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	June 30, ~~2022~~2023


☐			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 1-1513

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 ~~677,583,502~~605,687,177 shares of Marathon Oil Corporation common stock outstanding as of July ~~29, 2022.~~31, 2023.

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 ~~2021~~2022 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. Basis of Presentation	7
	2. Accounting Standards	7
	3. Income and Dividends per Common Share	7

	4. Revenues	7
	5. Segment Information	9
	6. Income Taxes	13
	7. Credit Losses	13
	8. Inventories	14
	9. Property, Plant and Equipment	14

	10. Asset Retirement Obligations	14
	11. Leases	15
	12. Derivatives	16
	13. Fair Value Measurements	18
	14. Debt	19
	15. Stockholders' Equity	20
	16. Incentive Based Compensation	20
	17. Defined Benefit Postretirement Plans	21
	18. Reclassifications Out of Accumulated Other Comprehensive Income (Loss)	21
	19. Supplemental Cash Flow Information	22
	20. Equity Method Investments	22
	21. Commitments and Contingencies	23

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	2625
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4038
Item 4.	Controls and Procedures	4038


Part II - OTHER INFORMATION
Item 1.	Legal Proceedings	4139
Item 1A.	Risk Factors	4139
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4239
Item 5.	Other Information	40
Item 6.	Exhibits	4240
	Signatures	4341

Table of Contents

Part I – FINANCIAL INFORMATION

Item 1. Financial Statements

MARATHON OIL CORPORATION

Consolidated Statements of Income (Unaudited)


		Three Months Ended				Six Months Ended					Three Months Ended				Six Months Ended
		June 30,				June 30,					June 30,				June 30,
(In millions, except per share data)	(In millions, except per share data)	2022		2021		2022		2021		(In millions, except per share data)	2023		2022		2023		2022
Revenues and other income:	Revenues and other income:									Revenues and other income:
Revenues from contracts with customers	Revenues from contracts with customers	$	2,168	$	1,254	$	3,929	$	2,431	Revenues from contracts with customers	$	1,484	$	2,168	$	3,051	$	3,929
Net gain (loss) on commodity derivatives	Net gain (loss) on commodity derivatives	(27)		(166)		(170)		(319)		Net gain (loss) on commodity derivatives	3		(27)		18		(170)
Income from equity method investments	Income from equity method investments	152		49		279		93		Income from equity method investments	22		152		102		279
Net gain (loss) on disposal of assets	Net gain (loss) on disposal of assets	(1)		1		(1)		1		Net gain (loss) on disposal of assets	—		(1)		5		(1)
Other income	Other income	11		5		19		8		Other income	4		11		17		19
Total revenues and other income	Total revenues and other income	2,303		1,143		4,056		2,214		Total revenues and other income	1,513		2,303		3,193		4,056
Costs and expenses:	Costs and expenses:									Costs and expenses:
Production	Production	164		126		316		247		Production	214		164		415		316
Shipping, handling and other operating	Shipping, handling and other operating	191		167		376		319		Shipping, handling and other operating	161		191		323		376
Exploration	Exploration	8		25		19		46		Exploration	11		8		26		19
Depreciation, depletion and amortization	Depreciation, depletion and amortization	436		532		859		1,028		Depreciation, depletion and amortization	559		436		1,079		859
Impairments	Impairments	2		46		2		47		Impairments	—		2		—		2
Taxes other than income	Taxes other than income	140		74		244		148		Taxes other than income	43		140		138		244
General and administrative	General and administrative	68		68		141		157		General and administrative	71		68		153		141
Total costs and expenses	Total costs and expenses	1,009		1,038		1,957		1,992		Total costs and expenses	1,059		1,009		2,134		1,957
Income from operations	Income from operations	1,294		105		2,099		222		Income from operations	454		1,294		1,059		2,099
Net interest and other	Net interest and other	(54)		(59)		(76)		(72)		Net interest and other	(92)		(54)		(174)		(76)
Other net periodic benefit (costs) credits		5		(1)		9		2
Loss on early extinguishment of debt		—		(19)		—		(19)
Other net periodic benefit credits										Other net periodic benefit credits	3		5		6		9

Income before income taxes	Income before income taxes	1,245		26		2,032		133		Income before income taxes	365		1,245		891		2,032
Provision (benefit) for income taxes	Provision (benefit) for income taxes	279		10		(238)		20		Provision (benefit) for income taxes	78		279		187		(238)
Net income	Net income	$	966	$	16	$	2,270	$	113	Net income	$	287	$	966	$	704	$	2,270
Net income per share:	Net income per share:									Net income per share:
Basic	Basic	$	1.37	$	0.02	$	3.17	$	0.14	Basic	$	0.47	$	1.37	$	1.13	$	3.17
Diluted	Diluted	$	1.37	$	0.02	$	3.16	$	0.14	Diluted	$	0.47	$	1.37	$	1.13	$	3.16
Weighted average common shares outstanding:	Weighted average common shares outstanding:									Weighted average common shares outstanding:
Basic	Basic	703		789		717		790		Basic	614		703		622		717
Diluted	Diluted	705		789		719		791		Diluted	615		705		623		719

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

Table of Contents

MARATHON OIL CORPORATION

Consolidated Statements of Comprehensive Income (Unaudited)


		Three Months Ended				Six Months Ended					Three Months Ended				Six Months Ended
		June 30,				June 30,					June 30,				June 30,
(In millions)	(In millions)	2022		2021		2022		2021		(In millions)	2023		2022		2023		2022
Net income	Net income	$	966	$	16	$	2,270	$	113	Net income	$	287	$	966	$	704	$	2,270
Other comprehensive income (loss), net of tax	Other comprehensive income (loss), net of tax									Other comprehensive income (loss), net of tax

Change in actuarial gain (loss) and other for postretirement and postemployment plans	Change in actuarial gain (loss) and other for postretirement and postemployment plans	1		16		(3)		13		Change in actuarial gain (loss) and other for postretirement and postemployment plans	(8)		1		(13)		(3)

Change in derivative hedges unrecognized gain (loss)		4		(21)		16		19
Reclassification of de-designated forward interest rate swaps		—		(30)		—		(28)
Change in derivative hedges unrecognized gain										Change in derivative hedges unrecognized gain	3		4		1		16

Other	Other	(1)		—		(1)		—		Other	—		(1)		—		(1)
Other comprehensive income (loss)	Other comprehensive income (loss)	4		(35)		12		4		Other comprehensive income (loss)	(5)		4		(12)		12
Comprehensive income (loss)		$	970	$	(19)	$	2,282	$	117
Comprehensive income										Comprehensive income	$	282	$	970	$	692	$	2,282

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

Table of Contents

MARATHON OIL CORPORATION

Consolidated Balance Sheets (Unaudited)


		June 30,		December 31,			June 30,		December 31,
(In millions, except par value and share amounts)	(In millions, except par value and share amounts)	2022		2021		(In millions, except par value and share amounts)	2023		2022
Assets	Assets					Assets
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	1,162	$	580	Cash and cash equivalents	$	215	$	334
Receivables, net	Receivables, net	1,512		1,142		Receivables, net	1,294		1,146
Inventories	Inventories	93		77		Inventories	136		125
Other current assets	Other current assets	41		22		Other current assets	58		66
Total current assets	Total current assets	2,808		1,821		Total current assets	1,703		1,671
Equity method investments	Equity method investments	528		450		Equity method investments	430		577
Property, plant and equipment, net of accumulated depreciation, depletion and amortization of $23,116 and $22,412		14,357		14,499
Property, plant and equipment, net of accumulated depreciation, depletion and amortization of $24,888 and $23,876						Property, plant and equipment, net of accumulated depreciation, depletion and amortization of $24,888 and $23,876	17,524		17,377

Deferred tax assets		325		—

Other noncurrent assets	Other noncurrent assets	268		224		Other noncurrent assets	262		315
Total assets	Total assets	$	18,286	$	16,994	Total assets	$	19,919	$	19,940
Liabilities	Liabilities					Liabilities
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	1,523	$	1,110	Accounts payable	$	1,537	$	1,279
Payroll and benefits payable	Payroll and benefits payable	50		74		Payroll and benefits payable	50		90
Accrued taxes	Accrued taxes	143		157		Accrued taxes	102		171
Other current liabilities	Other current liabilities	388		260		Other current liabilities	305		364
Long-term debt due within one year	Long-term debt due within one year	273		36		Long-term debt due within one year	131		402
Total current liabilities	Total current liabilities	2,377		1,637		Total current liabilities	2,125		2,306
Long-term debt	Long-term debt	3,709		3,978		Long-term debt	5,724		5,521
Deferred tax liabilities	Deferred tax liabilities	146		136		Deferred tax liabilities	278		167
Defined benefit postretirement plan obligations	Defined benefit postretirement plan obligations	124		137		Defined benefit postretirement plan obligations	105		100
Asset retirement obligations	Asset retirement obligations	278		288		Asset retirement obligations	299		295
Deferred credits and other liabilities	Deferred credits and other liabilities	120		132		Deferred credits and other liabilities	144		154
Total liabilities	Total liabilities	6,754		6,308		Total liabilities	8,675		8,543
Commitments and contingencies		0		0
Commitments and contingencies (Note 21)						Commitments and contingencies (Note 21)
Stockholders’ Equity	Stockholders’ Equity					Stockholders’ Equity
Preferred stock – no shares issued or outstanding (no par value, 26 million shares authorized)	Preferred stock – no shares issued or outstanding (no par value, 26 million shares authorized)	—		—		Preferred stock – no shares issued or outstanding (no par value, 26 million shares authorized)	—		—
Common stock:	Common stock:					Common stock:
Issued – 937 million shares (par value $1 per share, 1.925 billion shares authorized at June 30, 2022 and December 31, 2021)		937		937
Held in treasury, at cost – 248 million shares and 194 million shares		(6,118)		(4,825)
Issued – 937 million shares (par value $1 per share, 1.925 billion shares authorized at June 30, 2023 and December 31, 2022)						Issued – 937 million shares (par value $1 per share, 1.925 billion shares authorized at June 30, 2023 and December 31, 2022)	937		937
Held in treasury, at cost – 331 million shares and 304 million shares						Held in treasury, at cost – 331 million shares and 304 million shares	(8,188)		(7,512)
Additional paid-in capital	Additional paid-in capital	7,186		7,221		Additional paid-in capital	7,159		7,203
Retained earnings	Retained earnings	9,433		7,271		Retained earnings	11,242		10,663
Accumulated other comprehensive income	Accumulated other comprehensive income	94		82		Accumulated other comprehensive income	94		106
Total stockholders’ equity	Total stockholders’ equity	11,532		10,686		Total stockholders’ equity	11,244		11,397
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	18,286	$	16,994	Total liabilities and stockholders’ equity	$	19,919	$	19,940

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

Table of Contents

MARATHON OIL CORPORATION

Consolidated Statements of Cash Flows (Unaudited)


