MARATHON OIL CORP [MRO] Filings

10-Q 1 mro-20240930.htm 10-Q mro-20240930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


(Mark One)
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the Quarterly Period Ended	September 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the transition period from _____ to _____

Commission file number 1-5153

Marathon Oil Corporation

(Exact name of registrant as specified in its charter)


Delaware						25-0996816
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

990 Town and Country Boulevard, Houston, Texas

77024-2217

(Address of principal executive offices)

(713) 629-6600

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, par value $1.00

MRO

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ

There were 559,410,316 shares of Marathon Oil Corporation common stock outstanding as of October 31, 2024.

MARATHON OIL CORPORATION

Unless the context otherwise indicates, references to “Marathon Oil,” “we,” “our,” or “us” in this Form 10-Q are references to Marathon Oil Corporation, including its wholly owned and majority-owned subsidiaries, and its ownership interests in equity method investees (corporate entities, partnerships, limited liability companies and other ventures over which Marathon Oil exerts significant influence by virtue of its ownership interest).

For certain industry specific terms used in this Form 10-Q, please see “Definitions” in our 2023 Annual Report on Form 10-K.


	Table of Contents
		Page
Part I - FINANCIAL INFORMATION
Item 1.	Financial Statements:
	Consolidated Statements of Income (Unaudited)	2
	Consolidated Statements of Comprehensive Income (Unaudited)	3
	Consolidated Balance Sheets (Unaudited)	4
	Consolidated Statements of Cash Flows (Unaudited)	5
	Consolidated Statements of Stockholders' Equity (Unaudited)	6
	Notes to Consolidated Financial Statements (Unaudited)	7
	1. Organization and Basis of Presentation	7
	2. Accounting Standards	7
	3. Income and Dividends per Common Share	8

	4. Revenues	8
	5. Segment Information	10
	6. Income Taxes	15
	7. Debt	15
	8. Derivatives	16
	9. Fair Value Measurements	19
	10. Property, Plant and Equipment	20
	11. Asset Retirement Obligations	21
	12. Equity Method Investments	21
	13. Stockholders' Equity	22
	14. Incentive Based Compensation	23



	15. Inventories	24


	16. Supplemental Cash Flow Information	24
	17. Commitments and Contingencies	24


Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	43
Item 4.	Controls and Procedures	43


Part II - OTHER INFORMATION
Item 1.	Legal Proceedings	44
Item 1A.	Risk Factors	44
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44
Item 5.	Other Information	44
Item 6.	Exhibits	45
	Signatures	46

Table of Contents

Part I – FINANCIAL INFORMATION

Item 1. Financial Statements

MARATHON OIL CORPORATION

Consolidated Statements of Income (Unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In millions, except per share data)	2024		2023		2024		2023
Revenues and other income:
Revenues from contracts with customers	$	1,741	$	1,771	$	4,945	$	4,822
Net gain (loss) on commodity derivatives	9		1		(14)		19
Income from equity method investments	39		38		104		140
Net gain on disposal of assets	—		1		10		6
Other income	2		2		4		19
Total revenues and other income	1,791		1,813		5,049		5,006
Costs and expenses:
Production	223		192		660		607
Shipping, handling and other operating, including related party of $18, $0, $45 and $0	204		164		548		487
Exploration	9		20		30		46
Depreciation, depletion and amortization	627		583		1,728		1,662
Impairments	1		—		1		—
Taxes other than income	99		113		298		251
General and administrative	88		72		273		225
Total costs and expenses	1,251		1,144		3,538		3,278
Income from operations	540		669		1,511		1,728
Net interest and other	(77)		(94)		(226)		(268)
Other net periodic benefit credits	3		5		8		11

Income before income taxes	466		580		1,293		1,471
Provision for income taxes	179		127		360		314
Net income	$	287	$	453	$	933	$	1,157
Net income per share:
Basic	$	0.51	$	0.75	$	1.64	$	1.88
Diluted	$	0.51	$	0.75	$	1.64	$	1.88
Weighted average common shares outstanding:
Basic	563		603		570		615
Diluted	564		604		570		616

The accompanying notes are an integral part of these consolidated financial statements.

