diluted | Basic | Diluted | |||||||||||
Income from continuing operations | $ | 758 | $ | 758 | $ | 399 | $ | 399 | |||||||
Discontinued operations | 931 | 931 | 410 | 410 | |||||||||||
Net income | $ | 1,689 | $ | 1,689 | $ | 809 | $ | 809 | |||||||
Weighted average common shares outstanding | 684 | 684 | 709 | 709 | |||||||||||
Effect of dilutive securities | — | 4 | — | 4 | |||||||||||
Weighted average common shares, including | |||||||||||||||
dilutive effect | 684 | 688 | 709 | 713 | |||||||||||
Per share: | |||||||||||||||
Income from continuing operations | $1.11 | $1.10 | $0.56 | $0.56 | |||||||||||
Discontinued operations | $1.36 | $1.36 | $0.58 | $0.58 | |||||||||||
Net income | $2.47 | $2.46 | $1.14 | $1.14 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
(In millions) | 2014 | 2013 | 2014 | 2013 | ||||||||||
Revenues applicable to discontinued operations | $ | 693 | $ | 828 | $ | 1,373 | $ | 1,732 | ||||||
Pretax income from discontinued operations | $ | 598 | $ | 662 | $ | 1,130 | $ | 1,422 | ||||||
After-tax income from discontinued operations | $ | 180 | (a) | $ | 158 | $ | 322 | (a) | $ | 380 |
(a) | Includes a tax benefit of $26 million related to a decrease in the valuation allowance on U.S. foreign tax credits from the Norway operations. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
(In millions) | 2014 | 2013 | 2014 | 2013 | ||||||||||
Revenues applicable to discontinued operations | $ | — | $ | 79 | $ | 58 | $ | 165 | ||||||
Pretax income from discontinued operations | $ | — | $ | 37 | $ | 51 | $ | 78 | ||||||
After-tax income from discontinued operations | $ | — | $ | 27 | $ | 33 | $ | 30 | ||||||
Pretax gain on disposition of discontinued operations | $ | — | $ | — | $ | 470 | $ | — |
• | North America E&P ("N.A. E&P") – explores for, produces and markets liquid hydrocarbons and natural gas in North America; |
• | International E&P ("Int'l E&P") – explores for, produces and markets liquid hydrocarbons and natural gas outside of North America and produces and markets products manufactured from natural gas, such as liquefied natural gas ("LNG")and methanol, in Equatorial Guinea; and |
• | Oil Sands Mining (“OSM”) – mines, extracts and transports bitumen from oil sands deposits in Alberta, Canada, and upgrades the bitumen to produce and market synthetic crude oil and vacuum gas oil. |
Three Months Ended June 30, 2014 | |||||||||||||||||||
Not Allocated | |||||||||||||||||||
(In millions) | N.A. E&P | Int'l E&P | OSM | to Segments | Total | ||||||||||||||
Sales and other operating revenues | $ | 1,540 | $ | 347 | $ | 383 | $ | — | $ | 2,270 | |||||||||
Marketing revenues | 540 | 61 | 17 | — | 618 | ||||||||||||||
Total revenues | 2,080 | 408 | 400 | — | 2,888 | ||||||||||||||
Income from equity method investments | — | 120 | — | — | 120 | ||||||||||||||
Net gain (loss) on disposal of assets and other income | 15 | 15 | 1 | (98 | ) | (67 | ) | ||||||||||||
Less: | |||||||||||||||||||
Production expenses | 217 | 99 | 246 | — | 562 | ||||||||||||||
Marketing costs | 537 | 60 | 17 | — | 614 | ||||||||||||||
Exploration expenses | 82 | 63 | — | — | 145 | ||||||||||||||
Depreciation, depletion and amortization | 550 | 75 | 45 | 10 | 680 | ||||||||||||||
Impairments | 4 | — | — | — | 4 | ||||||||||||||
Other expenses (a) | 126 | 34 | 13 | 67 | (c) | 240 | |||||||||||||
Taxes other than income | 102 | — | 6 | 1 | 109 | ||||||||||||||
Net interest and other | — | — | — | 76 | 76 | ||||||||||||||
Income tax provision (benefit) | 175 | 52 | 19 | (95 | ) | 151 | |||||||||||||
Segment income/Income from continuing operations | $ | 302 | $ | 160 | $ | 55 | $ | (157 | ) | $ | 360 | ||||||||
Capital expenditures (b) | $ | 1,102 | $ | 115 | $ | 55 | $ | 10 | $ | 1,282 |
(a) | Includes other operating expenses and general and administrative expenses. |
(b) | Includes accruals. |
(c) | Includes pension settlement loss of $8 million. |
Three Months Ended June 30, 2013 | |||||||||||||||||||
Not Allocated | |||||||||||||||||||
(In millions) | N.A. E&P | Int'l E&P | OSM | to Segments | Total | ||||||||||||||
Sales and other operating revenues | $ | 1,284 | $ | 826 | $ | 353 | $ | 50 | (c) | $ | 2,513 | ||||||||
Marketing revenues | 439 | 49 | 9 | — | 497 | ||||||||||||||
Total revenues | 1,723 | 875 | 362 | 50 | 3,010 | ||||||||||||||
Income from equity method investments | — | 77 | — | — | 77 | ||||||||||||||
Net gain (loss) on disposal of assets and other income | 6 | 7 | 3 | (113 | ) | (97 | ) | ||||||||||||
Less: | |||||||||||||||||||
Production expenses | 195 | 83 | 274 | — | 552 | ||||||||||||||
Marketing costs | 438 | 47 | 9 | — | 494 | ||||||||||||||
Exploration expenses | 76 | 49 | — | — | 125 | ||||||||||||||
Depreciation, depletion and amortization | 490 | 77 | 48 | 11 | 626 | ||||||||||||||
Other expenses (a) | 94 | 21 | 2 | 112 | (d) | 229 | |||||||||||||
Taxes other than income | 86 | — | 5 | 2 | 93 | ||||||||||||||
Net interest and other | — | — | — | 67 | 67 | ||||||||||||||
Income tax provision (benefit) | 129 | 512 | 7 | (85 | ) | 563 | |||||||||||||
Segment income/Income from continuing operations | $ | 221 | $ | 170 | $ | 20 | $ | (170 | ) | $ | 241 | ||||||||
Capital expenditures (b) | $ | 904 | $ | 107 | $ | 98 | $ | 10 | $ | 1,119 |
Six Months Ended June 30, 2014 | |||||||||||||||||||
Not Allocated | |||||||||||||||||||
(In millions) | N.A. E&P | Int'l E&P | OSM | to Segments | Total | ||||||||||||||
Sales and other operating revenues | $ | 2,932 | $ | 727 | $ | 760 | $ | — | $ | 4,419 | |||||||||
Marketing revenues | 980 | 131 | 48 | — | 1,159 | ||||||||||||||
Total revenues | 3,912 | 858 | 808 | — | 5,578 | ||||||||||||||
Income from equity method investments | — | 257 | — | — | 257 | ||||||||||||||
Net gain (loss) on disposal of assets and other income | 18 | 32 | 3 | (98 | ) | (45 | ) | ||||||||||||
Less: | |||||||||||||||||||
Production expenses | 428 | 199 | 477 | — | 1,104 | ||||||||||||||
Marketing costs | 977 | 131 | 48 | — | 1,156 | ||||||||||||||
Exploration expenses | 139 | 79 | — | — | 218 | ||||||||||||||
Depreciation, depletion and amortization | 1,065 | 146 | 90 | 22 | 1,323 | ||||||||||||||
Impairments | 21 | — | — | — | 21 | ||||||||||||||
Other expenses (a) | 236 | 72 | 26 | 196 | (c) | 530 | |||||||||||||
Taxes other than income | 192 | — | 11 | 1 | 204 | ||||||||||||||
Net interest and other | — | — | — | 125 | 125 | ||||||||||||||
Income tax provision (benefit) | 328 | 139 | 40 | (156 | ) | 351 | |||||||||||||
Segment income/Income from continuing operations | $ | 544 | $ | 381 | $ | 119 | $ | (286 | ) | $ | 758 | ||||||||
Capital expenditures (b) | $ | 1,969 | $ | 220 | $ | 123 | $ | 13 | $ | 2,325 |
(a) | Includes other operating expenses and general and administrative expenses. |
(b) | Includes accruals. |
(c) | Includes pension settlement loss of $71 million. |