		Six Months Ended					Six Months Ended
		June 30,					June 30,
(In millions)	(In millions)	2022		2021		(In millions)	2023		2022
Increase (decrease) in cash and cash equivalents	Increase (decrease) in cash and cash equivalents					Increase (decrease) in cash and cash equivalents
Operating activities:	Operating activities:					Operating activities:
Net income	Net income	$	2,270	$	113	Net income	$	704	$	2,270
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization	Depreciation, depletion and amortization	859		1,028		Depreciation, depletion and amortization	1,079		859
Impairments	Impairments	2		47		Impairments	—		2
Exploratory dry well costs and unproved property impairments	Exploratory dry well costs and unproved property impairments	14		39		Exploratory dry well costs and unproved property impairments	24		14
Net (gain) loss on disposal of assets	Net (gain) loss on disposal of assets	1		(1)		Net (gain) loss on disposal of assets	(5)		1
Loss on early extinguishment of debt		—		19

Deferred income taxes	Deferred income taxes	(319)		(7)		Deferred income taxes	155		(319)
Unrealized loss on derivative instruments, net	Unrealized loss on derivative instruments, net	71		157		Unrealized loss on derivative instruments, net	2		71

Pension and other post retirement benefits, net	Pension and other post retirement benefits, net	(16)		(14)		Pension and other post retirement benefits, net	(11)		(16)
Stock-based compensation	Stock-based compensation	18		17		Stock-based compensation	21		18
Equity method investments, net	Equity method investments, net	(85)		(17)		Equity method investments, net	113		(85)
Changes in:	Changes in:					Changes in:
Current receivables	Current receivables	(376)		(253)		Current receivables	(158)		(376)
Inventories	Inventories	(16)		(2)		Inventories	(11)		(16)
Current accounts payable and accrued liabilities	Current accounts payable and accrued liabilities	278		121		Current accounts payable and accrued liabilities	37		278
Other current assets and liabilities	Other current assets and liabilities	(7)		73		Other current assets and liabilities	10		(7)
All other operating, net	All other operating, net	51		(43)		All other operating, net	(19)		51
Net cash provided by operating activities	Net cash provided by operating activities	2,745		1,277		Net cash provided by operating activities	1,941		2,745
Investing activities:	Investing activities:					Investing activities:
Additions to property, plant and equipment	Additions to property, plant and equipment	(687)		(483)		Additions to property, plant and equipment	(1,166)		(687)

Acquisitions, net of cash acquired	Acquisitions, net of cash acquired	2		—		Acquisitions, net of cash acquired	9		2
Disposal of assets, net of cash transferred to the buyer	Disposal of assets, net of cash transferred to the buyer	4		15		Disposal of assets, net of cash transferred to the buyer	(1)		4
Equity method investments - return of capital	Equity method investments - return of capital	7		6		Equity method investments - return of capital	34		7
All other investing, net	All other investing, net	—		(1)		All other investing, net	(1)		—
Net cash used in investing activities	Net cash used in investing activities	(674)		(463)		Net cash used in investing activities	(1,125)		(674)
Financing activities:	Financing activities:					Financing activities:
Proceeds from revolving credit facility						Proceeds from revolving credit facility	980		—
Repayments of revolving credit facility						Repayments of revolving credit facility	(980)		—
Borrowings						Borrowings	200		—
Debt repayments						Debt repayments	(270)		(32)

Debt repayment		(32)		(500)
Debt extinguishment costs		—		(19)
Shares repurchased under buyback programs	Shares repurchased under buyback programs	(1,352)		—		Shares repurchased under buyback programs	(706)		(1,352)
Dividends paid	Dividends paid	(108)		(55)		Dividends paid	(125)		(108)
Purchases of shares for tax withholding obligations	Purchases of shares for tax withholding obligations	(21)		(9)		Purchases of shares for tax withholding obligations	(30)		(21)
All other financing, net	All other financing, net	24		(3)		All other financing, net	(4)		24
Net cash used in financing activities	Net cash used in financing activities	(1,489)		(586)		Net cash used in financing activities	(935)		(1,489)

Net increase in cash and cash equivalents		582		228
Net increase (decrease) in cash and cash equivalents						Net increase (decrease) in cash and cash equivalents	(119)		582
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	580		742		Cash and cash equivalents at beginning of period	334		580
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	1,162	$	970	Cash and cash equivalents at end of period	$	215	$	1,162

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

Table of Contents

MARATHON OIL CORPORATION

Consolidated Statements of Stockholders’ Equity (Unaudited)


		Total Equity of Marathon Oil Stockholders															Total Equity of Marathon Oil Stockholders
(In millions)	(In millions)	Preferred Stock		Common Stock		Treasury Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Equity		(In millions)	Preferred Stock		Common Stock		Treasury Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income		Total Equity
Six Months Ended June 30, 2021
December 31, 2020 Balance		$	—	$	937	$	(4,089)	$	7,174	$	6,466	$	73	$	10,561
Shares repurchased under buyback programs		—		—		—		—		—		—		—
Stock-based compensation		—		—		(24)		21		—		—		(3)
Net income (loss)		—		—		—		—		97		—		97
Other comprehensive income (loss)		—		—		—		—		—		39		39
Dividends paid (per share amount of $0.03)		—		—		—		—		(23)		—		(23)
March 31, 2021 Balance		$	—	$	937	$	(4,113)	$	7,195	$	6,540	$	112	$	10,671
Shares repurchased under buyback programs		—		—		—		—		—		—		—
Stock-based compensation		—		—		8		6		—		—		14
Net income (loss)		—		—		—		—		16		—		16
Other comprehensive income (loss)		—		—		—		—		—		(35)		(35)
Dividends paid (per share amount of $0.04)		—		—		—		—		(32)		—		(32)
June 30, 2021 Balance		$	—	$	937	$	(4,105)	$	7,201	$	6,524	$	77	$	10,634

Six Months Ended June 30, 2022	Six Months Ended June 30, 2022															Six Months Ended June 30, 2022
December 31, 2021 Balance	December 31, 2021 Balance	$	—	$	937	$	(4,825)	$	7,221	$	7,271	$	82	$	10,686	December 31, 2021 Balance	$	—	$	937	$	(4,825)	$	7,221	$	7,271	$	82	$	10,686
Shares repurchased under buyback programs	Shares repurchased under buyback programs	—		—		(592)		—		—		—		(592)		Shares repurchased under buyback programs	—		—		(592)		—		—		—		(592)
Stock-based compensation	Stock-based compensation	—		—		55		(43)		—		—		12		Stock-based compensation	—		—		55		(43)		—		—		12
Net income (loss)		—		—		—		—		1,304		—		1,304
Other comprehensive income (loss)		—		—		—		—		—		8		8
Net income																Net income	—		—		—		—		1,304		—		1,304
Other comprehensive income																Other comprehensive income	—		—		—		—		—		8		8
Dividends paid (per share amount of $0.07)	Dividends paid (per share amount of $0.07)	—		—		—		—		(52)		—		(52)		Dividends paid (per share amount of $0.07)	—		—		—		—		(52)		—		(52)
March 31, 2022 Balance	March 31, 2022 Balance	$	—	$	937	$	(5,362)	$	7,178	$	8,523	$	90	$	11,366	March 31, 2022 Balance	$	—	$	937	$	(5,362)	$	7,178	$	8,523	$	90	$	11,366
Shares repurchased under buyback programs	Shares repurchased under buyback programs	—		—		(760)		—		—		—		(760)		Shares repurchased under buyback programs	—		—		(760)		—		—		—		(760)
Stock-based compensation	Stock-based compensation	—		—		4		8		—		—		12		Stock-based compensation	—		—		4		8		—		—		12
Net income	Net income	—		—		—		—		966		—		966		Net income	—		—		—		—		966		—		966
Other comprehensive income	Other comprehensive income	—		—		—		—		—		4		4		Other comprehensive income	—		—		—		—		—		4		4
Dividends paid (per share amount of $0.08)	Dividends paid (per share amount of $0.08)	—		—		—		—		(56)		—		(56)		Dividends paid (per share amount of $0.08)	—		—		—		—		(56)		—		(56)
June 30, 2022 Balance	June 30, 2022 Balance	$	—	$	937	$	(6,118)	$	7,186	$	9,433	$	94	$	11,532	June 30, 2022 Balance	$	—	$	937	$	(6,118)	$	7,186	$	9,433	$	94	$	11,532

Six Months Ended June 30, 2023																Six Months Ended June 30, 2023
December 31, 2022 Balance																December 31, 2022 Balance	$	—	$	937	$	(7,512)	$	7,203	$	10,663	$	106	$	11,397
Shares repurchased under buyback programs																Shares repurchased under buyback programs	—		—		(334)		—		—		—		(334)
Excise tax on shares repurchased																Excise tax on shares repurchased	—		—		(3)		—		—		—		(3)
Stock-based compensation																Stock-based compensation	—		—		35		(54)		—		—		(19)
Net income																Net income	—		—		—		—		417		—		417
Other comprehensive loss																Other comprehensive loss	—		—		—		—		—		(7)		(7)
Dividends paid (per share amount of $0.10)																Dividends paid (per share amount of $0.10)	—		—		—		—		(63)		—		(63)
March 31, 2023 Balance																March 31, 2023 Balance	$	—	$	937	$	(7,814)	$	7,149	$	11,017	$	99	$	11,388
Shares repurchased under buyback programs																Shares repurchased under buyback programs	—		—		(372)		—		—		—		(372)
Excise tax on shares repurchased																Excise tax on shares repurchased	—		—		(3)		—		—		—		(3)
Stock-based compensation																Stock-based compensation	—		—		1		10		—		—		11
Net income																Net income	—		—		—		—		287		—		287
Other comprehensive loss																Other comprehensive loss	—		—		—		—		—		(5)		(5)
Dividends paid (per share amount of $0.10)																Dividends paid (per share amount of $0.10)	—		—		—		—		(62)		—		(62)
June 30, 2023 Balance																June 30, 2023 Balance	$	—	$	937	$	(8,188)	$	7,159	$	11,242	$	94	$	11,244

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. 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 ~~2021~~2022 Annual Report on Form 10-K. The results of operations for the second quarter and first six months of ~~2022~~2023 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 in the second quarter ~~or first six months~~ of ~~2022~~2023 that had a material impact on our consolidated financial statements.

Accounting Standards Updates Not Yet Adopted

There were no 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 in all periods, provided the effect is not antidilutive. The per share calculations below exclude 1 million of antidilutive stock options for the three and six months ended June 30, 2023 and 2 million of antidilutive stock options for the three and six months ended June 30, 2022, ~~and 4 million and 5 million of stock options for the three and six months ended June 30, 2021, respectively, that were antidilutive.~~respectively.


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended June 30,				Six Months Ended June 30,
(In millions, except per share data)	(In millions, except per share data)	2022		2021		2022		2021		(In millions, except per share data)	2023		2022		2023		2022
Net income	Net income	$	966	$	16	$	2,270	$	113	Net income	$	287	$	966	$	704	$	2,270

Weighted average common shares outstanding	Weighted average common shares outstanding	703		789		717		790		Weighted average common shares outstanding	614		703		622		717
Effect of dilutive securities	Effect of dilutive securities	2		—		2		1		Effect of dilutive securities	1		2		1		2
Weighted average common shares, diluted	Weighted average common shares, diluted	705		789		719		791		Weighted average common shares, diluted	615		705		623		719
Net income per share:	Net income per share:									Net income per share:
Basic	Basic	$	1.37	$	0.02	$	3.17	$	0.14	Basic	$	0.47	$	1.37	$	1.13	$	3.17
Diluted	Diluted	$	1.37	$	0.02	$	3.16	$	0.14	Diluted	$	0.47	$	1.37	$	1.13	$	3.16

Dividends per share	Dividends per share	$	0.08	$	0.04	$	0.15	$	0.07	Dividends per share	$	0.10	$	0.08	$	0.20	$	0.15

4. Revenues

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

As of June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, receivables from contracts with customers, included in receivables, ~~net~~less reserves for credit losses, were ~~$1.3 billion~~$892 million and ~~$961~~$875 million, respectively.