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MARATHON OIL CORPORATION

Consolidated Statements of Comprehensive Income (Unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In millions)	2024		2023		2024		2023
Net income	$	287	$	453	$	933	$	1,157
Other comprehensive loss, net of tax



Postretirement and postemployment plans	(2)		(4)		(8)		(17)

Change in derivative hedges unrecognized gain (loss)	(7)		—		(6)		1







Other comprehensive loss	(9)		(4)		(14)		(16)
Comprehensive income	$	278	$	449	$	919	$	1,141

The accompanying notes are an integral part of these consolidated financial statements.

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MARATHON OIL CORPORATION

Consolidated Balance Sheets (Unaudited)


	September 30,		December 31,
(In millions, except par value and share amounts)	2024		2023
Assets
Current assets:
Cash and cash equivalents	$	134	$	155
Receivables, net	1,136		1,152
Inventories	166		186
Other current assets	48		76
Total current assets	1,484		1,569
Equity method investments	432		433
Property, plant and equipment, net of accumulated depreciation, depletion and amortization of $27,537 and $25,914	17,220		17,213


Other noncurrent assets	286		360
Total assets	$	19,422	$	19,575
Liabilities
Current liabilities:
Accounts payable	$	1,390	$	1,364
Commercial paper	180		450
Payroll and benefits payable	96		70
Accrued taxes	179		126
Other current liabilities	321		312
Long-term debt due within one year	—		1,600
Total current liabilities	2,166		3,922
Long-term debt	4,573		3,378
Deferred tax liabilities	603		419
Defined benefit postretirement plan obligations	86		93
Asset retirement obligations	341		326
Deferred credits and other liabilities	218		232
Total liabilities	7,987		8,370
Commitments and contingencies (Note 17)
Stockholders’ Equity
Preferred stock – no shares issued or outstanding (no par value, 26 million shares authorized)	—		—
Common stock:
Issued – 937 million shares (par value $1 per share, 1.925 billion shares authorized at September 30, 2024 and December 31, 2023)	937		937
Held in treasury, at cost – 378 million shares and 360 million shares	(9,432)		(8,952)
Additional paid-in capital	7,151		7,172
Retained earnings	12,711		11,966
Accumulated other comprehensive income	68		82
Total stockholders’ equity	11,435		11,205
Total liabilities and stockholders’ equity	$	19,422	$	19,575

The accompanying notes are an integral part of these consolidated financial statements.

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MARATHON OIL CORPORATION

Consolidated Statements of Cash Flows (Unaudited)


	Nine Months Ended
	September 30,
(In millions)	2024		2023
Increase (decrease) in cash and cash equivalents
Operating activities:
Net income	$	933	$	1,157
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization	1,728		1,662
Impairments	1		—
Exploratory dry well costs and unproved property impairments	25		41
Net gain on disposal of assets	(10)		(6)

Deferred income taxes	188		264
Unrealized loss on derivative instruments, net	14		8


Pension and other post retirement benefits, net	(18)		(27)
Stock-based compensation	36		32
Equity method investments, net	(8)		99
Changes in:
Current receivables	17		(298)
Inventories	20		(51)
Current accounts payable and accrued liabilities	94		166
Other current assets and liabilities	(8)		(17)
All other operating, net	42		(23)
Net cash provided by operating activities	3,054		3,007
Investing activities:
Capital expenditures	(1,726)		(1,673)
Change in capital accrual	44		14

Acquisitions, net of cash acquired	(4)		(15)
Disposal of assets, net of cash transferred to the buyer	11		(7)
Equity method investments - return of capital	10		57

Net cash used in investing activities	(1,665)		(1,624)
Financing activities:
Borrowings	1,200		200
Debt repayments	(1,600)		(401)
Proceeds from revolving credit facility	450		1,018
Repayments of revolving credit facility	(450)		(1,468)
(Repayments) proceeds from commercial paper borrowings, net	(270)		450

Shares repurchased under buyback programs	(516)		(1,121)
Dividends paid	(188)		(186)
Withholding tax on stock-based incentive awards	(19)		(31)
All other financing, net	(17)		(4)
Net cash used in financing activities	(1,410)		(1,543)

Net decrease in cash and cash equivalents	(21)		(160)
Cash and cash equivalents at beginning of period	155		334
Cash and cash equivalents at end of period	$	134	$	174

The accompanying notes are an integral part of these consolidated financial statements.