Six Months Ended June 30, 2013 | |||||||||||||||||||
Not Allocated | |||||||||||||||||||
(In millions) | N.A. E&P | Int'l E&P | OSM | to Segments | Total | ||||||||||||||
Sales and other operating revenues | $ | 2,499 | $ | 1,721 | $ | 741 | $ | — | $ | 4,961 | |||||||||
Marketing revenues | 784 | 136 | 9 | — | 929 | ||||||||||||||
Total revenues | 3,283 | 1,857 | 750 | — | 5,890 | ||||||||||||||
Income from equity method investments | — | 195 | — | — | 195 | ||||||||||||||
Net gain (loss) on disposal of assets and other income | 6 | 23 | 3 | (11 | ) | 21 | |||||||||||||
Less: | |||||||||||||||||||
Production expenses | 379 | 161 | 545 | — | 1,085 | ||||||||||||||
Marketing costs | 785 | 133 | 9 | — | 927 | ||||||||||||||
Exploration expenses | 511 | 71 | — | — | 582 | ||||||||||||||
Depreciation, depletion and amortization | 968 | 168 | 100 | 21 | 1,257 | ||||||||||||||
Impairments | 23 | — | — | 15 | 38 | ||||||||||||||
Other expenses (a) | 200 | 64 | 10 | 216 | (c) | 490 | |||||||||||||
Taxes other than income | 162 | — | 11 | 2 | 175 | ||||||||||||||
Net interest and other | — | — | — | 140 | 140 | ||||||||||||||
Income tax provision (benefit) | 99 | 1,035 | 20 | (141 | ) | 1,013 | |||||||||||||
Segment income/Income from continuing operations | $ | 162 | $ | 443 | $ | 58 | $ | (264 | ) | $ | 399 | ||||||||
Capital expenditures (b) | $ | 1,874 | $ | 194 | $ | 143 | $ | 40 | $ | 2,251 |
(a) | Includes other operating expenses and general and administrative expenses. |
(b) | Includes accruals. |
(c) | Includes pension settlement loss of $17 million. |
Three Months Ended June 30, | |||||||||||||||
Pension Benefits | Other Benefits | ||||||||||||||
(In millions) | 2014 | 2013 | 2014 | 2013 | |||||||||||
Service cost | $ | 11 | $ | 13 | $ | 1 | $ | 1 | |||||||
Interest cost | 15 | 16 | 3 | 3 | |||||||||||
Expected return on plan assets | (14 | ) | (16 | ) | — | — | |||||||||
Amortization: | |||||||||||||||
– prior service cost (credit) | 2 | 1 | (1 | ) | (1 | ) | |||||||||
– actuarial loss | 10 | 16 | — | — | |||||||||||
Net settlement loss(a) | 8 | 17 | — | — | |||||||||||
Net periodic benefit cost | $ | 32 | $ | 47 | $ | 3 | $ | 3 |
Six Months Ended June 30, | |||||||||||||||
Pension Benefits | Other Benefits | ||||||||||||||
(In millions) | 2014 | 2013 | 2014 | 2013 | |||||||||||
Service cost | $ | 23 | $ | 26 | $ | 2 | $ | 2 | |||||||
Interest cost | 31 | 31 | 6 | 6 | |||||||||||
Expected return on plan assets | (32 | ) | (33 | ) | — | — | |||||||||
Amortization: | |||||||||||||||
– prior service cost (credit) | 3 | 3 | (2 | ) | (3 | ) | |||||||||
– actuarial loss | 16 | 29 | — | — | |||||||||||
Net settlement loss(a) | 71 | 17 | — | — | |||||||||||
Net periodic benefit cost | $ | 112 | $ | 73 | $ | 6 | $ | 5 |
(a) | Settlements are recognized as they occur, once it is probable that lump sum payments from a plan for a given year will exceed the plan's total service and interest cost for that year. |
June 30, | December 31, | ||||||
(In millions) | 2014 | 2013 | |||||
Liquid hydrocarbons, natural gas and bitumen | $ | 100 | $ | 55 | |||
Supplies and other items | 304 | 309 | |||||
Inventories, at cost | $ | 404 | $ | 364 |
June 30, | December 31, | ||||||
(In millions) | 2014 | 2013 | |||||
North America E&P | $ | 15,595 | $ | 14,973 | |||
International E&P (a) | 2,617 | 3,590 | |||||
Oil Sands Mining | 9,494 | 9,447 | |||||
Corporate | 118 | 135 | |||||
Net property, plant and equipment | $ | 27,824 | $ | 28,145 |
(a) | International E&P decrease is due to Norway assets reflected as held for sale in the June 30, 2014 consolidated balance sheet. |
(In millions) | |||
Beginning balance | $ | 2,096 | |
Incurred, including acquisitions | 31 | ||
Settled, including dispositions | (96 | ) | |
Accretion expense (included in depreciation, depletion and amortization) | 66 | ||
Revisions to previous estimates | 41 | ||
Held for sale | (309 | ) | |
Ending balance(a) | $ | 1,829 |
June 30, 2014 | |||||||||||||||
(In millions) | Level 1 | Level 2 | Level 3 | Total | |||||||||||
Derivative instruments, assets | |||||||||||||||
Interest rate | $ | — | $ | 11 | $ | — | $ | 11 | |||||||
Derivative instruments, assets | $ | — | $ | 11 | $ | — | $ | 11 | |||||||
Derivative instruments, liabilities | |||||||||||||||
Foreign currency | $ | — | $ | 12 | $ | — | $ | 12 | |||||||
Derivative instruments, liabilities | $ | — | $ | 12 | $ | — | $ | 12 |
December 31, 2013 | |||||||||||||||
(In millions) | Level 1 | Level 2 | Level 3 | Total | |||||||||||
Derivative instruments, assets | |||||||||||||||
Interest rate | $ | — | $ | 8 | $ | — | $ | 8 | |||||||
Foreign currency | — | 2 | — | 2 | |||||||||||
Derivative instruments, assets | $ | — | $ | 10 | $ | — | $ | 10 | |||||||
Derivative instruments, liabilities | |||||||||||||||
Foreign currency | $ | — | $ | 4 | $ | — | $ | 4 | |||||||
Derivative instruments, liabilities | $ | — | $ | 4 | $ | — | $ | 4 |
Three Months Ended June 30, | |||||||||||||||
2014 | 2013 | ||||||||||||||
(In millions) | Fair Value | Impairment | Fair Value | Impairment | |||||||||||
Long-lived assets held for use | $ | — | $ | 4 | $ | — | $ | — |
Six Months Ended June 30, | |||||||||||||||
2014 | 2013 | ||||||||||||||
(In millions) | Fair Value | Impairment | Fair Value | Impairment | |||||||||||
Long-lived assets held for use | $ | — | $ | 21 | $ | — | $ | 38 |
June 30, 2014 | December 31, 2013 | ||||||||||||||
Fair | Carrying | Fair | Carrying | ||||||||||||
(In millions) | Value | Amount | Value | Amount | |||||||||||
Financial assets | |||||||||||||||
Other noncurrent assets | $ | 166 | $ | 159 | $ | 154 | $ | 147 | |||||||
Total financial assets | 166 | 159 | 154 | 147 | |||||||||||
Financial liabilities | |||||||||||||||
Other current liabilities | 13 | 13 | 13 | 13 | |||||||||||
Long-term debt, including current portion(a) | 7,133 | 6,394 | 6,922 | 6,427 | |||||||||||
Deferred credits and other liabilities | 93 | 147 | 149 | 147 | |||||||||||
Total financial liabilities | $ | 7,239 | $ | 6,554 | $ | 7,084 | $ | 6,587 |
June 30, 2014 | |||||||||||||
(In millions) | Asset | Liability | Net Asset | Balance Sheet Location | |||||||||
Fair Value Hedges | |||||||||||||
Interest rate | $ | 11 | $ | — | $ | 11 | Other noncurrent assets | ||||||
Total Designated Hedges | $ | 11 | $ | — | $ | 11 |
June 30, 2014 | |||||||||||||
(In millions) | Asset | Liability | Net Liability | Balance Sheet Location | |||||||||
Fair Value Hedges | |||||||||||||
Foreign currency | $ | — | $ | 12 | $ | 12 | Current liabilities held for sale | ||||||
Total Designated Hedges | $ | — | $ | 12 | $ | 12 |
December 31, 2013 | |||||||||||||
(In millions) | Asset | Liability | Net Asset | Balance Sheet Location | |||||||||
Fair Value Hedges | |||||||||||||
Interest rate | $ | 8 | $ | — | $ | 8 | Other noncurrent assets | ||||||