~~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 six months ended June 30:

Table of Contents

~~United States~~

Three Months Ended June 30, 2022
(In millions) Eagle Ford Bakken Oklahoma Northern Delaware Other U.S. Total
Crude oil and condensate $ 544 $ 749 $ 138 $ 100 $ 42 $ 1,573
Natural gas liquids 55 92 69 15 8 239
Natural gas 56 46 95 21 10 228
Other 1 — — — 48 49
Revenues from contracts with customers $ 656 $ 887 $ 302 $ 136 $ 108 $ 2,089

Three Months Ended June 30, 2021
(In millions) Eagle Ford Bakken Oklahoma Northern Delaware Other U.S. Total
Crude oil and condensate $ 353 $ 411 $ 71 $ 77 $ 24 $ 936
Natural gas liquids 33 48 37 11 2 131
Natural gas 29 17 41 5 (1) 91
Other 2 — — — 29 31
Revenues from contracts with customers $ 417 $ 476 $ 149 $ 93 $ 54 $ 1,189

Six Months Ended June 30, 2022
(In millions) Eagle Ford Bakken Oklahoma Northern Delaware Other U.S. Total
Crude oil and condensate $ 1,003 $ 1,401 $ 237 $ 188 $ 85 $ 2,914
Natural gas liquids 99 181 128 30 17 455
Natural gas 89 89 151 33 17 379
Other 3 — — — 52 55
Revenues from contracts with customers $ 1,194 $ 1,671 $ 516 $ 251 $ 171 $ 3,803

Six Months Ended June 30, 2021
(In millions) Eagle Ford Bakken Oklahoma Northern Delaware Other U.S. Total
Crude oil and condensate $ 612 $ 783 $ 132 $ 154 $ 46 $ 1,727
Natural gas liquids 59 89 74 20 5 247
Natural gas 76 42 150 30 8 306
Other 4 — — — 37 41
Revenues from contracts with customers $ 751 $ 914 $ 356 $ 204 $ 96 $ 2,321

~~International (E.G.)~~

Three Months Ended June 30, Six Months Ended June 30,
(In millions) 2022 2021 2022 2021
Crude oil and condensate $ 71 $ 58 $ 111 $ 95
Natural gas liquids — 1 1 2
Natural gas 7 5 12 12
Other 1 1 2 1
Revenues from contracts with customers $ 79 $ 65 $ 126 $ 110

MARATHON OIL CORPORATION

Notes to Consolidated Financial Statements (Unaudited)

United States


	Three Months Ended June 30, 2023
(In millions)	Eagle Ford		Bakken		Oklahoma		Permian		Other U.S.		Total
Crude oil and condensate	$	524	$	456	$	63	$	141	$	11	$	1,195
Natural gas liquids	64		41		33		18		—		156
Natural gas	37		14		28		7		—		86
Other	1		—		—		—		2		3
Revenues from contracts with customers	$	626	$	511	$	124	$	166	$	13	$	1,440


	Three Months Ended June 30, 2022
(In millions)	Eagle Ford		Bakken		Oklahoma		Permian		Other U.S.		Total
Crude oil and condensate	$	544	$	749	$	138	$	100	$	42	$	1,573
Natural gas liquids	55		92		69		15		8		239
Natural gas	56		46		95		21		10		228
Other	1		—		—		—		48		49
Revenues from contracts with customers	$	656	$	887	$	302	$	136	$	108	$	2,089


	Six Months Ended June 30, 2023
(In millions)	Eagle Ford		Bakken		Oklahoma		Permian		Other U.S.		Total
Crude oil and condensate	$	1,019	$	887	$	141	$	311	$	22	$	2,380
Natural gas liquids	135		78		72		40		—		325
Natural gas	93		49		64		18		1		225
Other	3		—		—		—		10		13
Revenues from contracts with customers	$	1,250	$	1,014	$	277	$	369	$	33	$	2,943


	Six Months Ended June 30, 2022
(In millions)	Eagle Ford		Bakken		Oklahoma		Permian		Other U.S.		Total
Crude oil and condensate	$	1,003	$	1,401	$	237	$	188	$	85	$	2,914
Natural gas liquids	99		181		128		30		17		455
Natural gas	89		89		151		33		17		379
Other	3		—		—		—		52		55
Revenues from contracts with customers	$	1,194	$	1,671	$	516	$	251	$	171	$	3,803

International (E.G.)


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2023		2022		2023		2022
Crude oil and condensate	$	39	$	71	$	96	$	111
Natural gas liquids	—		—		1		1
Natural gas	4		7		9		12
Other	1		1		2		2
Revenues from contracts with customers	$	44	$	79	$	108	$	126

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MARATHON OIL CORPORATION

Notes to Consolidated Financial Statements (Unaudited)

5. Segment Information

We have 2two 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~~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, ~~goodwill and equity method investments,~~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.


	Three Months Ended June 30, 2023
(In millions)	U.S.			Int’l		Not Allocated to Segments			Total
Revenues from contracts with customers	$	1,440		$	44	$	—		$	1,484
Net gain (loss) on commodity derivatives	7			—		(4)		(c)	3
Income from equity method investments	—			22		—			22

Other income	1			3		—			4
Less costs and expenses:
Production	191			23		—			214
Shipping, handling and other operating	161			—		—			161
Exploration	6			—		5			11
Depreciation, depletion and amortization	547			10		2			559

Taxes other than income	43		(b)	—		—			43
General and administrative	31			3		37			71
Net interest and other	—			—		92			92
Other net periodic benefit costs	—			—		(3)			(3)

Income tax provision (benefit)	104			3		(29)			78
Segment income (loss)	$	365		$	30	$	(108)		$	287
Total assets	$	18,761		$	1,006	$	152		$	19,919
Capital expenditures(a)	$	620		$	—	$	3		$	623

(a)Includes accruals and excludes acquisitions.

(b)Includes a nonrecurring Eagle Ford severance tax refund of $47 million related to prior years.

(c)Unrealized loss on commodity derivative instruments (See Note 12).

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MARATHON OIL CORPORATION

Notes to Consolidated Financial Statements (Unaudited)


	Three Months Ended June 30, 2022
(In millions)	U.S.		Int’l		Not Allocated to Segments			Total
Revenues from contracts with customers	$	2,089	$	79	$	—		$	2,168
Net gain (loss) on commodity derivatives	(70)		—		43		(b)	(27)
Income from equity method investments	—		152		—			152
Net loss on disposal of assets	—		—		(1)			(1)
Other income	2		2		7			11
Less costs and expenses:
Production	150		14		—			164
Shipping, handling and other operating	187		1		3			191
Exploration	8		—		—			8
Depreciation, depletion and amortization	415		16		5			436
Impairments	—		—		2			2
Taxes other than income	139		—		1			140
General and administrative	27		3		38			68
Net interest and other	—		—		54			54
Other net periodic benefit costs	—		—		(5)			(5)

Income tax provision (benefit)	249		39		(9)			279
Segment income (loss)	$	846	$	160	$	(40)		$	966
Total assets	$	15,757	$	1,059	$	1,470		$	18,286
Capital expenditures(a)	$	372	$	1	$	2		$	375

(a)Includes accruals.

(b)Unrealized gain on commodity derivative instruments (See Note 1312).

~~MARATHON OIL CORPORATION~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

Three Months Ended June 30, 2021
(In millions) U.S. Int’l Not Allocated to Segments Total
Revenues from contracts with customers $ 1,189 $ 65 $ — $ 1,254
Net gain (loss) on commodity derivatives (91) — (75) (b) (166)
Income (loss) from equity method investments — 49 — 49
Net gain on disposal of assets — — 1 1
Other income 3 2 — 5
Less costs and expenses:
Production 113 13 — 126
Shipping, handling and other operating 153 2 12 167
Exploration 18 — 7 25
Depreciation, depletion and amortization 506 18 8 532
Impairments — — 46 (c) 46
Taxes other than income 76 — (2) 74
General and administrative 27 4 37

68
Net interest and other — — 59 (d) 59
Other net periodic benefit costs — — 1 1
Loss on early extinguishment of debt — — 19 (e) 19
Income tax provision (benefit) 1 11 (2) 10
Segment income (loss) $ 207 $ 68 $ (259) $ 16
Total assets $ 15,747 $ 1,047 $ 1,006 $ 17,800
Capital expenditures(a)
$ 284 $ 2 $ 3 $ 289

~~(a)Includes accruals.~~

~~(b)Unrealized loss on commodity derivative instruments (See~~ ~~Note 13~~).

~~(c)Includes impairments of $24 million associated with central facilities in Eagle Ford (See~~ ~~Note 10) and $22 million associated with decommissioning costs for non-producing long-lived assets in the Gulf of Mexico (‘GOM’) (See~~ ~~Note 10~~, ~~Note 11~~ ~~and~~ ~~Note 22~~).

~~(d)Includes a $22 million loss on 2022 interest rate swaps and a $31 million gain on 2025 interest rate swaps, neither of which were designated as cash flow hedges as of June 30, 2021 (See~~ ~~Note 13~~).

~~(e)Represents costs related to a make-whole provision premium and the write off of unamortized discount and issuance costs related to the redemption of the 2022 Notes in April 2021.~~

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MARATHON OIL CORPORATION

Notes to Consolidated Financial Statements (Unaudited)

Six Months Ended June 30, 2022
(In millions) U.S. Int’l Not Allocated to Segments Total
Revenues from contracts with customers $ 3,803 $ 126 $ — $ 3,929
Net loss on commodity derivatives (99) — (71) (b) (170)
Income from equity method investments — 279 — 279
Net loss on disposal of assets — — (1) (1)
Other income 6 4 9 19
Less costs and expenses:
Production 291 25 — 316
Shipping, handling and other operating 337 10 29 376
Exploration 19 — —

19
Depreciation, depletion and amortization 819 31 9 859
Impairments — — 2

2
Taxes other than income 238 — 6 244
General and administrative 57 6 78

141
Net interest and other — — 76 (c) 76
Other net periodic benefit credit — — (9) (9)
Income tax provision (benefit) 442 62 (742) (d) (238)
Segment income $ 1,507 $ 275 $ 488 $ 2,270
Total assets $ 15,757 $ 1,059 $ 1,470 $ 18,286
Capital expenditures(a)
$ 718 $ — $ 5 $ 723


	Six Months Ended June 30, 2023
(In millions)	U.S.			Int’l		Not Allocated to Segments			Total
Revenues from contracts with customers	$	2,943		$	108	$	—		$	3,051
Net gain (loss) on commodity derivatives	20			—		(2)		(c)	18
Income from equity method investments	—			102		—			102
Net gain on disposal of assets	—			—		5			5
Other income	12			4		1			17
Less costs and expenses:
Production	369			46		—			415
Shipping, handling and other operating	320			3		—			323
Exploration	11			—		15		(d)	26
Depreciation, depletion and amortization	1,052			22		5			1,079

Taxes other than income	140		(b)	—		(2)			138
General and administrative	66			6		81			153
Net interest and other	—			—		174			174
Other net periodic benefit costs	—			—		(6)			(6)

Income tax provision (benefit)	227			18		(58)			187
Segment income (loss)	$	790		$	119	$	(205)		$	704
Total assets	$	18,761		$	1,006	$	152		$	19,919
Capital expenditures(a)	$	1,217		$	2	$	5		$	1,224

(a)Includes accruals.