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MARATHON OIL CORPORATION

Consolidated Statements of Stockholders’ Equity (Unaudited)


	Total Equity of Marathon Oil Stockholders
(In millions)	Preferred Stock		Common Stock		Treasury Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income		Total Equity
Nine Months Ended September 30, 2023
December 31, 2022 Balance	$	—	$	937	$	(7,512)	$	7,203	$	10,663	$	106	$	11,397
Shares repurchased under buyback programs	—		—		(334)		—		—		—		(334)
Excise tax on shares repurchased	—		—		(3)		—		—		—		(3)
Stock-based compensation	—		—		35		(54)		—		—		(19)
Net income	—		—		—		—		417		—		417
Other comprehensive loss	—		—		—		—		—		(7)		(7)
Dividends paid (per share amount of $0.10)	—		—		—		—		(63)		—		(63)
March 31, 2023 Balance	$	—	$	937	$	(7,814)	$	7,149	$	11,017	$	99	$	11,388
Shares repurchased under buyback programs	—		—		(372)		—		—		—		(372)
Excise tax on shares repurchased	—		—		(3)		—		—		—		(3)
Stock-based compensation	—		—		1		10		—		—		11
Net income	—		—		—		—		287		—		287
Other comprehensive loss	—		—		—		—		—		(5)		(5)
Dividends paid (per share amount of $0.10)	—		—		—		—		(62)		—		(62)
June 30, 2023 Balance	$	—	$	937	$	(8,188)	$	7,159	$	11,242	$	94	$	11,244
Shares repurchased under buyback programs	—		—		(415)		—		—		—		(415)
Excise tax on shares repurchased	—		—		(4)		—		—		—		(4)
Stock-based compensation	—		—		9		4		—		—		13
Net income	—		—		—		—		453		—		453
Other comprehensive loss	—		—		—		—		—		(4)		(4)
Dividends paid (per share amount of $0.10)	—		—		—		—		(61)		—		(61)
September 30, 2023 Balance	$	—	$	937	$	(8,598)	$	7,163	$	11,634	$	90	$	11,226

Nine Months Ended September 30, 2024
December 31, 2023 Balance	$	—	$	937	$	(8,952)	$	7,172	$	11,966	$	82	$	11,205
Shares repurchased under buyback programs	—		—		(285)		—		—		—		(285)
Excise tax on shares repurchased	—		—		(2)		—		—		—		(2)
Stock-based compensation	—		—		38		(43)		—		—		(5)
Net income	—		—		—		—		297		—		297
Other comprehensive loss	—		—		—		—		—		(2)		(2)
Dividends paid (per share amount of $0.11)	—		—		—		—		(64)		—		(64)
March 31, 2024 Balance	$	—	$	937	$	(9,201)	$	7,129	$	12,199	$	80	$	11,144
Shares repurchased under buyback programs	—		—		(231)		—		—		—		(231)
Excise tax on shares repurchased	—		—		(3)		—		—		—		(3)
Stock-based compensation	—		—		1		12		—		—		13
Net income	—		—		—		—		349		—		349
Other comprehensive loss	—		—		—		—		—		(3)		(3)
Dividends paid (per share amount of $0.11)	—		—		—		—		(63)		—		(63)
June 30, 2024 Balance	$	—	$	937	$	(9,434)	$	7,141	$	12,485	$	77	$	11,206


Stock-based compensation	—		—		2		10		—		—		12
Net income	—		—		—		—		287		—		287
Other comprehensive loss	—		—		—		—		—		(9)		(9)
Dividends paid (per share amount of $0.11)	—		—		—		—		(61)		—		(61)
September 30, 2024 Balance	$	—	$	937	$	(9,432)	$	7,151	$	12,711	$	68	$	11,435

The accompanying notes are an integral part of these consolidated financial statements.

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MARATHON OIL CORPORATION

Notes to Consolidated Financial Statements (Unaudited)

1. Organization and Basis of Presentation

We are an independent oil and gas exploration and production company with a focus on U.S. resource plays: Eagle Ford in Texas, Bakken in North Dakota, Permian in New Mexico and Texas and STACK and SCOOP in Oklahoma. Our U.S. assets are complemented by our international operations in E.G.