Foreign currency | 2 | — | 2 | Other current assets | |||||||||
Total Designated Hedges | $ | 10 | $ | — | $ | 10 | |||||||
December 31, 2013 | |||||||||||||
(In millions) | Asset | Liability | Net Liability | Balance Sheet Location | |||||||||
Fair Value Hedges | |||||||||||||
Foreign currency | $ | — | $ | 4 | $ | 4 | Other current liabilities | ||||||
Total Designated Hedges | $ | — | $ | 4 | $ | 4 |
Aggregate Notional | June 30, 2014 | December 31, 2013 | ||||||
Amount | Weighted Average, LIBOR-Based, | |||||||
Maturity Dates | (in millions) | Floating Rate | ||||||
October 1, 2017 | $ | 600 | 4.64 | % | 4.65 | % | ||
March 15, 2018 | $ | 300 | 4.48 | % | 4.50 | % |
Gain (Loss) | ||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(In millions) | Income Statement Location | 2014 | 2013 | 2014 | 2013 | |||||||||||
Derivative | ||||||||||||||||
Interest rate | Net interest and other | $ | 4 | $ | (12 | ) | $ | 3 | $ | (15 | ) | |||||
Foreign currency | Discontinued operations | $ | (14 | ) | $ | (21 | ) | $ | (11 | ) | $ | (46 | ) | |||
Hedged Item | ||||||||||||||||
Long-term debt | Net interest and other | $ | (4 | ) | $ | 12 | $ | (3 | ) | $ | 15 | |||||
Accrued taxes | Discontinued operations | $ | 14 | $ | 21 | $ | 11 | $ | 46 |
Stock Options | Restricted Stock | ||||||||||||
Number of Shares | Weighted Average Exercise Price | Awards | Weighted Average Grant Date Fair Value | ||||||||||
Outstanding at December 31, 2013 | 18,104,887 | $27.27 | 4,031,888 | $31.80 | |||||||||
Granted | 1,935,423 | (a) | $34.48 | 1,887,487 | $34.84 | ||||||||
Options Exercised/Stock Vested | (3,800,690 | ) | $20.15 | (694,785 | ) | $33.10 | |||||||
Canceled | (440,429 | ) | $34.14 | (319,737 | ) | $31.65 | |||||||
Outstanding at June 30, 2014 | 15,799,191 | $29.68 | 4,904,853 | $32.79 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
(In millions) | 2014 | 2013 | 2014 | 2013 | Income Statement Line | |||||||||
Accumulated Other Comprehensive Loss Components | ||||||||||||||
Income (Expense) | ||||||||||||||
Postretirement and postemployment plans | ||||||||||||||
Amortization of actuarial loss | $ | (10 | ) | $ | (16 | ) | $ | (16 | ) | (29 | ) | General and administrative | ||
Net settlement loss | (8 | ) | (17 | ) | (71 | ) | (17 | ) | General and administrative | |||||
(18 | ) | (33 | ) | (87 | ) | (46 | ) | Income from operations | ||||||
7 | 12 | 30 | 17 | Provision for income taxes | ||||||||||
Other insignificant, net of tax | — | — | (1 | ) | — | |||||||||
Total reclassifications | $ | (11 | ) | $ | (21 | ) | $ | (58 | ) | $ | (29 | ) | Income from continuing operations |
Six Months Ended June 30, | |||||||
(In millions) | 2014 | 2013 | |||||
Net cash provided by operating activities: | |||||||
Interest paid (net of amounts capitalized) | $ | 149 | $ | 160 | |||
Income taxes paid to taxing authorities (a) | 1,336 | 2,474 | |||||
Commercial paper, net: | |||||||
Issuances | $ | 2,285 | $ | 2,075 | |||
Repayments | (2,420 | ) | (2,275 | ) | |||
Commercial paper, net | (135 | ) | (200 | ) | |||
Noncash investing activities, related to continuing operations: | |||||||
Asset retirement costs capitalized | $ | 42 | $ | 309 | |||
Change in capital expenditure accrual | 95 | (154 | ) | ||||
Asset retirement obligations assumed by buyer | 52 | 92 | |||||
Receivable for disposal of assets | 44 | 50 |
(a) | Income taxes paid to taxing authorities included $1,076 million and $1,392 million related to discontinued operations in the first six months of 2014 and 2013. |
• | North America E&P – explores for, produces and markets liquid hydrocarbons and natural gas in North America; |
• | International E&P – explores for, produces and markets liquid hydrocarbons and natural gas outside of North America and produces and markets products manufactured from natural gas, such as LNG and methanol, in Equatorial Guinea ("E.G."); and |
• | Oil Sands Mining – mines, extracts and transports bitumen from oil sands deposits in Alberta, Canada, and upgrades the bitumen to produce and market synthetic crude oil and vacuum gas oil. |
• | Increased net income per diluted share to $0.80 compared to $0.60 for the same quarter of 2013 |
• | Increased income from continuing operations per diluted share to $0.53 compared to $0.34 for the same quarter of 2013 |
• | Increased average net sales volumes from the three U.S. resource plays to 170 mboed, up 29 percent from same quarter of last year, with liquid hydrocarbon production up more than 30 percent |
• | Executed agreements to add approximately 30,000 net acres to our Oklahoma resource position, increasing total net acreage to more than 300,000 net acres |
• | Reached definitive agreement to sell Norway business for a total transaction value of $2.7 billion; expect to close in the fourth quarter of 2014 with net proceeds of $2.1 billion |
• | Repurchased approximately 13 million common shares at a cost of $449 million leaving $1.5 billion remaining on the share repurchase authorization |
• | Increased quarterly dividend by 11 percent to $0.21 per share |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
2014 | 2013 | 2014 | 2013 | ||||
Net Sales Volumes | |||||||
Crude Oil and Condensate (mbbld) | |||||||
Bakken | 44 | 35 | 41 | 34 | |||
Eagle Ford | 67 | 50 | 65 | 48 | |||
Oklahoma resource basins | 2 | 1 | 2 | 1 | |||
Other North America | 38 | 40 | 36 | 41 | |||
Total Crude Oil and Condensate | 151 | 126 | 144 | 124 | |||
Natural Gas Liquids (mbbld) | |||||||
Bakken | 3 | 2 | 2 | 2 | |||
Eagle Ford | 16 | 14 | 16 | 13 | |||
Oklahoma resource basins | 6 | 4 | 5 | 4 | |||
Other North America | 2 | 2 | 4 | 2 | |||
Total Natural Gas Liquids | 27 | 22 | 27 | 21 | |||
Total Liquid Hydrocarbons (mbbld) | |||||||
Bakken | 47 | 37 | 43 | 36 | |||
Eagle Ford | 83 | 64 | 81 | 61 | |||
Oklahoma resource basins | 8 | 5 | 7 | 5 | |||
Other North America | 40 | 42 | 40 | 43 | |||
Total Liquid Hydrocarbons | 178 | 148 | 171 | 145 | |||
Natural Gas (mmcfd) | |||||||
Bakken | 18 | 12 | 17 | 13 | |||
Eagle Ford | 111 | 99 | 109 | 91 | |||
Oklahoma resource basins | 61 | 48 | 58 | 49 | |||
Other North America | 104 | 157 | 113 | 175 | |||
Total Natural Gas | 294 | 316 | 297 | 328 | |||
Equivalent Barrels (mboed) | |||||||
Bakken | 50 | 39 | 46 | 38 | |||
Eagle Ford | 102 | 81 | 99 | 76 | |||
Oklahoma resource basins | 18 | 13 | 17 | 13 | |||
Other North America | 57 | 68 | 58 | 73 | |||
Total North America E&P | 227 | 201 | 220 | 200 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||
Net Sales Volumes | |||||||||||
Total Liquid Hydrocarbons (mbbld) | |||||||||||
Equatorial Guinea | 31 | 30 | 33 | 34 | |||||||
United Kingdom | 13 | 14 | 13 | 17 | |||||||
Libya | — | 45 | — | 39 | |||||||
Total Liquid Hydrocarbons | 44 | 89 | 46 | 90 | |||||||
Natural Gas (mmcfd) | |||||||||||
Equatorial Guinea | 446 | 401 | 441 | 424 | |||||||