(b)Includes a nonrecurring Eagle Ford severance tax refund of $47 million related to prior years.

(c)Unrealized loss on commodity derivative instruments (SeeNote 12).

(d)Includes $10 million of dry well expense associated with wells in Permian (See Note 9).

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MARATHON OIL CORPORATION

Notes to Consolidated Financial Statements (Unaudited)


	Six Months Ended June 30, 2022
(In millions)	U.S.		Int’l		Not Allocated to Segments			Total
Revenue from contracts with customers	$	3,803	$	126	$	—		$	3,929
Net loss on commodity derivatives	(99)		—		(71)		(b)	(170)
Income from equity method investments	—		279		—			279
Net loss on disposal of assets	—		—		(1)			(1)
Other income	6		4		9			19
Less costs and expenses:
Production	291		25		—			316
Shipping, handling and other operating	337		10		29			376
Exploration	19		—		—			19
Depreciation, depletion and amortization	819		31		9			859
Impairments	—		—		2			2
Taxes other than income	238		—		6			244
General and administrative	57		6		78			141
Net interest and other	—		—		76		(c)	76
Other net periodic benefit credit	—		—		(9)			(9)

Income tax provision (benefit)	442		62		(742)		(d)	(238)
Segment income	$	1,507	$	275	$	488		$	2,270
Total assets	$	15,757	$	1,059	$	1,470		$	18,286
Capital expenditures(a)	$	718	$	—	$	5		$	723

(a)Includes accruals.

(b)Unrealized loss on commodity derivative instruments (See Note 1412).

(c)Includes a $17 million gain on 2025 interest rate swaps (See Note 1312).

(d)Includes a $685 million benefit related to the partial release of our valuation allowance (See Note 6).

~~MARATHON OIL CORPORATION~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

Six Months Ended June 30, 2021
(In millions) U.S. Int’l Not Allocated to Segments Total
Revenue from contracts with customers $ 2,321 $ 110 $ — $ 2,431
Net gain on commodity derivatives (162) — (157) (b) (319)
Loss from equity method investments — 93 —

93
Net gain on disposal of assets — — 1 1
Other income 4 3 1 8
Less costs and expenses:
Production 224 23 — 247
Shipping, handling and other operating 297 6 16 319
Exploration 39 — 7 46
Depreciation, depletion and amortization 978 37 13 1,028
Impairments — — 47 (c) 47
Taxes other than income 150 — (2) 148
General and administrative 50 6 101 (d) 157
Net interest and other — — 72 (e) 72
Other net periodic benefit credit — — (2)

(2)
Loss on early extinguishment of debt — — 19 (f) 19
Income tax provision (benefit) 6 16 (2) 20
Segment income (loss) $ 419 $ 118 $ (424) $ 113
Total assets $ 15,747 $ 1,047 $ 1,006 $ 17,800
Capital expenditures(a)
$ 467 $ 2 $ 4 $ 473

~~(a)Includes accruals.~~

~~(b)Unrealized loss on commodity derivative instruments (SeeNote 14~~).

~~(c)Includes second quarter 2021 impairments of $24 million associated with central facilities in Eagle Ford (See~~ ~~Note 10) and $22 million associated with decommissioning costs for non-producing long-lived assets in GOM (See~~ ~~Note 10~~, ~~Note 11~~ ~~and~~ ~~Note 22~~).

~~(d)Includes $13 million associated with the termination of an aircraft lease agreement and $12 million arising from severance expenses associated with a workforce reduction.~~

~~(e)Includes a $19 million gain on 2022 interest rate swaps and a $31 million gain on 2025 interest rate swaps, neither of which were designated as cash flow hedges as of June 30, 2021 (See~~ ~~Note 13~~).

~~(f)Represents costs related to a make-whole provision premium and the write off of unamortized discount and issuance costs related to the redemption of the 2022 Notes in April 2021.~~

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MARATHON OIL CORPORATION

Notes to Consolidated Financial Statements (Unaudited)

6. Income Taxes

Effective Tax Rate

The effective income tax rate is influenced by a variety of factors including the geographic and functional sources of income and the relative magnitude of these sources of income. The difference between the total provision and the sum of the amounts allocated to segments is reported in the “Not Allocated to Segments” column of the tables in Note 5.

For the three and six months ended June 30, ~~2022~~2023 and ~~2021,~~2022, our effective income tax rates were as follows:

Three Months Ended June 30, Six Months Ended June 30,
2022 2021 2022 2021
Effective income tax rate 22 % 38 % (12) % 15 %


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Effective income tax rate	21	%	22	%	21	%	(12)	%

•2022 — Our effective income tax rate was different from our U.S. statutory tax rate of 21% for the six months ended June 30, 2022, due to the first quarter 2022 release of the valuation allowance on certain U.S. and state deferred tax assets resulting in a non-cash deferred tax benefit of $685 million.

In August 2022, the President signed the Inflation Reduction Act of 2022 (“IRA”) into law. The IRA enacted various income tax provisions, including a 15% corporate book minimum tax. The corporate book minimum tax, which became effective on January 1, 2023, applies to corporations with an average annual adjusted financial statement income that exceeds $1 billion for the preceding three years. Under current law and guidance, we do not anticipate being subject to the corporate book minimum tax in 2023. The U.S. Treasury is expected to publish further guidance and regulations that will be relevant to scoping considerations and the calculation of minimum income tax liabilities. As this guidance is issued, we ~~previously disclosed in our 2021 Form 10-K, we maintained a full valuation allowance~~will continue to evaluate and assess the impact the IRA may have on our ~~net federal~~current and future period income taxes. We have made an accounting policy election to consider the effects of the corporate book minimum tax on the realizability of our deferred tax assets, carryforwards and ~~would continue to do so until there exists sufficient positive evidence to support a reversal of the allowance. In the first quarter,~~tax credits as a result of significant increases in commodity prices, corresponding increases in projections of our future taxable income, and the absence of objective negative evidence such as a cumulative loss in recent years, we determined we have sufficient positive evidence to release a majority of the federal valuation allowance. We retained a partial valuation allowance on certain U.S. deferred tax assets primarily as a result of volatility in commodity prices impacting assessed likelihood of future realizability.

•~~2021~~— Our effective income tax rate was different from our U.S. statutory tax rate of 21% for the three and six months ended June 30, 2021, as a result of the valuation allowance on net federal deferred tax assets in the U.S. which was in place at the time. In addition, the income mix of our U.S. and E.G. operations, including the income mix within E.G. between equity method investees and subsidiaries, contributed to the difference.period cost when they arise.

7. Credit Losses

The majority of our receivables are from purchasers of commodities or joint interest owners in properties we operate, both of which are recorded at estimated or invoiced amounts and do not bear interest. The majority of these receivables have payment terms of 30 days or less. At the end of each reporting period, we assess the collectability of our receivables and estimate the expected credit losses using historical data, current market conditions, reasonable and supportable forecasts of future economic conditions and other data as deemed appropriate.

Changes in the allowance for ~~doubtful accounts balance~~credit losses were as follows:


(In millions)	(In millions)	June 30, 2022		December 31, 2021		(In millions)	June 30, 2023		December 31, 2022
Beginning balance as of January 1	Beginning balance as of January 1	$	15	$	22	Beginning balance as of January 1	$	10	$	15

Current period provision	Current period provision	(2)		3		Current period provision	4		(3)
Current period write offs	Current period write offs	—		(5)		Current period write offs	(1)		(2)
Recoveries of amounts previously reserved	Recoveries of amounts previously reserved	—		(5)		Recoveries of amounts previously reserved	(1)		—
Ending balance	Ending balance	$	13	$	15	Ending balance	$	12	$	10

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MARATHON OIL CORPORATION

Notes to Consolidated Financial Statements (Unaudited)

8. Inventories

Crude oil and natural gas liquids are recorded at weighted average cost and carried at the lower of cost or net realizable value. Supplies and other items consist principally of tubular goods and equipment which are valued at weighted average cost and reviewed periodically for obsolescence or impairment when market conditions indicate.


(In millions)	(In millions)	June 30, 2022		December 31, 2021		(In millions)	June 30, 2023		December 31, 2022
Crude oil and natural gas		$	15	$	8
Crude oil and natural gas liquids						Crude oil and natural gas liquids	$	13	$	15
Supplies and other items	Supplies and other items	78		69		Supplies and other items	123		110
Inventories	Inventories	$	93	$	77	Inventories	$	136	$	125

~~MARATHON OIL CORPORATION~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

9. Property, Plant and Equipment


(In millions)	(In millions)	June 30, 2022		December 31, 2021		(In millions)	June 30, 2023		December 31, 2022
United States	United States	$	13,989	$	14,097	United States	$	17,201	$	17,034
International	International	315		347		International	269		288
Corporate	Corporate	53		55		Corporate	54		55
Net property, plant and equipment	Net property, plant and equipment	$	14,357	$	14,499	Net property, plant and equipment	$	17,524	$	17,377

As of June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, we had ~~$34~~$10 million and ~~$80~~$20 million,, respectively, of e~~xploratory~~exploratory well costs capitalized greater than one year related to suspended wells. Management believes these wells exhibit sufficient quantities of hydrocarbons to justify potential development. ~~The vast majority~~All of the suspended wells require completion activities ~~and installation of infrastructure~~ in order to classify the reserves as proved.

~~10. Impairments~~

The ~~following table summarizes impairment charges of proved properties and their corresponding fair values.~~

Three Months Ended June 30,
2022 2021
(In millions) Fair Value Impairment Fair Value Impairment
Long-lived assets held for use $ — $ — $ — $ 24
Asset retirement costs of long-lived assets $ — $ 2 $ — $ 22

Six Months Ended June 30,
2022 2021
(In millions) Fair Value Impairment Fair Value Impairment
Long-lived assets held for use $ — $ — $ — $ 25
Asset retirement costs of long-lived assets $ — $ 2 $ — $ 22

•~~2021~~— ~~During~~decrease during the ~~second quarter of 2021,~~six months ended June 30, 2023 included a reduction in suspended well costs as we recorded an impairment expense of $24 million associated with 2 central facilities located in Eagle Ford. Decommissioning activities commenced during the quarter, which included the re-routing of existing wells.

~~We also recognized an incremental $22~~$10 million of ~~impairment~~dry well expense associated with ~~an increase~~drilled and uncompleted exploratory wells in the estimated future decommissioning costs of certain non-producing wells, pipelines and production facilities for previously divested offshore assets located in the Gulf of Mexico. In a prior reporting period, we recorded a $7 million liability in our consolidated balance sheet associated with these assets, thereby increasing the total recognized asset retirement obligation to $29 million as of June 30, 2021. See ~~Note 11~~ ~~and~~ ~~Note 22~~ ~~for further information.~~

~~The combined effects of these items were recorded within the Impairments line item within our consolidated statements of income.~~

Permian.