Proposed Merger with ConocoPhillips

On May 28, 2024, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with ConocoPhillips, a Delaware corporation (“ConocoPhillips”), and Puma Merger Sub Corp., a wholly owned subsidiary of ConocoPhillips (“Merger Sub”). The Merger Agreement provides that, among other things and subject to the terms and conditions of the Merger Agreement, Merger Sub be merged with and into Marathon Oil (the “Merger”), with Marathon Oil surviving and continuing as the surviving corporation in the Merger as a direct, wholly owned subsidiary of ConocoPhillips. Under the terms of the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each of our outstanding shares of common stock (other than certain Excluded Shares and Converted Shares, each as defined in the Merger Agreement) will be converted to the right to receive 0.2550 (the “Exchange Ratio”) shares of ConocoPhillips common stock (the “Merger Consideration”). The Merger Agreement also contains certain customary termination rights of each of Marathon Oil and ConocoPhillips, and under certain circumstances, a termination fee would be payable by us. On August 29, 2024, the Company’s stockholders approved and adopted the Merger Agreement at a special meeting of stockholders. Completion of the Merger remains subject to certain conditions, including certain governmental and regulatory approvals. The Merger is currently expected to close late in the fourth quarter of 2024; however, no assurance can be given as to when, or if, the Merger will occur. See Item 1A. Risk Factors for a discussion of the risks related to the Merger and Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations for additional details relating to the Merger.

In association with the Merger, for the three and nine months ended September 30, 2024, we have incurred transaction costs of $6 million and $16 million, respectively, which are recorded as general and administrative expense in the consolidated statements of income. We expect to incur additional costs as the Merger progresses. Transaction costs consist primarily of third party legal and banking fees.

The above description of the Merger Agreement and the transactions contemplated thereby, including certain referenced terms, is a summary of certain principal terms and conditions contained in the Merger Agreement.

Basis of Presentation

These consolidated financial statements are unaudited; however, in the opinion of management, these statements reflect all adjustments necessary for a fair statement of the results for the periods reported. All such adjustments are of a normal recurring nature unless disclosed otherwise. These consolidated financial statements, including notes, have been prepared in accordance with the applicable rules of the SEC and do not include all of the information and disclosures required by U.S. GAAP for complete financial statements.

These interim financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2023 Annual Report on Form 10-K. The results of operations for the third quarter and first nine months of 2024 are not necessarily indicative of the results to be expected for the full year.

2. Accounting Standards

Accounting Standards Updates Adopted

No accounting standards were adopted during the first nine months of 2024 that had a material impact on our consolidated financial statements.

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MARATHON OIL CORPORATION

Notes to Consolidated Financial Statements (Unaudited)

Accounting Standards Updates Not Yet Adopted

In November 2023, the FASB issued a new accounting standards update to improve the disclosures around a public entity’s reportable segments. The standard requires disclosure of significant segment expenses included within each reported measure of segment profit or loss. This standard is effective for annual reporting periods beginning after December 15, 2023, and interim reporting periods within annual reporting periods beginning after December 15, 2024, with early adoption permitted. The standard is effective for us in the 2024 annual reporting period and will be applied retrospectively to all prior periods presented in the financial statements. This standard only modifies disclosure requirements; as such, there will be no impact on our consolidated results of operations, financial position or cash flows.

In December 2023, the FASB issued a new accounting standards update to improve income tax disclosures primarily related to the rate reconciliation and income taxes paid. The standard requires consistent categories and greater disaggregation of information in the rate reconciliation and income taxes paid by jurisdiction. The standard is effective for annual periods beginning after December 15, 2024, with early adoption permitted. This standard is effective for us in the 2025 annual reporting period and will be applied retrospectively to all prior periods presented in the financial statements. The standard only modifies disclosure requirements; as such, there will be no impact on our consolidated results of operations, financial position or cash flows.

There were no other issued but pending accounting standards expected to have a material impact on our consolidated financial statements.

3. Income and Dividends per Common Share

Basic income per share is based on the weighted average number of common shares outstanding. Diluted income per share assumes exercise of stock options and performance units in all periods, provided the effect is not antidilutive. The per share calculations below exclude an immaterial number of antidilutive stock options and performance units for the three and nine months ended September 30, 2024. In addition, the per share calculations below exclude 1 million of antidilutive stock options and performance units for the three and nine months ended September 30, 2023:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions, except per share data)	2024		2023		2024		2023
Net income	$	287	$	453	$	933	$	1,157

Weighted average common shares outstanding	563		603		570		615
Effect of dilutive securities	1		1		—		1
Weighted average common shares, diluted	564		604		570		616
Net income per share:
Basic	$	0.51	$	0.75	$	1.64	$	1.88
Diluted	$	0.51	$	0.75	$	1.64	$	1.88

Dividends per share	$	0.11	$	0.10	$	0.33	$	0.30

Under the Merger Agreement, we are subject to restrictions that prevent us from increasing our quarterly dividend in excess of $0.11 per share.