United Kingdom(a) | 28 | 36 | 29 | 38 | |||||||
Libya | — | 24 | 1 | 25 | |||||||
Total Natural Gas | 474 | 461 | 471 | 487 | |||||||
Equivalent Barrels (mboed) | |||||||||||
Equatorial Guinea | 105 | 97 | 107 | 105 | |||||||
United Kingdom(a) | 18 | 20 | 18 | 23 | |||||||
Libya | — | 49 | — | 43 | |||||||
Total International E&P (mboed) | 123 | 166 | 125 | 171 | |||||||
Net Sales Volumes of Equity Method Investees | |||||||||||
LNG (mtd) | 6,624 | 5,820 | 6,601 | 6,301 | |||||||
Methanol (mtd) | 980 | 973 | 1,066 | 1,191 |
(a) | Includes natural gas acquired for injection and subsequent resale of 5 mmcfd and 8 mmcfd for the second quarters of 2014 and 2013, and 6 mmcfd and 10 mmcfd for the first six months of 2014 and 2013. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Average Price Realizations (a) | |||||||||||||||
Crude Oil and Condensate (per bbl) | |||||||||||||||
Bakken | $93.08 | $88.65 | $91.43 | $89.89 | |||||||||||
Eagle Ford | 99.08 | 99.40 | 97.65 | 101.50 | |||||||||||
Oklahoma resource basins | 101.12 | 90.51 | 98.05 | 90.32 | |||||||||||
Other North America | 93.45 | 91.32 | 91.40 | 89.31 | |||||||||||
Total Crude Oil and Condensate | 95.95 | 93.75 | 94.30 | 94.20 | |||||||||||
Natural Gas Liquids (per bbl) | |||||||||||||||
Bakken | $45.13 | $35.92 | $51.04 | $38.42 | |||||||||||
Eagle Ford | 30.20 | 28.09 | 33.76 | 28.12 | |||||||||||
Oklahoma resource basins | 33.04 | 27.99 | 38.21 | 34.77 | |||||||||||
Other North America | 54.13 | 51.05 | 57.65 | 53.71 | |||||||||||
Total Natural Gas Liquids | 34.80 | 31.72 | 38.75 | 33.51 | |||||||||||
Total Liquid Hydrocarbons (per bbl) (b) | |||||||||||||||
Bakken | $90.47 | $85.96 | $89.16 | $87.23 | |||||||||||
Eagle Ford | 85.36 | 83.90 | 84.78 | 85.88 | |||||||||||
Oklahoma resource basins | 52.00 | 47.05 | 55.04 | 49.88 | |||||||||||
Other North America | 90.45 | 88.64 | 88.97 | 87.02 | |||||||||||
Total Liquid Hydrocarbons | 86.43 | 84.51 | 85.65 | 85.30 | |||||||||||
Natural Gas (per mcf) | |||||||||||||||
Bakken | $4.12 | $4.47 | $6.14 | $4.02 | |||||||||||
Eagle Ford | 4.76 | 4.17 | 4.83 | 3.80 | |||||||||||
Oklahoma resource basins | 4.57 | 4.71 | 5.01 | 4.13 | |||||||||||
Other North America | 5.65 | 4.01 | 5.35 | 4.11 | |||||||||||
Total Natural Gas | 5.00 | 4.19 | 5.14 | 4.02 | |||||||||||
Benchmarks | |||||||||||||||
West Texas Intermediate ("WTI") crude oil (per bbl) | $102.99 | $94.17 | $100.84 | $94.26 | |||||||||||
Louisiana Light Sweet ("LLS") crude oil (per bbl)(c) | 105.55 | 104.77 | 104.97 | 107.36 | |||||||||||
Mont Belvieu NGLs (per bbl) (d) | 34.54 | 31.84 | 36.42 | 32.84 | |||||||||||
Henry Hub natural gas(e) (per mmbtu)(f) | 4.67 | 4.09 | 4.80 | 3.71 |
(a) | Excludes gains or losses on derivative instruments. |
(b) | Inclusion of realized gains on crude oil derivative instruments would have increased average liquid hydrocarbon price realizations by $1.26 and $0.50 per bbl for the second quarter and first six months of 2013. There were no crude oil derivative instruments for the second quarter and first six months of 2014. |
(c) | Bloomberg Finance LLP: LLS St. James. |
(d) | Bloomberg Finance LLP: Y-grade Mix NGL of 50% ethane, 25% propane, 10% butane, 5% isobutane and 10% natural gasoline. |
(e) | Settlement date average. |
(f) | Million British thermal units. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||
Average Price Realizations (a) | |||||||||||||
Total Liquid Hydrocarbons (per bbl) | |||||||||||||
Equatorial Guinea | $59.72 | $54.09 | $61.12 | $60.58 | |||||||||
United Kingdom | 110.51 | 101.85 | 110.02 | 108.01 | |||||||||
Libya | — | 117.55 | — | 122.64 | |||||||||
Total Liquid Hydrocarbons | 75.41 | 93.62 | 75.48 | 96.65 | |||||||||
Natural Gas (per mcf) | |||||||||||||
Equatorial Guinea(b) | $0.24 | $0.24 | $0.24 | $0.24 | |||||||||
United Kingdom | 8.04 | 10.23 | 9.07 | 10.78 | |||||||||
Libya | — | 4.65 | 5.45 | 4.86 | |||||||||
Total Natural Gas | 0.69 | 1.24 | 0.80 | 1.31 | |||||||||
Benchmark | |||||||||||||
Brent (Europe) crude oil (per bbl) | $109.70 | $102.58 | $108.93 | $107.54 |
(b) | Primarily represents fixed prices under long-term contracts with Alba Plant LLC, Atlantic Methanol Production Company LLC and Equatorial Guinea LNG Holdings Limited, which are equity method investees. We include our share of income from each of these equity method investees in our International E&P segment. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||
Average Price Realizations (a) | |||||||||||||
Synthetic Crude Oil (per bbl) | $94.17 | $89.39 | $91.27 | $84.31 | |||||||||
Benchmark | |||||||||||||
WTI crude oil (per bbl) | $102.99 | $94.17 | $100.84 | $94.26 | |||||||||
WCS crude oil (per bbl)(b) | $82.95 | $75.06 | $79.25 | $68.74 | |||||||||
AECO natural gas sales index (per mmbtu)(c) | $4.46 | $3.45 | $4.72 | $3.31 |
(a) | Excludes gains or losses on derivative instruments. |
(b) | Monthly pricing based upon average WTI adjusted for differentials unique to western Canada. |
(c) | Monthly average AECO day ahead index. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
(In millions) | 2014 | 2013 | 2014 | 2013 | |||||||||
Sales and other operating revenues, including related party | |||||||||||||
North America E&P | $ | 1,540 | $ | 1,284 | $ | 2,932 | $ | 2,499 | |||||
International E&P | 347 | 826 | 727 | 1,721 | |||||||||
Oil Sands Mining | 383 | 353 | 760 | 741 | |||||||||
Segment sales and other operating revenues, including related party | $ | 2,270 | $ | 2,463 | $ | 4,419 | $ | 4,961 | |||||
Unrealized gain on crude oil derivative instruments | — | 50 | — | — | |||||||||
Sales and other operating revenues, including related party | $ | 2,270 | $ | 2,513 | $ | 4,419 | $ | 4,961 |
Three Months Ended | Increase (Decrease) Related to | Three Months Ended | ||||||||||||||
(In millions) | June 30, 2013 | Price Realizations | Net Sales Volumes | June 30, 2014 | ||||||||||||
North America E&P Price-Volume Analysis | ||||||||||||||||
Liquid hydrocarbons | $ | 1,144 | $ | 31 | $ | 228 | $ | 1,403 | ||||||||
Natural gas | 120 | 22 | (9 | ) | 133 | |||||||||||
Realized gain on crude oil | ||||||||||||||||
derivative instruments | 17 | (17 | ) | — | ||||||||||||
Other sales | 3 | 4 | ||||||||||||||
Total | $ | 1,284 | $ | 1,540 |
Six Months Ended | Increase (Decrease) Related to | Six Months Ended | ||||||||||||||
(In millions) | June 30, 2013 | Price Realizations | Net Sales Volumes | June 30, 2014 | ||||||||||||
North America E&P Price-Volume Analysis | ||||||||||||||||
Liquid hydrocarbons | $ | 2,239 | $ | 11 | $ | 397 | $ | 2,647 | ||||||||
Natural gas | 239 | 60 | (23 | ) | 276 | |||||||||||
Realized gain on crude oil | ||||||||||||||||
derivative instruments | 13 | (13 | ) | — | ||||||||||||
Other sales | 8 | 9 | ||||||||||||||
Total | $ | 2,499 | $ | 2,932 |