~~MARATHON OIL CORPORATION~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

~~11.~~10. Asset Retirement Obligations

Asset retirement obligations primarily consist of estimated costs to remove, dismantle and restore land or seabed at the end of oil and gas production operations. Changes in asset retirement obligations were as follows:


		June 30,					June 30,
(In millions)	(In millions)	2022		2021		(In millions)	2023		2022
Beginning balance as of January 1	Beginning balance as of January 1	$	316	$	254	Beginning balance as of January 1	$	340	$	316
Incurred liabilities, including acquisitions	Incurred liabilities, including acquisitions	8		6		Incurred liabilities, including acquisitions	3		8
Settled liabilities, including dispositions	Settled liabilities, including dispositions	(3)		(2)		Settled liabilities, including dispositions	(20)		(3)
Accretion expense (included in depreciation, depletion and amortization)	Accretion expense (included in depreciation, depletion and amortization)	7		6		Accretion expense (included in depreciation, depletion and amortization)	7		7
Revisions of estimates	Revisions of estimates	(5)		32		Revisions of estimates	9		(5)

Ending balance as of June 30, total	Ending balance as of June 30, total	$	323	$	296	Ending balance as of June 30, total	$	339	$	323

Ending balance as of June 30, short-term	Ending balance as of June 30, short-term	$	46	$	24	Ending balance as of June 30, short-term	$	40	$	46

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•
~~2021~~— ~~In the second quarter of 2021, we had a revision of estimate of $29 million related~~

MARATHON OIL CORPORATION

Notes to anticipated costs for decommissioning certain wells, pipelines and production facilities for previously divested offshore non-producing long-lived assets located in the Gulf of Mexico. As of June 30, 2021, $14 million of this revision of estimate was classified as short-term. See Consolidated Financial Statements (Unaudited)

~~Note 22~~ ~~for further information. During the quarter, we recognized $22 million of impairment expense associated with these non-producing long-lived assets within our consolidated statements of income. See~~ ~~Note 10~~ ~~for further information.~~

~~12.~~11. Leases

Lessee

Balance sheet information related to right-of-use (“ROU”) assets and lease liabilities was as follows:

(In millions) Balance Sheet Location: June 30, 2022 December 31, 2021
ROU assets:
Operating leases Other noncurrent assets $ 119 $ 59
Finance leases Other noncurrent assets 26 28
Total ROU assets $ 145 $ 87
Lease liabilities:
Current liabilities
Operating leases Other current liabilities $ 78 $ 40
Finance leases Other current liabilities 6 6
Noncurrent liabilities
Operating leases Deferred credits and other liabilities 45 23
Finance leases Deferred credits and other liabilities 20 24
Total lease liabilities $ 149 $ 93

~~MARATHON OIL CORPORATION~~

~~Notes to Consolidated Financial Statements (Unaudited)~~


(In millions)	Balance Sheet Location:	June 30, 2023		December 31, 2022
ROU assets:
Operating leases	Other noncurrent assets	$	118	$	123
Finance leases	Other noncurrent assets	21		24
Total ROU assets		$	139	$	147
Lease liabilities:
Current liabilities
Operating leases	Other current liabilities	$	83	$	94
Finance leases	Other current liabilities	6		6
Noncurrent liabilities
Operating leases	Deferred credits and other liabilities	38		32
Finance leases	Deferred credits and other liabilities	15		18
Total lease liabilities		$	142	$	150

Operating Leases

We enter into various lease agreements to support our operations including drilling rigs, well fracturing equipment, compressors, buildings, vessels, vehicles and miscellaneous field equipment. We primarily act as a lessee in these transactions and the majority of our existing leases are classified as either short-term or long-term operating leases.

Finance Leases

In 2018, we signed an agreement with an owner/lessor to construct and lease a new build-to-suit office building in Houston, Texas. The initial lease term is five years and commenced in late September 2021 after the new Houston office was ready for occupancy. In March 2022, we made our first cash lease payment. ~~For~~During the six months ended June 30, 2023 and 2022, ~~our~~we have made cash lease payments ~~were~~totaling approximately $10 million and $2 ~~million.~~million, respectively. At the end of the initial lease term, we can negotiate to extend the lease term for an additional five years, subject to the approval of the participants; purchase the property subject to certain terms and conditions; or remarket the property to an unrelated third party. The lease contains a residual value guarantee of 100% of the total acquisition and construction costs.

Lessor

Our wholly owned subsidiary, Marathon E.G. Production Limited, is a lessor for residential housing in E.G., which is occupied by EGHoldings, a related party equity method investee – see Note 2120. The lease was classified as an operating lease and expires in 2024, with a lessee option to extend through 2034. Lease payments are fixed for the entire duration of the agreement at approximately $6 million per year. Our lease income is reported in other income in our consolidated statements of income for all periods presented. The undiscounted cash flows to be received under this lease agreement are summarized below.


(In millions)	(In millions)	Operating Lease Future Cash Receipts		(In millions)	Operating Lease Future Cash Receipts
2022		$	3
2023	2023	6		2023	$	3
2024	2024	6		2024	6
2025	2025	6		2025	6
2026	2026	6		2026	6
2027				2027	6
Thereafter	Thereafter	48		Thereafter	42
Total undiscounted cash flows	Total undiscounted cash flows	$	75	Total undiscounted cash flows	$	69

~~13.~~

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MARATHON OIL CORPORATION

Notes to Consolidated Financial Statements (Unaudited)

12. Derivatives

We may use derivatives to manage a portion of our exposure to commodity price risk, commodity locational risk and interest rate risk. For further information regarding the fair value measurement of derivative instruments, see Note 1413. All of our commodity derivatives and interest rate derivatives are subject to enforceable master netting arrangements or similar agreements under which we report net amounts.

The following tables present the gross fair values of our open derivative instruments and the reported net amounts along with ~~where they appear on the~~their locations in our consolidated balance sheets.


		June 30, 2022								June 30, 2023
(In millions)	(In millions)	Asset		Liability		Net Asset (Liability)		Balance Sheet Location	(In millions)	Asset		Liability		Net Asset (Liability)		Balance Sheet Location
Not Designated as Hedges	Not Designated as Hedges								Not Designated as Hedges
Commodity	Commodity	$	2	$	2	$	—	Other current assets	Commodity	$	9	$	—	$	9	Other current assets
Commodity		4		83		(79)		Other current liabilities

Total Not Designated as Hedges	Total Not Designated as Hedges	$	6	$	85	$	(79)		Total Not Designated as Hedges	$	9	$	—	$	9

Cash Flow Hedges	Cash Flow Hedges								Cash Flow Hedges
Interest Rate	Interest Rate	$	4	$	—	$	4	Other current assets	Interest Rate	$	10	$	—	$	10	Other current assets
Interest Rate	Interest Rate	12		—		12		Other noncurrent assets	Interest Rate	14		—		14		Other noncurrent assets

Total Designated Hedges	Total Designated Hedges	$	16	$	—	$	16		Total Designated Hedges	$	24	$	—	$	24
Total	Total	$	22	$	85	$	(63)		Total	$	33	$	—	$	33

~~MARATHON OIL CORPORATION~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

December 31, 2021
(In millions) Asset Liability Net Asset (Liability) Balance Sheet Location
Not Designated as Hedges
Commodity 1 8 (7) Other current liabilities
Interest Rate 27 — 27 Other noncurrent assets
Total Not Designated as Hedges $ 28 $ 8 $ 20
Cash Flow Hedges
Interest Rate $ — $ 3 $ (3) Other current liabilities
Interest Rate — 2 (2) Deferred credits and other liabilities
Total Designated Hedges $ — $ 5 $ (5)
Total $ 28 $ 13 $ 15


	December 31, 2022
(In millions)	Asset		Liability		Net Asset (Liability)		Balance Sheet Location
Not Designated as Hedges
Commodity	$	10	$	—	$	10	Other current assets


Total Not Designated as Hedges	$	10	$	—	$	10

Cash Flow Hedges
Interest Rate	$	9	$	—	$	9	Other current assets
Interest Rate	15		—		15		Other noncurrent assets
Total Designated Hedges	$	24	$	—	$	24
Total	$	34	$	—	$	34

Derivatives Not Designated as Hedges

Commodity Derivatives

We have entered into ~~multiple~~ crude oil and natural gas derivatives indexed to ~~the~~their respective indices as noted in the table below, related to a portion of our forecasted U.S. sales through 2023. These derivatives ~~consist of~~are three-way ~~collars, two-way collars and NYMEX roll basis swaps.~~collars. Three-way collars consist of a sold call (ceiling), a purchased put (floor) and a sold put. The ceiling price is the maximum we will receive for the contract volumes; the floor is the minimum price we will receive, unless the market price falls below the sold put strike price. In this case, we receive the NYMEX WTI price or the Henry Hub price plus the difference between the floor and the sold put price. These crude oil and natural gas derivatives were not designated as hedges.

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MARATHON OIL CORPORATION

Notes to Consolidated Financial Statements (Unaudited)

The following table sets forth outstanding derivative contracts as of June 30, ~~2022,~~2023, and the weighted average prices for those contracts:

2022 2023
Third Quarter Fourth Quarter First Quarter
Crude Oil
NYMEX WTI Three-Way Collars
Volume (Bbls/day) 30,000 30,000 0
Weighted average price per Bbl:
Ceiling $ 97.52 $ 97.52 0
Floor $ 56.67 $ 56.67 0
Sold put $ 46.67 $ 46.67 0
NYMEX Roll Basis Swaps
Volume (Bbls/day) 60,000 60,000 0
Weighted average price per Bbl $ 0.67 $ 0.67 0
Natural Gas
Henry Hub (“HH”) Two-Way Collars
Volume (MMBtu/day) 50,000 50,000
Weighted average price per MMBtu:
Ceiling $ 19.28 $ 19.28
Floor $ 5.00 $ 5.00
Henry Hub Three-Way Collars
Volume (MMBtu/day) 100,000 100,000 0
Weighted average price per MMBtu:
Ceiling $ 7.13 $ 7.13 0
Floor $ 3.88 $ 3.88 0
Sold Put $ 2.88 $ 2.88 0

~~MARATHON OIL CORPORATION~~

~~Notes to Consolidated Financial Statements (Unaudited)~~


	2023
		Third Quarter		Fourth Quarter
Crude Oil
NYMEX WTI Three-Way Collars
Volume (Bbls/day)		10,000		10,000
Weighted average price per Bbl:
Ceiling		$	97.59	$	97.59
Floor		$	60.00	$	60.00
Sold put		$	45.00	$	45.00





















Natural Gas






Henry Hub Three-Way Collars
Volume (MMBtu/day)		50,000		50,000
Weighted average price per MMBtu:
Ceiling		$	11.14	$	11.14
Floor		$	4.00	$	4.00
Sold Put		$	2.50	$	2.50

The unrealized and realized gain (loss) impact of our commodity derivative instruments appears in the table below and is reflected in net gain (loss) on commodity derivatives in the consolidated statements of income.