4. Revenues

The majority of our revenues are derived from the sale of crude oil and condensate, NGLs and natural gas, including LNG, under spot and term agreements with our customers in the United States and Equatorial Guinea.

As of September 30, 2024 and December 31, 2023, receivables from contracts with customers, included in receivables, net, were $905 million and $886 million, respectively.

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MARATHON OIL CORPORATION

Notes to Consolidated Financial Statements (Unaudited)

The following tables present our revenues from contracts with customers disaggregated by product type and geographic areas for the three and nine months ended September 30:

United States


	Three Months Ended September 30, 2024
(In millions)	Eagle Ford		Bakken		Permian		Oklahoma		Other U.S.		Total
Crude oil and condensate	$	589	$	489	$	214	$	48	$	10	$	1,350
NGLs	78		44		28		27		—		177
Natural gas	37		10		—		22		—		69
Other	3		—		—		—		16		19
Revenues from contracts with customers	$	707	$	543	$	242	$	97	$	26	$	1,615


	Three Months Ended September 30, 2023
(In millions)	Eagle Ford		Bakken		Permian		Oklahoma		Other U.S.		Total
Crude oil and condensate	$	587	$	580	$	164	$	64	$	13	$	1,408
NGLs	80		47		20		30		—		177
Natural gas	48		20		12		31		1		112
Other	2		—		—		—		1		3
Revenues from contracts with customers	$	717	$	647	$	196	$	125	$	15	$	1,700


	Nine Months Ended September 30, 2024
(In millions)	Eagle Ford		Bakken		Permian		Oklahoma		Other U.S.		Total
Crude oil and condensate	$	1,610	$	1,436	$	604	$	162	$	34	$	3,846
NGLs	203		130		69		89		—		491
Natural gas	101		37		9		72		1		220
Other	6		—		—		—		25		31
Revenues from contracts with customers	$	1,920	$	1,603	$	682	$	323	$	60	$	4,588


	Nine Months Ended September 30, 2023
(In millions)	Eagle Ford		Bakken		Permian		Oklahoma		Other U.S.		Total
Crude oil and condensate	$	1,606	$	1,467	$	475	$	205	$	35	$	3,788
NGLs	215		125		60		102		—		502
Natural gas	141		69		30		95		2		337
Other	5		—		—		—		11		16
Revenues from contracts with customers	$	1,967	$	1,661	$	565	$	402	$	48	$	4,643

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MARATHON OIL CORPORATION

Notes to Consolidated Financial Statements (Unaudited)

International (E.G.)


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2024		2023		2024		2023
Crude oil and condensate	$	53	$	64	$	142	$	160
NGLs	—		1		1		2

Natural gas, sold as gas	1		5		5		14
Natural gas, sold as LNG	72		—		207		—
Natural gas, total	73		5		212		14
Other	—		1		2		3
Revenues from contracts with customers	$	126	$	71	$	357	$	179

5. Segment Information

We have two reportable operating segments. Both of these segments are organized and managed based upon geographic location and the nature of the products and services offered.

•United States (“U.S.”) – explores for, produces and markets crude oil and condensate, NGLs and natural gas in the United States; and

•International (“Int’l”) – explores for, produces and markets crude oil and condensate, NGLs and natural gas outside of the United States as well as produces and markets products manufactured from natural gas, such as LNG and methanol, in Equatorial Guinea (“E.G.”)

Segment income represents income that excludes certain items not allocated to our operating segments, net of income taxes. A portion of our corporate and operations general and administrative support costs are not allocated to the operating segments. These unallocated costs primarily consist of employment costs (including pension effects), professional services, facilities and other costs associated with corporate and operations support activities. Additionally, items which affect comparability such as: gains or losses on dispositions, impairments of proved and certain unproved properties, dry wells, changes in our valuation allowance, unrealized gains or losses on commodity and interest rate derivative instruments, effects of pension settlements and curtailments, expensed transaction costs for business combinations or other items (as determined by the chief operating decision maker (“CODM”)) are not allocated to operating segments.