Three Months Ended | Increase (Decrease) Related to | Three Months Ended | ||||||||||||||
(In millions) | June 30, 2013 | Price Realizations | Net Sales Volumes | June 30, 2014 | ||||||||||||
International E&P Price-Volume Analysis | ||||||||||||||||
Liquid hydrocarbons | $ | 761 | $ | (73 | ) | $ | (383 | ) | (a) | $ | 305 | |||||
Natural gas | 52 | (24 | ) | 2 | 30 | |||||||||||
Other sales | 13 | 12 | ||||||||||||||
Total | $ | 826 | $ | 347 |
(a) | Includes a $480 million decrease related to Libya. |
Six Months Ended | Increase (Decrease) Related to | Six Months Ended | ||||||||||||||
(In millions) | June 30, 2013 | Price Realizations | Net Sales Volumes | June 30, 2014 | ||||||||||||
International E&P Price-Volume Analysis | ||||||||||||||||
Liquid hydrocarbons | $ | 1,580 | $ | (178 | ) | $ | (768 | ) | (b) | $ | 634 | |||||
Natural gas | 116 | (43 | ) | (4 | ) | 69 | ||||||||||
Other sales | 25 | 24 | ||||||||||||||
Total | $ | 1,721 | $ | 727 |
(b) | Includes an $871 million decrease related to Libya. |
Three Months Ended | Increase (Decrease) Related to | Three Months Ended | ||||||||||||||
(In millions) | June 30, 2013 | Price Realizations | Net Sales Volumes | June 30, 2014 | ||||||||||||
Oil Sands Mining Price-Volume Analysis | ||||||||||||||||
Synthetic crude oil | $ | 348 | $ | 20 | $ | 9 | $ | 377 | ||||||||
Other sales | 5 | 6 | ||||||||||||||
Total | $ | 353 | $ | 383 |
Six Months Ended | Increase (Decrease) Related to | Six Months Ended | ||||||||||||||
(In millions) | June 30, 2013 | Price Realizations | Net Sales Volumes | June 30, 2014 | ||||||||||||
Oil Sands Mining Price-Volume Analysis | ||||||||||||||||
Synthetic crude oil | $ | 714 | $ | 58 | $ | (22 | ) | $ | 750 | |||||||
Other sales | 27 | 10 | ||||||||||||||
Total | $ | 741 | $ | 760 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
($ per boe) | 2014 | 2013 | 2014 | 2013 | |||||||||||
Production Expense Rate | |||||||||||||||
North America E&P | $10.47 | $10.62 | $10.74 | $10.49 | |||||||||||
International E&P | $8.87 | $5.43 | $8.82 | $5.19 | |||||||||||
Oil Sands Mining (a) | $51.53 | $57.62 | $49.54 | $51.52 |
(a) | Production expense per synthetic crude oil barrel (before royalties) includes production costs, shipping and handling, taxes other than income and insurance costs and excludes pre-development costs. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
(In millions) | 2014 | 2013 | 2014 | 2013 | |||||||||||
Exploration Expenses | |||||||||||||||
Unproved property impairments | $ | 60 | $ | 40 | $ | 101 | $ | 423 | |||||||
Dry well costs | 53 | 50 | 55 | 71 | |||||||||||
Geological and geophysical | 6 | 9 | 17 | 36 | |||||||||||
Other | 26 | 26 | 45 | 52 | |||||||||||
Total exploration expenses | $ | 145 | $ | 125 | $ | 218 | $ | 582 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
($ per boe) | 2014 | 2013 | 2014 | 2013 | |||||||||||
DD&A Rate | |||||||||||||||
North America E&P | $26.58 | $26.74 | $26.72 | $26.78 | |||||||||||
International E&P | $6.64 | $5.15 | $6.45 | $5.41 | |||||||||||
Oil Sands Mining | $11.78 | $12.25 | $11.74 | $12.19 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
(In millions) | 2014 | 2013 | 2014 | 2013 | |||||||||||
Production and severance | $ | 68 | $ | 54 | $ | 122 | $ | 101 | |||||||
Ad valorem | 19 | 19 | 38 | 36 | |||||||||||
Other | 22 | 20 | 44 | 38 | |||||||||||
Total | $ | 109 | $ | 93 | $ | 204 | $ | 175 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
(In millions) | 2014 | 2013 | 2014 | 2013 | |||||||||||
North America E&P | $ | 302 | $ | 221 | $ | 544 | $ | 162 | |||||||
International E&P | 160 | 170 | 381 | 443 | |||||||||||
Oil Sands Mining | 55 | 20 | 119 | 58 | |||||||||||
Segment income | 517 | 411 | 1,044 | 663 | |||||||||||
Items not allocated to segments, net of income taxes | (157 | ) | (170 | ) | (286 | ) | (264 | ) | |||||||
Income from continuing operations | 360 | 241 | 758 | 399 | |||||||||||
Discontinued operations (a) | 180 | 185 | 931 | 410 | |||||||||||
Net income | $ | 540 | $ | 426 | $ | 1,689 | $ | 809 |
(a) | We sold our Angola assets in the first quarter of 2014 and entered into an agreement to sell our Norway business in June 2014. The Angola and Norway businesses are reflected as discontinued operations in all periods presented. |
Six Months Ended June 30, | |||||||
(In millions) | 2014 | 2013 | |||||
Sources of cash and cash equivalents | |||||||
Continuing operations | $ | 2,118 | $ | 1,922 | |||
Discontinued operations | 440 | 474 | |||||
Disposals of assets | 2,232 | 333 | |||||
Other | 113 | 98 | |||||
Total sources of cash and cash equivalents | $ | 4,903 | $ | 2,827 | |||
Uses of cash and cash equivalents | |||||||
Additions to property, plant and equipment | $ | (2,230 | ) | $ | (2,405 | ) | |
Investing activities of discontinued operations | (233 | ) | (271 | ) | |||
Purchases of common stock | (1,000 | ) | — | ||||
Commercial paper, net | (135 | ) | (200 | ) | |||
Debt repayments | (34 | ) | (148 | ) | |||
Dividends paid | (260 | ) | (241 | ) | |||
Other | (10 | ) | — | ||||
Cash held for sale | (96 | ) | — | ||||
Total uses of cash and cash equivalents | $ | (3,998 | ) | $ | (3,265 | ) |
Six Months Ended June 30, | |||||||
(In millions) | 2014 | 2013 | |||||
North America E&P | $ | 1,969 | $ | 1,874 | |||
International E&P | 220 | 194 | |||||
Oil Sands Mining | 123 | 143 | |||||
Corporate | 13 | 40 | |||||
Total capital expenditures | 2,325 | 2,251 | |||||
Change in capital expenditure accrual | (95 | ) | 154 | ||||
Additions to property, plant and equipment | $ | 2,230 | $ | 2,405 |
June 30, | December 31, | ||||||
(In millions) | 2014 | 2013 | |||||
Commercial paper | $ | — | $ | 135 | |||
Long-term debt due within one year | 68 | 68 | |||||
Long-term debt | 6,362 | 6,394 | |||||
Total debt | $ | 6,430 | $ | 6,597 | |||
Cash and cash equivalents | $ | 1,169 | $ | 264 | |||
Equity | $ | 19,868 | $ | 19,344 | |||
Calculation: | |||||||
Total debt | $ | 6,430 | $ | 6,597 | |||
Minus cash and cash equivalents | 1,169 | 264 | |||||
Total debt minus cash and cash equivalents | $ | 5,261 | $ | 6,333 | |||
Total debt | $ | 6,430 | $ | 6,597 | |||
Plus equity | 19,868 | 19,344 | |||||
Minus cash and cash equivalents | 1,169 | 264 | |||||
Total debt plus equity minus cash and cash equivalents | $ | 25,129 | $ | 25,677 | |||
Cash-adjusted debt-to-capital ratio | 21 | % | 25 | % |
• | conditions in the oil and gas industry, including the level of supply or demand for liquid hydrocarbons and natural gas and the impact on the price of liquid hydrocarbons and natural gas; |
• | changes in political or economic conditions in key operating markets, including international markets; |
• | the amount of capital available for exploration and development; |
• | timing of commencing production from new wells; |
• | drilling rig availability; |
• | availability of materials and labor; |
