OSU Energy Conference The Benefits of Demerging

Similar documents
SANFORD C. BERNSTEIN 30 TH ANNUAL STRATEGIC DECISIONS CONFERENCE 2014

Built to Grow through Cycles

The construction or provision of oil rigs, drilling. equipment, including seismic data collection.

T H E P O W E R OF T H E P E R M I A N

Sandeep Bhakhri SVP and Chief Information and Technology Officer

Second Quarter 2014 Earnings Conference Call and Webcast

UBS GLOBAL OIL AND GAS CONFERENCE MAY 19-22, 2014

US E&P benchmark study. June 2012

Fourth quarter 2018 earnings conference call and webcast

Analyst's Notes. Argus Recommendations

Corporate overview. Mike Wirth Chairman and Chief Executive Officer Chevron Corporation

Jefferies 2012 Global Energy Conference November 2012 Matt Fox EVP, Exploration and Production

Investor Presentation. March 2019

Oil Report 1Q 2017 Earnings Summary for International Oil Companies (IOCs) & Outlook

THE MONTHLY RESEARCH CONFERENCE CALL ENERGY: SECTOR OUTLOOK AND INVESTMENT OPPORTUNITES ARGUS MODERATOR. Jim Kelleher, CFA Director of Research

Permian Basin & Eagle Ford Shale from a Global Perspective. Art Berman Labyrinth Consulting Services, Inc.

Oil Report 4Q 2016 Earnings Summary for International Oil Companies (IOCs) & Outlook

Investor Presentation. November 2018

The future ain t what it used to be.

P o w e r o f t h e P e r m i a n M A Y 2018

Oil Value Chain & Markets. Global Oil Markets

Occidental Petroleum California Oil Story Could Get More Interesting

Third quarter 2017 earnings conference call and webcast

chesapeake energy corporation 2014 annual Report

Oil and Gas Investment to 2010

In for the Long Haul Why Lower Oil Prices will be Good for You!

CHESAPEAKE ENERGY: THE TRANSFORMATION AND THE FUTURE

The VoLo Foundation. 2 C Scenario Analysis - Oil & Gas Industry. Andrew Stevenson May 2018

Oil Report 2Q 2017 Earnings Summary for International Oil Companies (IOCs) & Outlook

Piranha! The Piranhaization of U.S. E&P

where we stand where we are going

Fourth Quarter 2010 Earnings Conference Call and Webcast January 31, David Rosenthal Vice President Investor Relations & Secretary

ConocoPhillips Reports Fourth-Quarter and Full-Year 2014 Results; Strong Reserve Replacement; Further Reduces 2015 Capital

US oil and gas reserves study

Southwestern Energy Co. Low Natural Gas Prices Dim Earnings Outlook

Scotia Howard Weil Energy Conference

Houston CFA Society March 2016

OCCIDENTAL PETROLEUM CORPORATION

Robert Haddad Ashley Hughes AmirAli Motamedi Masoudieh

Global oil and gas reserves study

GLOBAL E&P TRANSACTIONS H REVIEW PARTIAL PULL BACK FROM 2010 HIGHS

Oil & Gas Outlook. Brian M. Gibbons, Jr., CFA

Scotia Howard Weil Energy Conference. March 25-26, 2019

Independent Stock Idea Intraday November 2, 2017

Russian Natural Gas Canadian Tar Sands Offshore Drilling

Oilfield Services and Equipment Sector Market Opportunity Update

Global oil and gas reserves study

Key Crude Oil Production Commentary

Second Quarter 2013 Earnings Conference Call and Webcast

Permian Reserves May Be Much Smaller Than You Think: Tight Oil and Long-Term Debt Cycle

FOURTH QUARTER Financial and Operational Review. February 15, 2017

2012 Annual Meeting. May 30, 2012

Meter Reader A Weekly Analysis of Large Cap Oil and Gas Stocks February 10, 2009

ACQUISITION OF WILDHORSE RESOURCE DEVELOPMENT CORPORATION October 30, 2018

Occidental Petroleum Corporation

2015 Plan. Operations

Meter Reader A Weekly Analysis of Large Cap Oil and Gas Stocks January 3, 2012

Meter Reader A Weekly Analysis of Large Cap Oil and Gas Stocks April 5, 2011

Meter Reader A Weekly Analysis of Large Cap Oil and Gas Stocks September 20, 2011

Devon Energy Corporation NYSE: DVN

The Case for Energy Investment

CRS Report for Congress

Value Creation by Independent Producers Update Report

First quarter 2018 earnings conference call and webcast

U.S. Leader in Return on Capital Employed. Among Lowest Cost Producers in Global Oil Market. Commitment to Safety and the Environment

