Dispositions

12 Months Ended

Dec. 31, 2019

Discontinued Operations and Disposal Groups [Abstract]

Dispositions

Dispositions

United States Segment

In the third quarter of 2018, we closed on the sale of non-core, non-operated conventional properties, primarily in the Gulf of Mexico, for combined net proceeds of $16 million, before closing adjustments. A pre-tax gain of $32 million was recognized in the third quarter of 2018.

International Segment

On July 1, 2019, we closed on the sale of our U.K. business (Marathon Oil U.K. LLC and Marathon Oil West of Shetlands Limited), for proceeds of $95 million which reflects the assumption by RockRose Energy PLC (“RockRose”) of the U.K. business’ working capital and cash equivalent balances of approximately $345 million on December 31, 2018. During the third quarter of 2019, we recorded a $6 million liability and corresponding expense related to the estimated fair value of our exposure to surety bonds we continued to hold that guaranteed decommissioning liabilities of Marathon Oil U.K. LLC. In November 2019, RockRose posted replacement security and accordingly, we reversed the aforementioned $6 million (see Note 25 for further detail). Income before taxes relating to our U.K. business for the year ended December 31, 2019 and 2018, was $33 million and $261 million, respectively. See Note 12 and Note 19 for additional details on U.K. ARO and the defined benefit pension plan as it relates to this disposition.

In the second quarter of 2019, we closed on the sale of our 15% non-operated interest in the Atrush block in Kurdistan for proceeds of $63 million, before closing adjustments. This property was classified as held for sale in the consolidated balance sheet at December 31, 2018, with total assets of $58 million and total liabilities of $17 million.

In the first quarter of 2018, we closed on the sale of our subsidiary, Marathon Oil Libya Limited, which held our 16.33% non-operated interest in the Waha concessions in Libya, to a subsidiary of Total S.A. (Elf Aquitaine SAS) for proceeds of approximately $450 million, excluding closing adjustments, and recognized a pre-tax gain of $255 million.

Canadian Business – Discontinued Operations

On May 31, 2017 we closed on the sale of our Canadian business, which included our 20% non-operated interest in the AOSP to Shell and Canadian Natural Resources Limited for $2.5 billion, excluding closing adjustments. Under the terms of the agreement, $1.8 billion was paid to us upon closing. At closing we received two notes receivable for a combined $750 million for the remaining proceeds, which was received in the first quarter of 2018. In the first quarter of 2017, we recorded a non-cash impairment charge of $6.6 billion (after-tax of $4.96 billion) primarily related to the property, plant and equipment of our Canadian business. This impairment was recorded for excess net book value over anticipated sales proceeds less costs to sell. Fair values of assets held for sale were determined based upon the anticipated sales proceeds less costs to sell, which resulted in a level 2 classification. As the effective date of the transaction was January 1, 2017, we recorded a loss on sale of $43 million during the second quarter of 2017 due to results of operations from our Canadian business that were transferred to the buyer upon closing.

Our Canadian business is reflected as discontinued operations in the consolidated statements of income and the consolidated statements of cash flows for all periods presented. The following table contains select amounts reported in our historical consolidated statements of income and consolidated statements of cash flows as discontinued operations:

	Year Ended December 31,
(In millions)	2017
Total revenue and other income	$	431
Net loss on disposal of assets	(43		)
Total revenues and other income	388
Costs and expenses:
Production	254
Depreciation, depletion and amortization	40
Impairments	6,636
Other	25
Total costs and expenses	6,955
Pretax loss from discontinued operations	(6,567		)
Benefit for income taxes	(1,674		)
Loss from discontinued operations	$	(4,893	)

	Year Ended December 31,
(In millions)	2017
Cash flow from discontinued operations:
Operating activities	$	141
Investing activities	(13		)
Changes in cash included in current assets held for sale	2
Net increase in cash and cash equivalents of discontinued operations	$	130