• | the inability to obtain or delay in obtaining necessary government or third-party approvals and permits; |
• | non-performance by third parties of their contractual obligations; |
• | unforeseen hazards such as weather conditions, acts of war or terrorist acts and the governmental or military response thereto; |
• | changes in safety, health, environmental and other regulations; |
• | other geological, operating and economic considerations; and |
• | other factors discussed in Item 1. Business, Item 1A. Risk Factors, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, Item 7A. Quantitative and Qualitative Disclosures About Market Risk, and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2013, and those set forth from time to time in our filings with the Securities and Exchange Commission. |
Incremental | |||||||
Change in | |||||||
(In millions) | Fair Value | Fair Value | |||||
Financial assets (liabilities): (a) | |||||||
Interest rate swap agreements | $ | 11 | (b) | $ | 3 | ||
Long-term debt, including amounts due within one year | $ | (7,133 | ) | (b)(c) | $ | (215 | ) |
(a) | Fair values of cash and cash equivalents, receivables, commercial paper, accounts payable and accrued interest approximate carrying value and are relatively insensitive to changes in interest rates due to the short-term maturity of the instruments. Accordingly, these instruments are excluded from the table. |
(b) | Fair value was based on market prices where available, or current borrowing rates for financings with similar terms and maturities. |
(c) | Excludes capital leases. |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
(In millions) | 2014 | 2013 | 2014 | 2013 | |||||||||||
Segment Income | |||||||||||||||
North America E&P | $ | 302 | $ | 221 | $ | 544 | $ | 162 | |||||||
International E&P | 160 | 170 | 381 | 443 | |||||||||||
Oil Sands Mining | 55 | 20 | 119 | 58 | |||||||||||
Segment income | 517 | 411 | 1,044 | 663 | |||||||||||
Items not allocated to segments, net of income taxes | (157 | ) | (170 | ) | (286 | ) | (264 | ) | |||||||
Income from continuing operations | 360 | 241 | 758 | 399 | |||||||||||
Discontinued operations (a) | 180 | 185 | 931 | 410 | |||||||||||
Net income | $ | 540 | $ | 426 | $ | 1,689 | $ | 809 | |||||||
Capital Expenditures (b) | |||||||||||||||
North America E&P | $ | 1,102 | $ | 904 | $ | 1,969 | $ | 1,874 | |||||||
International E&P | 115 | 107 | 220 | 194 | |||||||||||
Oil Sands Mining | 55 | 98 | 123 | 143 | |||||||||||
Corporate | 10 | 10 | 13 | 40 | |||||||||||
Discontinued operations (a) | 141 | 138 | 251 | 276 | |||||||||||
Total | $ | 1,423 | $ | 1,257 | $ | 2,576 | $ | 2,527 | |||||||
Exploration Expenses | |||||||||||||||
North America E&P | $ | 82 | $ | 76 | $ | 139 | $ | 511 | |||||||
International E&P | 63 | 49 | 79 | 71 | |||||||||||
Total | $ | 145 | $ | 125 | $ | 218 | $ | 582 |
(a) | We sold our Angola assets in the first quarter of 2014 and entered into an agreement to sell our Norway business in June 2014. The Angola and Norway businesses are reflected as discontinued operations in all periods presented. |
(b) | Capital expenditures include changes in accruals. |
Three Months Ended | Six Months Ended | ||||||
June 30, | June 30, | ||||||
Net Sales Volumes | 2014 | 2013 | 2014 | 2013 | |||
North America E&P | |||||||
Crude Oil and Condensate (mbbld) | |||||||
Bakken | 44 | 35 | 41 | 34 | |||
Eagle Ford | 67 | 50 | 65 | 48 | |||
Oklahoma resource basins | 2 | 1 | 2 | 1 | |||
Other North America | 38 | 40 | 36 | 41 | |||
Total Crude Oil and Condensate | 151 | 126 | 144 | 124 | |||
Natural Gas Liquids (mbbld) | |||||||
Bakken | 3 | 2 | 2 | 2 | |||
Eagle Ford | 16 | 14 | 16 | 13 | |||
Oklahoma resource basins | 6 | 4 | 5 | 4 | |||
Other North America | 2 | 2 | 4 | 2 | |||
Total Natural Gas Liquids | 27 | 22 | 27 | 21 | |||
Total Liquid Hydrocarbons (mbbld) | |||||||
Bakken | 47 | 37 | 43 | 36 | |||
Eagle Ford | 83 | 64 | 81 | 61 | |||
Oklahoma resource basins | 8 | 5 | 7 | 5 | |||
Other North America | 40 | 42 | 40 | 43 | |||
Total Liquid Hydrocarbons | 178 | 148 | 171 | 145 | |||
Natural Gas (mmcfd) | |||||||
Bakken | 18 | 12 | 17 | 13 | |||
Eagle Ford | 111 | 99 | 109 | 91 | |||
Oklahoma resource basins | 61 | 48 | 58 | 49 | |||
Other North America | 104 | 157 | 113 | 175 | |||
Total Natural Gas | 294 | 316 | 297 | 328 | |||
Total North America E&P (mboed) | 227 | 201 | 220 | 200 |
Three Months Ended | Six Months Ended | ||||||||
June 30, | June 30, | ||||||||
Net Sales Volumes | 2014 | 2013 | 2014 | 2013 | |||||
International E&P | |||||||||
Total Liquid Hydrocarbons (mbbld) | |||||||||
Equatorial Guinea | 31 | 30 | 33 | 34 | |||||
United Kingdom | 13 | 14 | 13 | 17 | |||||
Libya | — | 45 | — | 39 | |||||
Total Liquid Hydrocarbons | 44 | 89 | 46 | 90 | |||||
Natural Gas (mmcfd) | |||||||||
Equatorial Guinea | 446 | 401 | 441 | 424 | |||||
United Kingdom(c) | 28 | 36 | 29 | 38 | |||||
Libya | — | 24 | 1 | 25 | |||||
Total Natural Gas | 474 | 461 | 471 | 487 | |||||
Total International E&P (mboed) | 123 | 166 | 125 | 171 | |||||
Oil Sands Mining | |||||||||
Synthetic Crude Oil (mbbld)(d) | 44 | 43 | 45 | 47 | |||||
Total Continuing Operations (mboed) | 394 | 410 | 390 | 418 | |||||
Discontinued Operations - Angola (mboed)(a) | — | 9 | 3 | 9 | |||||
Discontinued Operations - Norway (mboed)(a) | 70 | 87 | 70 | 88 | |||||
Total Company (mboed) | 464 | 506 | 463 | 515 | |||||
Net Sales Volumes of Equity Method Investees | |||||||||
LNG (mtd) | 6,624 | 5,820 | 6,601 | 6,301 | |||||
Methanol (mtd) | 980 | 973 | 1,066 | 1,191 |
(c) | Includes natural gas acquired for injection and subsequent resale of 5 mmcfd and 8 mmcfd for the second quarters of 2014 and 2013, and 6 mmcfd and 10 mmcfd for the first six months of 2014 and 2013. |
(d) | Includes blendstocks. |
Three Months Ended | Six Months Ended | ||||||||||
June 30, | June 30, | ||||||||||
Average Price Realizations (e) | 2014 | 2013 | 2014 | 2013 | |||||||
North America E&P | |||||||||||
Crude Oil and Condensate (per bbl) | |||||||||||
Bakken | $93.08 | $88.65 | $91.43 | $89.89 | |||||||
Eagle Ford | 99.08 | 99.40 | 97.65 | 101.50 | |||||||
Oklahoma resource basins | 101.12 | 90.51 | 98.05 | 90.32 | |||||||
Other North America | 93.45 | 91.32 | 91.40 | 89.31 | |||||||
Total Crude Oil and Condensate | 95.95 | 93.75 | 94.30 | 94.20 | |||||||
Natural Gas Liquids (per bbl) | |||||||||||
Bakken | $45.13 | $35.92 | $51.04 | $38.42 | |||||||
Eagle Ford | 30.20 | 28.09 | 33.76 | 28.12 | |||||||
Oklahoma resource basins | 33.04 | 27.99 | 38.21 | 34.77 | |||||||
Other North America | 54.13 | 51.05 | 57.65 | 53.71 | |||||||
Total Natural Gas Liquids | 34.80 | 31.72 | 38.75 | 33.51 | |||||||
Total Liquid Hydrocarbons (per bbl) (f) | |||||||||||
Bakken | $90.47 | $85.96 | $89.16 | $87.23 | |||||||
Eagle Ford | 85.36 | 83.90 | 84.78 | 85.88 | |||||||