Octavio Molmenti Head of Energy Latin America January 2012

US oil and gas reserves study

EXXON MOBIL CORPORATION ANNOUNCES ESTIMATED FOURTH QUARTER 2011 RESULTS % %

Third Quarter 2012 Earnings Call

Audio Webcast. May 14, :30 a.m. CT

Exploration A Decade of Success

Chevron Reports Third Quarter Net Income of $2.0 Billion

J.P. Morgan Investor Conference

CHEVRON REPORTS SECOND QUARTER NET INCOME OF $5.4 BILLION, UP FROM $1.7 BILLION IN SECOND QUARTER 2009

Forward-Looking Statements

where we stand where we are going

Seismic shifts in the oil and gas business

Executive Summary. EOG Resources October 3, Financials. Operations. Competitors & Regional Factors.

INVESTOR UPDATE EP ENERGY CORPORATION SEPTEMBER 2018

HESS CORPORATION INVESTOR RELATIONS PRESENTATION

4Q13 Earnings Presentation

Energy Industry Data and Trends Supplemental Slides: The Art of the Share Buyback. October 2017

Upstream overview. Roland Perdacher Director Domestic Assets Business Unit

Another Technological Revolution in the O&G Industry: A new Future for Onshore E&P. Ivan Sandrea Advisor to Petra Energia

2Q14 Earnings Presentation

Second Quarter 2008 Earnings Conference Call and Webcast

Devon Energy Corporation (DVN-NYSE)

Performance Profiles of Major Energy Producers 2007

Meter Reader A Weekly Analysis of Energy Stocks Using the McDep Ratio February 15, Crude Awakening

icon Unconventional Resource Finance NGI Annual Affiliates Meeting and Research Review November 9 th, 2017

THE TRANSFORMATION AND THE FUTURE. Doug Lawler President and Chief Executive Officer

CHEVRON REPORTS FOURTH QUARTER NET INCOME OF $5.1 BILLION, COMPARED TO $5.3 BILLION IN FOURTH QUARTER 2010

Overview of Canada s Oil Sands Industry

Chevron Reports Third Quarter Net Income of $5.3 Billion, Compared to $7.8 Billion in Third Quarter 2011

Scotia Howard Weil Energy Conference Occidental Petroleum March 25, Cedric Burgher Chief Financial Officer

Meter Reader A Weekly Analysis of Large Cap Oil and Gas Stocks March 2, 2010 Oil Growth of 70% to 2020 for COSWF

Noble Energy Announces First Quarter 2012 Results

The Persian Gulf s predominance endangered? Amrita Sen, 13 November 2013

Industry Idea Analysis of Oil and Gas Stocks September 1, 2015

The Economic Transformation of the Caspian Region and the Falling Price of Oil

Transcription:

OSU Energy Conference The Benefits of Demerging April 17, 2012 Howard J. Thill VP Investor Relations & Public Affairs

Forward-Looking Statement Except for historical information, this presentation contains forward-looking information including, but not limited to, the timing and levels of the Company's worldwide liquid hydrocarbon and natural gas production, synthetic crude production, the Eagle Ford, Anadarko Woodford, Bakken, DJ Basin (Niobrara), Oil Sands Mining, Angola and other existing and potential development projects, anticipated future exploratory and development drilling activity, the possibility of a new significant resource base in Kurdistan, the capital spending forecast, and expectations of reserve replacement. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied from such information. In accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, has included in its Annual Report on Form 10-K for the year ended December 31, 2011, and subsequent Forms 8-K, cautionary language identifying important factors, though not necessarily all such factors, that could cause future outcomes to differ materially from those set forth in the forward-looking statements. 2

Established in 1887 Global Independent E&P Employees: ~3,300 Headquartered in Houston, Texas Focused on: Safety Profitable growth Liquids-rich resources Social responsibility 3

Announced Spin-offs ITT (Defense, Water and Engineered products) Motorola ConocoPhillips (Upstream and downstream) Williams (Pipelines and E&P) Valero (NuStar) Sunoco (SunCoke) Abbott Expedia (TripAdvisor) 4