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	(In millions)	2022		2021		2022		2021		(In millions)	2023		2022		2023		2022
Unrealized gain (loss) on derivative instruments, net	Unrealized gain (loss) on derivative instruments, net	$	43	$	(75)	$	(71)	$	(157)	Unrealized gain (loss) on derivative instruments, net	$	(4)	$	43	$	(2)	$	(71)
Realized gain (loss) on derivative instruments, net(a)	Realized gain (loss) on derivative instruments, net(a)	$	(70)	$	(91)	$	(99)	$	(162)	Realized gain (loss) on derivative instruments, net(a)	$	7	$	(70)	$	20	$	(99)

(a)During the second quarter and first six months of 2023, net cash received for settled derivative positions was $7 million and $17 million, respectively. During the second quarter and first six months of 2022, net cash paid for settled derivative positions was $61 million and $89 ~~million, respectively. During the second quarter and first six months of 2021, net cash paid for settled derivative positions was $84 million and $95~~ million, respectively.

Interest Rate Swaps

During 2020, we entered into forward starting interest rate swaps with a notional amount of $350 million to hedge variations in cash flows arising from fluctuations in the LIBOR benchmark interest rate related to forecasted interest payments of a future debt issuance in 2025. The expected proceeds of the future debt issuance were intended to refinance ~~the~~our $900 million 3.85% Senior Notes due 2025 (“2025 Notes”). In September 2021, we fully redeemed these 2025 Notes. In March 2022, we closed these positions and settled the interest rate swaps for proceeds of $44 million. During the six months ended June 30, 2022, we recorded a cumulative $17 million gain within net interest ~~for~~and other within our consolidated statements of income related to these swaps.

~~During the second quarter of 2021, we de-designated $25 million of the $320 million Houston office cash flow hedges (discussed further in the~~ ~~Derivatives Designated as Cash Flow Hedges~~ section below), as the construction cost budget estimate was reduced. These interest rate swap contracts began to settle in January 2022. On June 10, 2022, we closed the $25 million de-designated hedges, which resulted in cash proceeds of approximately $2 million. As of June 30, 2022, the remaining open interest rate swaps for the Houston office (with a notional amount of $295 million) are still classified as cash flow hedges.

~~The following table presents, by maturity date, information about our de-designated forward starting interest rate swap agreements. These positions were fully liquidated as of June 30, 2022.~~
June 30, 2022 December 31, 2021
Maturity Date
Aggregate Notional Amount
(in millions)
Weighted Average, LIBOR
Aggregate Notional Amount
(in millions)
Weighted Average, LIBOR
June 1, 2025 $ — — % $ 350 0.95 %
September 9, 2026 $ — — % $ 25 1.45 %

Derivatives Designated as Cash Flow Hedges

During 2019, we entered into forward starting interest rate swaps with a ~~total notional amount~~maturity date of ~~$320 million~~September 9, 2026 to hedge variations in cash flows related to the ~~1-month LIBOR~~interest rate component of future lease payments of our ~~future~~ Houston office. ~~During~~As of June 30, 2023 and December 31, 2022, the ~~second quarter of 2021, we de-designated $25 million of these hedges as the construction cost budget estimate associated with the project was reduced (see discussion in preceding section). The~~ notional amount of open interest rate swaps for the Houston office iswas $295 million. The weighted average secured overnight financing rate (“SOFR”) for the swaps was 1.43% as of both June 30, 2023 and December 31, 2022.

The Houston office lease commenced in September 2021, however, our first cash lease payment for February 2022 rent was paid in ~~March.~~March 2022. The first settlement date for the interest rate swaps was in January 2022. ~~The last swap will mature in September 2026.~~ During the ~~second quarter and first~~ six months of~~2022,~~ended June 30, 2023, net cash ~~paid~~received for the settled interest rate swap positions was ~~$1 million and $2 million, respectively.~~$5 million. As of June 30, ~~2022,~~2023, we expect to reclassify $5a $11 million gain from accumulated other comprehensive income into ~~the~~our consolidated statements of income ~~statement~~ over the next twelve months. See Note 1211 for further details regarding ~~the lease of the~~ Houston ~~office.~~

~~The following table presents, by maturity date, information about our interest rate swap agreements, including the fixed weighted average LIBOR.~~

June 30, 2022 December 31, 2021
Maturity Date
Aggregate Notional Amount
(in millions)
Weighted Average, LIBOR
Aggregate Notional Amount
(in millions)
Weighted Average, LIBOR
September 9, 2026 $ 295 1.52 % $ 295 1.52 %

office lease.

1817

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MARATHON OIL CORPORATION

Notes to Consolidated Financial Statements (Unaudited)

~~14.~~

13. Fair Value Measurements

Fair Values – Recurring

The following tables present assets and liabilities accounted for at fair value on a recurring basis as of June 30, ~~2022~~2023 and December 31, ~~2021~~2022 by hierarchy level.


		June 30, 2022									June 30, 2023
(In millions)	(In millions)	Level 1		Level 2		Level 3		Total		(In millions)	Level 1		Level 2		Level 3		Total
Derivative instruments, assets	Derivative instruments, assets									Derivative instruments, assets

Commodity(a)										Commodity(a)	$	—	$	9	$	—	$	9

Interest rate - designated as cash flow hedges	Interest rate - designated as cash flow hedges	—		16		—		16		Interest rate - designated as cash flow hedges	—		24		—		24
Derivative instruments, assets	Derivative instruments, assets	$	—	$	16	$	—	$	16	Derivative instruments, assets	$	—	$	33	$	—	$	33
Derivative instruments, liabilities
Commodity(a)		$	(23)	$	(56)	$	—	$	(79)

Derivative instruments, liabilities		$	(23)	$	(56)	$	—	$	(79)
Total		$	(23)	$	(40)	$	—	$	(63)


		December 31, 2021									December 31, 2022
(In millions)	(In millions)	Level 1		Level 2		Level 3		Total		(In millions)	Level 1		Level 2		Level 3		Total
Derivative instruments, assets	Derivative instruments, assets									Derivative instruments, assets
Interest rate - not designated as cash flow hedges		$	—	$	27	$	—	$	27

Derivative instruments, assets		$	—	$	27	$	—	$	27
Derivative instruments, liabilities
Commodity(a)	Commodity(a)	$	(2)	$	(5)	$	—	$	(7)	Commodity(a)	$	—	$	10	$	—	$	10
Interest rate - designated as cash flow hedges	Interest rate - designated as cash flow hedges	—		(5)		—		(5)		Interest rate - designated as cash flow hedges	—		24		—		24
Derivative instruments, liabilities		$	(2)	$	(10)	$	—	$	(12)
Total		$	(2)	$	17	$	—	$	15
Derivative instruments, assets										Derivative instruments, assets	$	—	$	34	$	—	$	34

(a)Commodity derivative instruments are recorded on a net basis in our consolidated balance sheet. See Note 1312.

~~Commodity~~As of June 30, 2023, our commodity derivatives include three-way ~~collars, two-way collars and NYMEX roll basis swaps.~~collars. These instruments are measured at fair value using either a Black-Scholes or a modified Black-Scholes Model. For commodity swaps, inputs to the models include only commodity prices and interest rates and are categorized as Level 1 because all assumptions and inputs are observable in active markets throughout the term of the instruments. For three-way collars, inputs to the models include commodity prices and implied volatility and are categorized as Level 2 because predominantly all assumptions and inputs are observable in active markets throughout the term of the instruments.

The forward starting interest rate swaps are measured at fair value with a market approach using actionable broker quotes, which are Level 2 inputs. See Note 1312 for ~~detail~~details on the forward starting interest rate swaps.

~~Fair Values – Nonrecurring~~

~~See~~ ~~Note 10for detail on our fair values related to impairments.~~

Fair Values – Financial Instruments

Our current assets and liabilities include financial instruments, the most significant of which are receivables, the current portion of our long-term debt and payables. We believe the carrying values of our receivables and payables approximate fair value. Our fair value assessment incorporates a variety of considerations, including (1) the short-term duration of the instruments, (2) our credit rating and (3) our historical incurrence of and expected future insignificant bad debt expense, which includes an evaluation of counterparty credit risk.

~~MARATHON OIL CORPORATION~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

The following table summarizes financial instruments, excluding receivables, payables and derivative financial instruments, and their reported fair values by individual balance sheet line item at June 30, ~~2022~~2023 and December 31, ~~2021.~~2022.


		June 30, 2022				December 31, 2021					June 30, 2023				December 31, 2022
(In millions)	(In millions)	Fair Value		Carrying Amount		Fair Value		Carrying Amount		(In millions)	Fair Value		Carrying Amount		Fair Value		Carrying Amount
Financial assets	Financial assets									Financial assets
Current assets		$	—	$	—	$	11	$	10

Other noncurrent assets	Other noncurrent assets	10		28		12		27		Other noncurrent assets	$	10	$	28	$	10	$	28
Total financial assets	Total financial assets	$	10	$	28	$	23	$	37	Total financial assets	$	10	$	28	$	10	$	28
Financial liabilities	Financial liabilities									Financial liabilities
Current liabilities		$	110	$	166	$	99	$	136
Other current liabilities										Other current liabilities	$	130	$	195	$	140	$	204
Long-term debt, including current portion(a)	Long-term debt, including current portion(a)	3,996		4,000		4,705		4,033		Long-term debt, including current portion(a)	5,742		5,878		5,806		5,948
Deferred credits and other liabilities	Deferred credits and other liabilities	16		15		46		46		Deferred credits and other liabilities	62		63		73		73
Total financial liabilities	Total financial liabilities	$	4,122	$	4,181	$	4,850	$	4,215	Total financial liabilities	$	5,934	$	6,136	$	6,019	$	6,225

(a)Excludes debt issuance costs.

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MARATHON OIL CORPORATION

Notes to Consolidated Financial Statements (Unaudited)

Fair values of our financial assets included in other noncurrent assets, and of our financial liabilities included in other current liabilities and deferred credits and other liabilities, are measured using an income approach and most inputs are internally generated, which results in a Level 3 classification. Estimated future cash flows are discounted using a rate deemed appropriate to obtain the fair value.

~~All of our long-term~~Our fixed rate debt instruments are publicly traded. AThe fair value of our fixed rate debt is measured using a market approach, based upon quotes from major financial institutions, which are Level 2 ~~inputs,~~inputs. Our floating rate debt is ~~used to measure the~~non-public and consists of borrowings under our Term Loan Facility and Revolving Credit Facility. The fair value of our ~~debt.~~floating rate debt approximates the carrying value and is estimated based on observable market-based inputs, which results in a Level 2 classification.

~~15.~~14. Debt

Term Loan Facility

In November 2022, we entered into a term credit agreement, which provides for a two-year $1.5 billion term loan facility (“Term Loan Facility”) and we borrowed the full amount thereunder in December 2022. Borrowings under the Term Loan Facility can be prepaid without penalty. As of June 30, 2023, we had $1.5 billion in borrowings under our Term Loan Facility. The second quarter weighted average interest rate on borrowings under the Term Loan Facility was 6.84%.

The Term Loan Facility includes a covenant requiring our total debt to total capitalization ratio not to exceed 65% as of the last day of each fiscal quarter. In the event of a default, the lenders holding more than half of the commitments may terminate all of the commitments under the Term Loan Facility and require the immediate repayment of all outstanding borrowings under the Term Loan Facility. As of June 30, 2023, we were in compliance with this covenant with a ratio of 26%.