Oklahoma resource basins | 52.00 | 47.05 | 55.04 | 49.88 | |||||||
Other North America | 90.45 | 88.64 | 88.97 | 87.02 | |||||||
Total Liquid Hydrocarbons | 86.43 | 84.51 | 85.65 | 85.30 | |||||||
Natural Gas (per mcf) | |||||||||||
Bakken | $4.12 | $4.47 | $6.14 | $4.02 | |||||||
Eagle Ford | 4.76 | 4.17 | 4.83 | 3.80 | |||||||
Oklahoma resource basins | 4.57 | 4.71 | 5.01 | 4.13 | |||||||
Other North America | 5.65 | 4.01 | 5.35 | 4.11 | |||||||
Total Natural Gas | 5.00 | 4.19 | 5.14 | 4.02 |
(e) | Excludes gains or losses on derivative instruments. |
(f) | Inclusion of realized gains on crude oil derivative instruments would have increased average liquid hydrocarbon price realizations by $1.26 and $0.50 per bbl for the second quarter and first six months of 2013. There were no crude oil derivative instruments for the second quarter and first six months of 2014. |
Three Months Ended | Six Months Ended | ||||||||||
June 30, | June 30, | ||||||||||
Average Price Realizations (e) | 2014 | 2013 | 2014 | 2013 | |||||||
International E&P | |||||||||||
Total Liquid Hydrocarbons (per bbl) | |||||||||||
Equatorial Guinea | $59.72 | $54.09 | $61.12 | $60.58 | |||||||
United Kingdom | 110.51 | 101.85 | 110.02 | 108.01 | |||||||
Libya | — | 117.55 | — | 122.64 | |||||||
Total Liquid Hydrocarbons | 75.41 | 93.62 | 75.48 | 96.65 | |||||||
Natural Gas (per mcf) | |||||||||||
Equatorial Guinea(g) | $0.24 | $0.24 | $0.24 | $0.24 | |||||||
United Kingdom | 8.04 | 10.23 | 9.07 | 10.78 | |||||||
Libya | — | 4.65 | 5.45 | 4.86 | |||||||
Total Natural Gas | 0.69 | 1.24 | 0.80 | 1.31 | |||||||
Oil Sands Mining | |||||||||||
Synthetic Crude Oil (per bbl) | $94.17 | $89.39 | $91.27 | $84.31 | |||||||
Discontinued Operations - Angola (per boe)(a) | — | $100.30 | $99.82 | $103.17 | |||||||
Discontinued Operations - Norway (per boe)(a) | $108.11 | $103.73 | $108.09 | $108.74 |
Column (a) | Column (b) | Column (c) | Column (d) | ||||||
Total Number of | Average Price | Total Number of Shares Purchased as Part of Publicly Announced | Approximate Dollar Value of Shares that May Yet Be Purchased Under the | ||||||
Period | Shares Purchased (a)(b) | Paid per Share | Plans or Programs(c) | Plans or Programs(c) | |||||
04/01/14 - 04/30/14 | 8,297,968 | $35.64 | 8,233,581 | $1,655,706,060 | |||||
05/01/14 - 05/31/14 | 4,283,727 | $36.34 | 4,276,263 | $1,500,285,529 | |||||
06/01/14 - 06/30/14 | 29,876 | $37.83 | — | $1,500,285,529 | |||||
Total | 12,611,571 | $35.88 | 12,509,844 |
(a) | 77,436 shares of restricted stock were delivered by employees to Marathon Oil, upon vesting, to satisfy tax withholding requirements. |
(b) | In June 2014, 24,291 shares were repurchased in open-market transactions to satisfy the requirements for dividend reinvestment under the Marathon Oil Corporation Dividend Reinvestment and Direct Stock Purchase Plan (the “Dividend Reinvestment Plan”) by the administrator of the Dividend Reinvestment Plan. Shares needed to meet the requirements of the Dividend Reinvestment Plan are either purchased in the open market or issued directly by Marathon Oil. |
(c) | As of June 30, 2014, we had repurchased 121 million common shares at a cost of $4.7 billion, which includes transaction fees and commissions that are not reported in the table above. Of this total, 13 million shares were acquired at a cost of $449 million during the second quarter of 2014. |
Incorporated by Reference | |||||||||||||
Exhibit Number | Exhibit Description | Form | Exhibit | Filing Date | SEC File No. | Filed Herewith | Furnished Herewith | ||||||
2.1++ | Separation and Distribution Agreement dated as of May 25, 2011 among Marathon Oil Corporation, Marathon Oil Company and Marathon Petroleum Corporation | 8-K | 2.1 | 5/26/2011 | 001-05153 | ||||||||
3.1 | Restated Certificate of Incorporation of Marathon Oil Corporation | 10-Q | 3.1 | 8/8/2013 | 001-05153 | ||||||||
3.2 | Amended By-Laws of Marathon Oil Corporation effective February 25, 2014 | 10-K | 3.2 | 2/28/2014 | 001-05153 | ||||||||
3.3 | Specimen of Common Stock Certificate | 10-K | 3.3 | 2/28/2014 | 001-05153 | ||||||||
4.2 | Indenture, dated as of February 26, 2002, between Marathon Oil Corporation and The Bank of New York Trust Company, N.A., successor in interest to JPMorgan Chase Bank as Trustee, relating to senior debt securities of Marathon Oil Corporation. Pursuant to CFR 229.601(b)(4)(iii), instruments with respect to long-term debt issues have been omitted where the amount of securities authorized under such instruments does not exceed 10 percent of the total consolidated assets of Marathon Oil. Marathon Oil hereby agrees to furnish a copy of any such instrument to the Securities and Exchange Commission upon its request. | 10-K | 4.2 | 2/28/2014 | 001-05153 | ||||||||
10.1 | Credit Agreement, dated as of May 28, 2014, among Marathon Oil Corporation, The Royal Bank of Scotland plc, as syndication agent, Citibank, N.A., Morgan Stanley Senior Funding, Inc. and The Bank of Nova Scotia, as documentation agents, JPMorgan Chase Bank, N.A., as administrative agent, and certain other commercial lending institutions named therein. | 8-K | 4.1 | 06/02/14 | 001-05153 | ||||||||
12.1 | Computation of Ratio of Earnings to Fixed Charges. | X | |||||||||||
31.1 | Certification of President and Chief Executive Officer pursuant to Rule 13(a)-14 and 15(d)-14 under the Securities Exchange Act of 1934. | X | |||||||||||
31.2 | Certification of Executive Vice President and Chief Financial Officer pursuant to Rule 13(a)-14 and 15(d)-14 under the Securities Exchange Act of 1934. | X | |||||||||||
32.1 | Certification of President and Chief Executive Officer pursuant to 18 U.S.C. Section 1350. | X | |||||||||||
32.2 | Certification of Executive Vice President and Chief Financial Officer pursuant to 18 U.S.C. Section 1350. | X | |||||||||||
101.INS | XBRL Instance Document. | X |
Incorporated by Reference | |||||||||||||
Exhibit Number | Exhibit Description | Form | Exhibit | Filing Date | SEC File No. | Filed Herewith | Furnished Herewith | ||||||
101.SCH | XBRL Taxonomy Extension Schema. | X | |||||||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase. | X | |||||||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase. | X | |||||||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase. | X | |||||||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase. | X | |||||||||||
++ | Marathon Oil agrees to furnish supplementally a copy of any omitted schedule to the SEC upon request. |
August 5, 2014 | MARATHON OIL CORPORATION | |
By: | ||
John R. Sult | ||
Executive Vice President and Chief Financial Officer |
Incorporated by Reference | |||||||||||||
Exhibit Number | Exhibit Description | Form | Exhibit | Filing Date | SEC File No. | Filed Herewith | Furnished Herewith | ||||||