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MARATHON OIL CORPORATION

Notes to Consolidated Financial Statements (Unaudited)


	Three Months Ended September 30, 2024
(In millions)	U.S.		Int’l		Not Allocated to Segments			Total
Revenues from contracts with customers	$	1,615	$	126	$	—		$	1,741
Net gain on commodity derivatives	—		—		9		(b)	9
Income from equity method investments	—		39		—			39

Other income (expense)	(1)		2		1			2
Less costs and expenses:
Production	209		14		—			223
Shipping, handling and other operating, including related party	187		17		—			204
Exploration	9		—		—			9
Depreciation, depletion and amortization	611		11		5			627
Impairments	—		—		1			1
Taxes other than income	99		—		—			99
General and administrative	39		3		46		(c)	88
Net interest and other	—		—		77			77
Other net periodic benefit credits	—		—		(3)			(3)

Income tax provision	98		27		54		(d)	179
Segment income (loss)	$	362	$	95	$	(170)		$	287
Total assets	$	18,443	$	882	$	97		$	19,422
Capital expenditures(a)	$	454	$	3	$	1		$	458

(a)Includes accruals and excludes acquisitions.

(b)Unrealized gain on commodity derivative instruments (See Note 8).

(c)Includes $6 million of transaction costs associated with the Merger with ConocoPhillips (See Note 1).

(d)Includes a $75 million deferred tax valuation allowance against foreign tax credits (See Note 6).

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MARATHON OIL CORPORATION

Notes to Consolidated Financial Statements (Unaudited)


	Three Months Ended September 30, 2023
(In millions)	U.S.		Int’l		Not Allocated to Segments			Total
Revenues from contracts with customers	$	1,700	$	71	$	—		$	1,771
Net gain (loss) on commodity derivatives	7		—		(6)		(b)	1
Income from equity method investments	—		38		—			38
Net gain on disposal of assets	—		—		1			1
Other income	—		1		1			2
Less costs and expenses:
Production	173		19		—			192
Shipping, handling and other operating, including related party	162		2		—			164
Exploration	8		1		11		(c)	20
Depreciation, depletion and amortization	570		12		1			583

Taxes other than income	112		—		1			113
General and administrative	32		3		37			72
Net interest and other	—		—		94			94
Other net periodic benefit credits	—		—		(5)			(5)

Income tax provision (benefit)	145		11		(29)			127
Segment income (loss)	$	505	$	62	$	(114)		$	453
Total assets	$	18,503	$	1,072	$	344		$	19,919
Capital expenditures(a)	$	444	$	1	$	4		$	449

(a)Includes accruals and excludes acquisitions.

(b)Unrealized loss on commodity derivative instruments (See Note 8).

(c)Includes $11 million of unproved impairments related to Permian exploration leases.

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MARATHON OIL CORPORATION

Notes to Consolidated Financial Statements (Unaudited)


	Nine Months Ended September 30, 2024
(In millions)	U.S.		Int’l		Not Allocated to Segments			Total
Revenues from contracts with customers	$	4,588	$	357	$	—		$	4,945
Net loss on commodity derivatives	—		—		(14)		(b)	(14)
Income from equity method investments	—		104		—			104
Net gain on disposal of assets	—		—		10		(c)	10
Other income (expense)	(4)		5		3			4
Less costs and expenses:
Production	608		52		—			660
Shipping, handling and other operating, including related party	491		47		10			548
Exploration	26		—		4			30
Depreciation, depletion and amortization	1,673		31		24			1,728
Impairments	—		—		1			1
Taxes other than income	298		—		—			298
General and administrative	118		10		145		(d)	273
Net interest and other	—		—		226			226
Other net periodic benefit credits	—		—		(8)			(8)

Income tax provision (benefit)	295		70		(5)		(e)	360
Segment income (loss)	$	1,075	$	256	$	(398)		$	933
Total assets	$	18,443	$	882	$	97		$	19,422
Capital expenditures(a)	$	1,712	$	7	$	7		$	1,726

(a)Includes accruals and excludes acquisitions.

(b)Unrealized loss on commodity derivative instruments (See Note 8).

(c)Pertains to a gain from the sale of a legacy royalty interest in the state of California.

(d)Includes $16 million of transaction costs associated with the Merger with ConocoPhillips (See Note 1).

(e)Includes a $75 million deferred tax valuation allowance against foreign tax credits (See Note 6).

Table of Contents

MARATHON OIL CORPORATION

Notes to Consolidated Financial Statements (Unaudited)


	Nine Months Ended September 30, 2023
(In millions)	U.S.		Int’l		Not Allocated to Segments		Total
Revenue from contracts with customers	$	4,643	$	179	$	—	$	4,822
Net gain (loss) on commodity derivatives	27