Anticipated Spin-off Benefits Enhanced flexibility to pursue tailored strategies - each company will have a greater ability to make business and operational decisions in the best interests of its business and to allocate capital and corporate resources with a focus on achieving its own strategic priorities Expanded growth opportunities a more focused business strategy will result in an expanded portfolio of attractive growth opportunities for each company Strengthened ability to attract and retain talent more focused business models will enhance each company s ability to attract and retain individuals with the appropriate skill sets as well as to better align compensation and incentives with the performance of these different businesses Superior transparency improved investor focus as independent energy companies, analysis and investment decisions will be more transparent, allow for more specific comparisons against peers, competitors, benchmarks and performance metrics and thus facilitate evaluation assessments which will likely make the two companies appeal to different sets of shareholders seeking to invest in specific segments of the oil and gas industry 5

Typical Objectives and Hurdles Two strong, investment grade companies Credit rating agencies Each with sufficient liquidity and financial flexibility to pursue their strategic objectives Division of assets, including cash Spin-off intended to be tax-free to the corporation and domestic shareholders IRS private letter ruling Separation of non-operating assets IT, telecommunications HR, including employee tracking and payroll systems Other corporate services, Accounting, Legal, HES, IR/PA, etc Corporate offices 6

Marathon Oil - Pre June 30, 2011 Fourth largest U.S. based integrated oil Fifth largest refining operation Estimated upstream production growth 3-5% CAGR Invested in major downstream projects 7

National Oil Companies 8

National Oil Companies Russia Iran Saudi Arabia Canada Qatar Iraq United Arab Emirates Venezuela Kuwait Nigeria United States Libya Kazakhstan Algeria China Azerbaijan Exxon Mobil Brazil Angola Mexico 0 100 200 300 400 Proven Reserves, BBOE Source: 2011 World Fact Book 9

Integrated Oils Market Cap - $ Billions ExxonMobil 387 Shell 208 Chevron 201 BP 134 Total 114 ConocoPhillips (but not for much longer) 94 Marathon Oil + Marathon Petroleum 35 Hess 19 * Source: Factset at close of business April 10, 2012 10

Writing the Next Chapter for The Ohio Oil Company Spun off Marathon Petroleum Corporation June 30, 2011 Well positioned versus peers Strong balance sheets Experienced and focused management teams Enhanced flexibility to pursue tailored strategies Expanded growth opportunities Superior transparency improved investor focus 11

Independent E&P s Market Cap - $ Billions Oxy 73 Anadarko 38 Apache 36 Devon 28 EOG 28 Marathon Oil 21 Hess 19 Noble 17 Chesapeake 14 Encana 13 Talisman 13 Murphy 10 * Source: Factset at close of business April 10, 2012 12

High Liquids Content 2011 Liquids as % of Total Production High leverage to liquids Source: Company annual reports Includes OSM results for applicable companies Comparator group contains: APA, APC, CHK, DVN, ECA, EOG, HES, MRO, MUR, NBL, OXY, TLM 13

Very Competitive E&P Cost Structure MRO #6 on Total Expenses MRO #1 on Total Expenses excluding non-cash items High leverage to liquids Competitive cost structure Total Expense = Production + S&H + Exploration + DD&A expense + Taxes other than income Source: Company annual reports. Oil/Gas ratio of 6:1 Excludes OSM results from applicable companies Comparator group contains: APA, APC, CHK, DVN, ECA, EOG, HES, MRO, MUR, NBL, OXY, TLM Total Expense excluding non-cash items = Production + S&H + Exploration expense + Taxes other than income Source: Company annual reports. Oil/Gas ratio of 6:1 Excludes OSM results from applicable companies Comparator group contains: APA, APC, CHK, DVN, ECA, EOG, HES, MRO, MUR, NBL, OXY, TLM 14

High Income per Barrel Business 2011 Income per BOE High leverage to liquids Competitive cost structure Fourth highest income per BOE Source: Company annual reports Includes OSM results and excludes R&M income and discontinued operations from applicable companies Comparator group contains: APA, APC, CHK, DVN, ECA, EOG, HES, MRO, MUR, NBL, OXY, TLM 15

Continued Focus on Returns 2011 ROCE High leverage to liquids Competitive cost structure Fourth highest income per BOE Liquids focus and high income per BOE drive strong ROCE Source: Company annual reports Includes OSM results and excludes R&M income and discontinued operations from applicable companies Comparator group contains: APA, APC, CHK, DVN, ECA, EOG, HES, MRO, MUR, NBL, OXY, TLM 16