2.1++ | Separation and Distribution Agreement dated as of May 25, 2011 among Marathon Oil Corporation, Marathon Oil Company and Marathon Petroleum Corporation | 8-K | 2.1 | 5/26/2011 | 001-05153 | ||||||||
3.1 | Restated Certificate of Incorporation of Marathon Oil Corporation | 10-Q | 3.1 | 8/8/2013 | 001-05153 | ||||||||
3.2 | Amended By-Laws of Marathon Oil Corporation effective February 25, 2014 | 10-K | 3.2 | 2/28/2014 | 001-05153 | ||||||||
3.3 | Specimen of Common Stock Certificate | 10-K | 3.3 | 2/28/2014 | 001-05153 | ||||||||
4.2 | Indenture, dated as of February 26, 2002, between Marathon Oil Corporation and The Bank of New York Trust Company, N.A., successor in interest to JPMorgan Chase Bank as Trustee, relating to senior debt securities of Marathon Oil Corporation. Pursuant to CFR 229.601(b)(4)(iii), instruments with respect to long-term debt issues have been omitted where the amount of securities authorized under such instruments does not exceed 10 percent of the total consolidated assets of Marathon Oil. Marathon Oil hereby agrees to furnish a copy of any such instrument to the Securities and Exchange Commission upon its request. | 10-K | 4.2 | 2/28/2014 | 001-05153 | ||||||||
10.1 | Credit Agreement, dated as of May 28, 2014, among Marathon Oil Corporation, The Royal Bank of Scotland plc, as syndication agent, Citibank, N.A., Morgan Stanley Senior Funding, Inc. and The Bank of Nova Scotia, as documentation agents, JPMorgan Chase Bank, N.A., as administrative agent, and certain other commercial lending institutions named therein. | 8-K | 4.1 | 06/02/14 | 001-05153 | ||||||||
12.1 | Computation of Ratio of Earnings to Fixed Charges. | X | |||||||||||
31.1 | Certification of President and Chief Executive Officer pursuant to Rule 13(a)-14 and 15(d)-14 under the Securities Exchange Act of 1934. | X | |||||||||||
31.2 | Certification of Executive Vice President and Chief Financial Officer pursuant to Rule 13(a)-14 and 15(d)-14 under the Securities Exchange Act of 1934. | X | |||||||||||
32.1 | Certification of President and Chief Executive Officer pursuant to 18 U.S.C. Section 1350. | X | |||||||||||
32.2 | Certification of Executive Vice President and Chief Financial Officer pursuant to 18 U.S.C. Section 1350. | X | |||||||||||
101.INS | XBRL Instance Document. | X |
Incorporated by Reference | |||||||||||||
Exhibit Number | Exhibit Description | Form | Exhibit | Filing Date | SEC File No. | Filed Herewith | Furnished Herewith | ||||||
101.SCH | XBRL Taxonomy Extension Schema. | X | |||||||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase. | X | |||||||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase. | X | |||||||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase. | X | |||||||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase. | X | |||||||||||
++ | Marathon Oil agrees to furnish supplementally a copy of any omitted schedule to the SEC upon request. |
Six Months Ended | |||||||
(In millions) | June 30, | ||||||
2014 | 2013 | ||||||
Portion of rentals representing interest, | |||||||
including discontinued operations | $ | 18 | $ | 13 | |||
Capitalized interest, | |||||||
including discontinued operations | 16 | 12 | |||||
Other interest and fixed charges, | |||||||
including discontinued operations | 142 | 150 | |||||
Total fixed charges (A) | $ | 176 | $ | 175 | |||
Earnings-pretax income with | |||||||
applicable adjustments (B) | $ | 1,269 | $ | 1,585 | |||
Ratio of (B) to (A) | 7.21 | 9.06 |
1. | I have reviewed this report on Form 10-Q of Marathon Oil Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | August 5, 2014 | /s/ Lee M. Tillman | |
Lee M. Tillman | |||
President and Chief Executive Officer |
1. | I have reviewed this report on Form 10-Q of Marathon Oil Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | August 5, 2014 | /s/ John R. Sult | |
John R. Sult | |||
Executive Vice President and Chief Financial Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
August 5, 2014 | |
/s/ Lee M. Tillman | |
Lee M. Tillman | |
President and Chief Executive Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
August 5, 2014 | |
/s/ John R. Sult | |
John R. Sult | |
Executive Vice President and Chief Financial Officer |
Variable Interest Entity (Details) (Variable Interest Entity, Not Primary Beneficiary [Member], USD $)
In Millions, unless otherwise specified |
6 Months Ended |
---|---|
Jun. 30, 2014
|
|
Variable Interest Entity, Not Primary Beneficiary [Member]
|
|
Variable Interest Entity [Line Items] | |
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage | 20.00% |
Recorded liability related to unconsolidated VIE | $ 3 |
Maximum exposure to loss related to unconsolidated VIE | $ 622 |
Derivatives (Details 2-Fair Value Hedges)
|
3 Months Ended | 6 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2014
USD ($)
|
Jun. 30, 2013
USD ($)
|
Jun. 30, 2014
USD ($)
|
Jun. 30, 2013
USD ($)
|
Jun. 30, 2014
Fair Value Hedging [Member]
Foreign Exchange Contract [Member]
NOK
|
Dec. 31, 2013
Fair Value Hedging [Member]
Foreign Exchange Contract [Member]
NOK
|
Jun. 30, 2014
Notes Due 2018 [Member]
Fair Value Hedging [Member]
Interest Rate Contract [Member]
USD ($)
|
Dec. 31, 2013
Notes Due 2018 [Member]
Fair Value Hedging [Member]
Interest Rate Contract [Member]
USD ($)
|
Jun. 30, 2014
Debentures Due 2017 [Member]
Fair Value Hedging [Member]
Interest Rate Contract [Member]
USD ($)
|
Dec. 31, 2013
Debentures Due 2017 [Member]
Fair Value Hedging [Member]
Interest Rate Contract [Member]
USD ($)
|
|
Derivative [Line Items] | ||||||||||
Derivative, Notional Amount | 2,870,000,000 | 2,387,000,000 | $ 300,000,000 | $ 300,000,000 | $ 600,000,000 | $ 600,000,000 | ||||
Weighted-average, LIBOR-based, floating rate | 4.48% | 4.50% | 4.64% | 4.65% | ||||||
Derivative, Average Forward Exchange Rate | 6.003 | 6.060 | ||||||||
Gain (Loss) on Fair Value Hedge Ineffectiveness, Net | $ 0 | $ 0 | $ 0 | $ 0 |
Property, Plant and Equipment Property, Plant and Equipment (Details 2) (USD $)
In Millions, unless otherwise specified |
6 Months Ended | |
---|---|---|
Jun. 30, 2014
|
Dec. 31, 2013
|
|
Total Deferred Exploratory Well Costs [Abstract] | ||
Amounts capitalized greater than one year after completion of drilling | $ 102 | $ 281 |
Capitalized Exploratory Well Cost, Period Increase (Decrease) | 179 | |
NORWAY
|
||
Total Deferred Exploratory Well Costs [Abstract] | ||
Amounts capitalized greater than one year after completion of drilling | 44 | 70 |
Angola Assets [Member]
|
||
Total Deferred Exploratory Well Costs [Abstract] | ||
Capitalized Exploratory Well Cost, Period Increase (Decrease) | 153 | |
BoylaNorway [Member]
|
||
Total Deferred Exploratory Well Costs [Abstract] | ||
Capitalized Exploratory Well Cost, Period Increase (Decrease) | $ 26 |
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