Revolving Credit Facility

As of June 30, ~~2022,~~2023, we had no borrowings of $450 million against our ~~$3.1~~$2.5 billion unsecured ~~revolving credit facility (“Credit Facility”).~~

~~On July 28, 2022, we executed the seventh amendment to our~~Revolving Credit Facility. The ~~primary changes to~~second quarter weighted average interest rate on borrowings under the Revolving Credit Facility effected by this amendment were to (i) extend the maturity date of the Credit Facility by three years to July 28, 2027, (ii) decrease the size of the Credit Facility from $3.1 billion to $2.5 billion, (iii) replace the LIBOR interest rate benchmark with the secured overnight financing rate (“SOFR”) and (iv) implement certain revisions to the Pricing Schedule.was 6.96%.

The Revolving Credit Facility includes a covenant requiring our total debt to total capitalization ratio not to exceed 65% as of the last day of each fiscal quarter. In the event of a default, the lenders holding more than half of the commitments may terminate the commitments under the Revolving Credit Facility and require the immediate repayment of all outstanding borrowings and the cash collateralization of all outstanding letters of credit under the Revolving Credit Facility. As of June 30, ~~2022,~~2023, we were in compliance with this covenant with a ratio of ~~19%~~26%.

Commercial Paper Program

During the second quarter of 2023, we obtained ratings for our commercial paper from Moody’s, Standard & Poor’s and Fitch. Pursuant to our U.S. commercial paper program, we may issue unsecured notes in a maximum aggregate face amount of $2.5 billion outstanding at any time, with maturities up to 365 days from the date of issuance. Our $2.5 billion U.S. commercial paper program is backed by our $2.5 billion Revolving Credit Facility and can be used to fund short-term working capital requirements. We did not issue commercial paper during the second quarter of 2023.

Debt Redemption

In ~~May 2022,~~March 2023, we ~~redeemed~~repaid the ~~$32~~$70 million ~~9.375%~~8.5% Senior Notes on the maturity date.

Long-term debt

At June 30, ~~2022,~~2023, we had ~~$4.0~~$5.9 billion of total long-term debt ~~outstanding, which includes $273 million of long-term debt due within one year. Included in long-term~~outstanding. Long-term debt due within one year ~~is $200~~consists of $131 million of 8.125% Senior Notes, which were repaid in ~~2.0% Bonds which feature a mandatory purchase~~connection with their maturity on ~~April 1,~~July 17, 2023. ~~We currently intend to retire our outstanding long-term debt as it matures.~~ Refer to our ~~2021~~2022 Annual Report on Form 10-K for a listing of our long-term debt maturities.

Debt Remarketing

On April 3, 2023, we closed a $200 million remarketing to investors of sub-series 2017A-1 bonds that are part of the $1 billion St. John the Baptist Parish, State of Louisiana revenue refunding bonds Series 2017. The bonds are subject to an interest rate of 4.05% and a mandatory purchase date of July 1, 2026. The repayment and new borrowing associated with the remarketed bonds are presented separately within Debt repayments and Borrowings, respectively, within the Consolidated Statements of Cash Flows.

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MARATHON OIL CORPORATION

Notes to Consolidated Financial Statements (Unaudited)

~~16.~~

15. Stockholders’ Equity

Our Board of Directors has authorized a share repurchase program. During the first six months of ~~2022,~~2023, we repurchased approximately ~~$1.4 billion of~~29 million shares of our common stock pursuant to the share repurchase ~~program. On May 4, 2022, our Board~~program at a cost of ~~Directors increased our remaining share repurchase program to $2.5 billion. The total~~$706 million. Our remaining share repurchase authorization was approximately ~~$2.0~~$1.8 billion at June 30, ~~2022.~~2023. Purchases under the program are made at our discretion and may be in either open market transactions, including block purchases, or in privately negotiated transactions using cash on hand, cash generated from operations or proceeds from potential asset sales. This program may be changed based upon our financial condition or changes in market conditions and is subject to termination prior to completion.

Additionally, during the first six months of ~~2022~~2023 we repurchased ~~$21~~$30 million of shares related to our tax withholding obligation associated with the vesting of employee restricted stock awards and restricted stock units; these repurchases do not impact our share repurchase program authorization.

~~Subsequent to the quarter, we repurchased approximately $282 million of shares of our common stock through August 3, 2022.~~

~~17.~~16. Incentive Based Compensation

Stock options, restricted stock and restricted stock units

The following table presents a summary of activity for the first six months of ~~2022:~~2023:


		Stock Options			Restricted Stock & Units				Stock Options			Restricted Stock & Units
		Number of Shares	Weighted Average Exercise Price		Number of Shares & Units	Weighted Average Grant Date Fair Value			Number of Shares	Weighted Average Exercise Price		Number of Shares & Units	Weighted Average Grant Date Fair Value
Outstanding at December 31, 2021		4,274,304	$	22.13	5,888,242	$	10.98
Outstanding at December 31, 2022								Outstanding at December 31, 2022	1,678,524	$	28.86	4,651,196	$	14.89
Granted	Granted	—	$	—	1,428,041	$	22.89	Granted	—	$	—	1,832,506	$	25.79
Exercised/Vested	Exercised/Vested	(1,842,093)	$	14.41	(2,738,788)	$	12.01	Exercised/Vested	(10,417)	$	10.47	(2,597,783)	$	11.99
Canceled	Canceled	(167,906)	$	34.55	(104,351)	$	13.49	Canceled	(122,054)	$	33.68	(116,259)	$	20.19
Outstanding at June 30, 2022		2,264,305	$	27.48	4,473,144	$	14.09
Outstanding at June 30, 2023								Outstanding at June 30, 2023	1,546,053	$	28.61	3,769,660	$	22.02

Stock-based performance unit awards

During the first six months of ~~2022,~~2023, we granted ~~167,043~~222,464 stock-based performance units to eligible officers, which are settled in shares. The grant date fair value per unit was ~~$34.07.~~$32.97. During the first six months of ~~2022,~~2023, we stock settled the units related to the 2020 grant. At June 30, 2023, there were 686,266 outstanding stock-based performance units to be settled in shares to officers.

During the first six months of 2023, we also granted ~~167,043~~222,464 stock-based performance units to eligible officers, which are settled in cash. At the grant date for these performance units, each unit represents the value of 1one share of our common stock. The fair value of each cash-settled performance unit was ~~$22.63~~$23.22 as of June 30, ~~2022.~~2023. During the first six months of 2023, we also cash settled the units related to the 2021 grant. At June 30, 2023, there were 389,507 units outstanding of the stock-based performance unit awards to be settled in cash to officers.

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MARATHON OIL CORPORATION

Notes to Consolidated Financial Statements (Unaudited)

~~18.~~

17. Defined Benefit Postretirement Plans

The following table summarizes the components of net periodic benefit costs (credits):


		Three Months Ended June 30,									Three Months Ended June 30,
		Pension Benefits				Other Benefits					Pension Benefits				Other Benefits
(In millions)	(In millions)	2022		2021		2022		2021		(In millions)	2023		2022		2023		2022
Service cost	Service cost	$	3	$	4	$	—	$	—	Service cost	$	4	$	3	$	—	$	—
Interest cost	Interest cost	2		2		1		1		Interest cost	3		2		—		1
Expected return on plan assets	Expected return on plan assets	(3)		(2)		—		—		Expected return on plan assets	(2)		(3)		—		—
Amortization:	Amortization:									Amortization:
– prior service credit	– prior service credit	(1)		(1)		(4)		(4)		– prior service credit	(1)		(1)		(4)		(4)
– actuarial loss	– actuarial loss	1		1		—		—		– actuarial loss	—		1		1		—
Net settlement loss(a)	Net settlement loss(a)	—		5		—		—		Net settlement loss(a)	—		—		—		—

Net periodic benefit costs (credits)(b)	Net periodic benefit costs (credits)(b)	$	2	$	9	$	(3)	$	(3)	Net periodic benefit costs (credits)(b)	$	4	$	2	$	(3)	$	(3)


		Six Months Ended June 30,									Six Months Ended June 30,
		Pension Benefits				Other Benefits					Pension Benefits				Other Benefits
(In millions)	(In millions)	2022		2021		2022		2021		(In millions)	2023		2022		2023		2022
Service cost	Service cost	$	7	$	8	$	—	$	—	Service cost	$	7	$	7	$	—	$	—
Interest cost	Interest cost	4		4		1		1		Interest cost	6		4		1		1
Expected return on plan assets	Expected return on plan assets	(5)		(4)		—		—		Expected return on plan assets	(4)		(5)		—		—
Amortization:	Amortization:									Amortization:
– prior service credit	– prior service credit	(3)		(3)		(8)		(8)		– prior service credit	(3)		(3)		(8)		(8)
– actuarial loss	– actuarial loss	1		3		1		1		– actuarial loss	—		1		1		1
Net settlement loss(a)	Net settlement loss(a)	—		5		—		—		Net settlement loss(a)	1		—		—		—

Net periodic benefit costs (credits)(b)	Net periodic benefit costs (credits)(b)	$	4	$	13	$	(6)	$	(6)	Net periodic benefit costs (credits)(b)	$	7	$	4	$	(6)	$	(6)

(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.

(b)Net periodic benefit costs (credits) reflects a calculated market-related value of plan assets which recognizes changes in fair value over three years.

During the first six months of ~~2022,~~2023, we made contributions of $9$6 million to our funded pension ~~plan.~~plan and we expect to make additional contributions of $6 million this year. We also made ~~a payment~~payments of $5$3 million ~~related~~ to each of our unfunded pension plan and other postretirement benefit plans. ~~We expect to contribute an additional $8 million in contributions to our funded pension plan this year.~~

~~MARATHON OIL CORPORATION~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

~~19.��~~18. Reclassifications Out of Accumulated Other Comprehensive Income (Loss)

The following table presents a summary of amounts reclassified from accumulated other comprehensive income (loss):


		Three Months Ended June 30,				Six Months Ended June 30,						Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	(In millions)	2022		2021		2022		2021		Income Statement Line	(In millions)	2023		2022		2023		2022		Income Statement Line
Postretirement and postemployment plans	Postretirement and postemployment plans										Postretirement and postemployment plans
Amortization of prior service credit	Amortization of prior service credit	$	5	$	5	$	11	$	11	Other net periodic benefit costs	Amortization of prior service credit	$	5	$	5	$	11	$	11	Other net periodic benefit credits
Amortization of actuarial loss	Amortization of actuarial loss	(1)		(1)		(2)		(4)		Other net periodic benefit costs	Amortization of actuarial loss	(1)		(1)		(1)		(2)		Other net periodic benefit credits
Net settlement loss	Net settlement loss	—		(5)		—		(5)		Other net periodic benefit costs	Net settlement loss	—		—		(1)		—		Other net periodic benefit credits

Interest rate swaps
Reclassification of de-designated forward interest rate swaps		—		(30)		—		(28)		Net interest and other

		(1)		—		(2)		—		Provision (benefit) for income taxes
Total reclassifications of (income) expense, net of tax (a)		$	3	$	(31)	$	7	$	(26)	Net income (loss)
Income Tax											Income Tax	(1)		(1)		(2)		(2)		Provision (benefit) for income taxes
Total reclassifications of expense, net of tax											Total reclassifications of expense, net of tax	$	3	$	3	$	7	$	7	Net income

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MARATHON OIL CORPORATION

Notes to Consolidated Financial Statements (Unaudited)

19. Supplemental Cash Flow Information


	Six Months Ended June 30,
(In millions)	2023		2022
Included in operating activities:
Interest paid(a)	$	139	$	99
Income taxes paid, net of refunds	$	97	$	93
Noncash investing activities:
Increase in asset retirement costs	$	12	$	3

(a)~~During 2021 we had a full valuation allowance on net federal deferred tax assets in~~The increase during the ~~U.S. and as such, there is no tax impact to our postretirement and postemployment plans for the three and~~ six months ended June 30, ~~2021.~~2023 compared to the same period in 2022 was primarily related to interest paid on borrowings under the Term Loan Facility and Revolving Credit Facility.