Analysis of Investment Style CURRENT BREAKDOWN OF PORTFOLIO TURNOVER (% of Institutional Shares) HISTORICAL BREAKDOWN OF PORTFOLIO TURNOVER (% of Institutional Shares) 35.0% Specialty 12.8% GARP 8.4% Growth 26.2% 30.0% 25.0% 20.0% Income 7.2% 15.0% 10.0% Value 23.2% Index 22.2% 5.0% 0.0% Growth Index Value Specialty GARP Income 12/31/2010 3/31/2011 6/30/2011 9/30/2011 NOTE: The style breakdown of MRO reflects a detailed shareholder breakout of MRO s institutional style all the way down to the mutual fund level. Mutual fund positions are cut off at 100,000 shares and the remaining institutional position is assigned the firm s designated general style. Smaller institutional positions are cut off at 100,000 shares as well. -Value investors include Deep Value and Core Value -Income investors include Yield and Income Value -Growth Investors include Growth, Core Growth and Aggressive Growth -Specialty is comprised of VC/Private Equity, Broker-Dealer, Sector Specific and Hedge Fund 17

Investor Styles of E&P Peers Most recent filings February 16, 2012 100 90 80 70 60 % 50 40 30 20 10 0 18.3 20.7 23.7 25.5 29.7 29.8 2.9 39.8 41.8 3.9 46.7 2.6 0.9 20.1 3.4 3.7 20.7 18.7 23.9 3.2 1 22.2 19.7 5.7 4.1 9.9 4.1 9.3 2.1 5.7 4.7 7.8 2.2 1.4 1.4 3 2.5 7.5 7.6 4.7 4.6 3.3 1.3 25.2 16.2 2.1 2.5 25.6 29.2 26.4 13.8 14.7 25.1 22 28.9 24.6 20 19.2 21.2 23.3 12.1 15.1 15.8 A B MRO C D E F G H Value Speciality/Other Index Income/Yield Hedge Fund Growth GARP Source: Morgan Stanley 18

MRO Investor Styles 100 90 80 70 60 % 50 40 30 20 10 0 23.7 22.7 20.7 23.7 28.8 2.6 3.1 3.6 3.5 2.6 23.9 23.3 22.2 22.3 22 6.2 7.8 7.4 5 8.8 4.7 5.5 6.6 6.5 1.4 25.1 25.1 25 25.1 23.2 12.1 12.9 13.5 13.8 14.3 Q4 2011 Q3 2011 Q2 2011 Q1 2011 Q4 2010 Value Speciality/Other Index Income/Yield Hedge Fund Growth GARP Source: Morgan Stanley 19

Marathon Oil A Strong New E&P Company Strong and stable base assets generate significant cash 2011 Net cash provided by continuing operations - ~$5.4 B 2011 Proved reserves - 1.8 BBOE, 75% liquids Profitable growth in reserves and production 5-7% CAGR 2010-2016 Low risk growth ~80% liquids and driven by US resource plays 2011 to 2012 Projected ~5% growth excluding Libya Impact exploration provides significant upside potential Focused on total shareholder return Top quartile execution Capital discipline 20

Strong Base Assets and Growth Portfolio Liquids Gas Base Assets Growth Assets * Production = Available for Sale 21

Growth Assets Significant Low Risk Production Growth >50% CAGR ~80% Liquids CAPEX $3.0B - $3.8B per year 22

Exploration Drilling The Gulf of Mexico has a portfolio of 20 prospects for drilling multiple opportunities Kurdistan has a portfolio of seven very large exploration prospects defined on four existing blocks Poland is a large frontier play with shale gas potential CAPEX ~$0.5B* per year GOM 4 Wells, 3 appraisals 2012 Drilling Program Poland 6 Wells Kurdistan 3 Wells, 2 appraisals * Does not include exploration/exploitation in base assets or growth assets, or development capital for exploration success 23

Marathon Oil Driving Shareholder Value Close Hilcorp Eagle Ford acreage transaction and begin ramp-up Strong 2011 reserve replacement Increased rig activity in U.S. resource plays Exploration drilling Resumed Gulf of Mexico Continued Kurdistan Initiated Poland Anticipate 2012 reserve replacement >150%, excl acquisitions & divestitures First production Angola Block 31 PSVM 2 nd half 2012 Full year AOSP base plus expansion - 2012 2012 Net production up 5% excluding Libya Focus and Execute to deliver consistent top quartile results 24

MRO Stock Performance Full Year 2011 40% 30% 20% 10% 0% -10% -20% -30% -40% -50% MRO NBL EOG APC OXY Peer Average CHK DVN APA MUR HES ECA TLM MRO adjusted for downstream spinoff 25

MRO Post Spin Stock Performance July 1, 2011 through April 9, 2012 10% 0% -10% -20% -30% -40% -50% NBL EOG APC MRO DVN OXY Peer Average MUR APA HES CHK TLM ECA 26