~~20. Supplemental Cash Flow Information~~

Six Months Ended June 30,
(In millions) 2022 2021
Included in operating activities:
Interest paid $ 99 $ 123
Income taxes paid to (received from) taxing authorities, net of refunds $ 93 $ 9
Noncash investing activities:
Increase in asset retirement costs $ 3 $ 38

Other noncash investing activities include accrued capital expenditures for the six months ended June 30, 2023 and 2022 of $169 million and ~~2021 of~~ $116 million, ~~and $85 million,~~ respectively.

~~MARATHON OIL CORPORATION~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

~~21.~~20. Equity Method Investments

During the periods ended June 30, ~~2022~~2023 and December 31, ~~2021~~2022 our equity method investees were considered related parties. Our investment in our equity method investees are summarized in the following table:
(In millions) Ownership as of June 30, 2022 June 30, 2022 December 31, 2021
EGHoldings (a)
56% $ 226 $ 148
Alba Plant LLC (b)
52% 166 154
AMPCO (c)
45% 136 148
Total $ 528 $ 450


(In millions)	Ownership as of June 30, 2023	June 30, 2023		December 31, 2022
EGHoldings (a)	56%	$	118	$	287
Alba Plant LLC (b)	52%	163		155
AMPCO (c)	45%	149		135
Total		$	430	$	577

(a)EGHoldings is engaged in LNG production activity.

(b)Alba Plant LLC processes LPG.

(c)AMPCO is engaged in methanol production activity.

Summarized, 100% combined financial information for equity method investees is as follows:

Three Months Ended June 30, Six Months Ended June 30,
(In millions) 2022 2021 2022 2021
Income data:
Revenues and other income $ 459 $ 246 $ 833 $ 481
Income (loss) from operations 306 111 535 207
Net income (loss) $ 272 $ 85 $ 476 $ 157


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2023		2022		2023		2022
Income data:
Revenues and other income	$	183	$	459	$	489	$	833
Income from operations	43		306		202		535
Net income	$	30	$	272	$	164	$	476

Revenues from related parties were $5 million and $11 million for the three and six months ended June 30, 2023 and $7 million and $15 million for the three and six months ended June 30, 2022, respectively, ~~$8 million and $16 million for the three and six months ended June 30, 2021, respectively,~~ with the majority related to EGHoldings in ~~all~~both periods.

Cash received from equity investees is classified as dividends or return of capital on the Consolidated Statements of Cash Flows. Dividends from equity method investees are reflected in the Operating activities section in Equity Method Investments, net while return of capital is reflected in the Investing activities section. Dividends and return of capital received by us totaled $249 million during the three and six months ended June 30, 2023 and $146 million and $200 million ~~for~~during the three and six months ended June 30, 2022, ~~respectively, and $50 million and $81 million for the three and six months ended June 30, 2021,~~ respectively.

Current receivables from related parties at June 30, ~~2022~~2023 and December 31, ~~2021~~2022 were ~~$28~~$15 million and ~~$23~~$36 million, respectively, ~~with the majority~~which primarily related to EGHoldings in both periods. Payables to related parties at June 30, 2023 and December 31, 2022 were $6$14 million ~~with the majority related to EGHoldings~~ and $20 million, ~~at December 31, 2021,~~respectively, with the majority related to Alba Plant ~~LLC.~~

~~22. Commitments and Contingencies~~

In the second quarter of 2019, Marathon E.G. Production Limited (“MEGPL”), a consolidated and wholly owned subsidiary, signed a series of agreements to process third-party Alen Unit gas through existing infrastructure locatedLLC in Punta Europa, E.G. Our equity method investee, Alba Plant LLC, is also a party to some of the agreements. These agreements require (subject to certain limitations) MEGPL to indemnify the owners of the Alen Unit against injury to Alba Plant LLC’s personnel and damage to or loss of Alba Plant LLC’s automobiles, as well as third party claims caused by Alba Plant LLC and certain environmental liabilities arising from certain hydrocarbons in the custody of Alba Plant LLC. At this time, we cannot reasonably estimate this obligation as we do not have any history of prior indemnification claims or environmental discharge or contamination. Therefore, we have not recorded a liability with respect to these indemnities since the amount of potential future payments under these indemnification clauses is not determinable.

The agreements to process the third-party Alen Unit gas required the execution of third-party guarantees by Marathon Oil Corporation in favor of the Alen Unit’s owners. NaN separate guarantees were executed during the second quarter of 2020; one for a maximum of approximately $91 million pertaining to the payment obligations of Equatorial Guinea LNG Operations, S.A. and another for a maximum of $25 million pertaining to the payment obligations of Alba Plant LLC. Payment by us would be required if any of those entities fails to honor its payment obligations pursuant to the relevant agreements with the owners of the Alen Unit. Certain owners of the Alen Unit, or their affiliates, are also direct or indirect shareholders in Equatorial Guinea LNG Operations, S.A. and Alba Plant LLC. Each guarantee expires no later than December 31, 2027. We measured these guaranteesboth periods.

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MARATHON OIL CORPORATION

Notes to Consolidated Financial Statements (Unaudited)

at fair value using the net present value of premium payments we expect to receive from our investees. Our liability for these guarantees was approximately $4 million as of June 30, 2022. Each of Equatorial Guinea LNG Operations, S.A.

21. Commitments and Equatorial Guinea LNG Train 1, S.A. provided us with a pledge of its receivables as recourse against any payments we may make under the guaranty of Equatorial Guinea LNG Operations, S.A.’s performance.Contingencies

Various groups, including the State of North Dakota and 3three Indian tribes (the ~~“NaN~~“Three Affiliated Tribes”) represented by the Bureau of Indian Affairs, have been involved in a dispute regarding the ownership of certain lands underlying the Missouri River and Little Missouri River (the “Disputed Land”) from which we currently produce. As a result, as of June 30, ~~2022,~~2023, we have a ~~$145~~$165 million current liability in suspended royalty and working interest revenue, including interest, of which ~~$133~~$144 million was included within accounts payable and ~~$12~~$21 million related to accrued interest and was included within other current liabilities on our consolidated balance sheet. Additionally, we have a long-term receivable of ~~$25~~$26 million for capital and expenses. The United States Department of the Interior (“DOI”) has addressed the United States’ position with respect to this dispute several times ~~over the past five~~in recent years with conflicting opinions. In January 2017, the DOI issued an opinion that the Disputed Land is held in trust for the ~~NaN~~Three Affiliated Tribes, then in June 2018 and May 2020 the DOI issued opinions concluding that the State of North Dakota held title to the Disputed Land. Most recently, on February 4, 2022, the DOI issued an opinion (“M-Opinion”) concluding the DOI’s position that the Disputed Land is held in trust for the ~~NaN~~Three Affiliated Tribes. While the latest M-Opinion is binding on all agencies within the DOI, it is not legally binding on third parties, including Marathon Oil, or a court. Depending on the ultimate outcome of this title dispute, the ~~NaN~~Three Affiliated Tribes could challenge the validity of certain of our leases relating to a portion of the disputed land, and if such challenge were successful it could result in operational delays and additional costs to us. Given the uncertainty in matters such as these, we are unable to predict the ultimate outcome of this matter at this time; however, we believe the resolution of this matter will not have a material adverse effect on our consolidated financial position, results of operations or cash flows.

We are a defendant in a number of legal and administrative proceedings arising in the ordinary course of business including, but not limited to, royalty claims, contract claims, tax disputes and environmental claims. While the ultimate outcome and impact to us cannot be predicted with certainty, we believe the resolution of these proceedings will not have a material adverse effect on our consolidated financial position, results of operations or cash flows. In addition, we may also be subject to retained liabilities with respect to certain divested assets by operation of law. For example, we are exposed to the risk that owners and/or operators of assets purchased from us become unable to satisfy plugging or abandonment obligations that attach to those assets. In that event, due to operation of law, we may be required to assume plugging or abandonment obligations for those assets. Although we have established reserves for such liabilities, we could be required to accrue additional amounts in the future and these amounts could be material.

Marathon Oil ~~has been named in various lawsuits alleging royalty underpayments in our domestic operations. We intend to vigorously defend ourselves against such claims. For instance, Marathon Oil has been~~was named in a lawsuit alleging improper royalty deductions in certain of our Oklahoma operations, and after plaintiffs ~~have sought~~lost their attempt to certify a class ~~certification, which~~action, a settlement was reached, and in the first quarter of 2023 such settlement was approved by the court ~~has so far denied.~~ and paid.

We have accrued for potential liabilities associated with these lawsuits based on currently available information; however, actual losses may exceed our accruals or we could be required to accrue additional amounts in the future.

~~In January 2020, we~~ received a Notice of ~~Violation~~Violations (“NOV”)’s from the EPA related to allegations of violations of the Clean Air ~~Act.~~Act with respect to our operations on the Fort Berthold Indian Reservation between 2015 and 2019. We ~~are~~continue to actively ~~negotiating~~negotiate a draft consent decree with the EPA and Department of Justice containing certain proposed injunctive terms relating to this enforcement action. The resolution of the enforcement action will likely include monetary sanctions and implementation of both environmental mitigation projects and injunctive terms, which would increase both our development costs and operating costs. ~~Given~~We maintain an accrual for estimated future costs related to this matter regarding actions required to retrofit or replace existing equipment, which we expect to incur over multiple years. Our accrual does not include possible monetary sanctions or costs associated with mitigation projects as we are currently unable to estimate those amounts. Through the date of this filing, there exists substantial uncertainty as to the ultimate result of this matter and it is reasonably possible the result could be materially different from our expectations and our accrual.

The Company received NOV’s from the EPA relating to alleged Clean Air Act violations following flyovers conducted in ~~matters such as~~2020 and 2022 over certain of the Company’s oil and gas facilities in New Mexico. The notices involve alleged emission and permitting violations. We initiated discussions with the EPA to resolve these matters. As we are still investigating these allegations, we are unable to ~~predict~~estimate the ~~ultimate outcome~~potential loss associated with these matters, however, it is reasonably possible that resolution of ~~this matter at this time. However, we believe that any penalties, mitigation costs or corrective actions that~~these matters may result ~~from this matter will not have~~in a ~~material adverse effect on our consolidated financial position, results~~fine or penalty in excess of ~~operations or cash flows.~~$300,000.

We have incurred and will continue to incur capital, operating and maintenance and remediation expenditures as a result of environmental laws and regulations. If these expenditures, as with all costs, are not ultimately offset by the prices we receive for our products and services, our operating results will be adversely affected. We believe that substantially all of our competitors must comply with similar environmental laws and regulations. However, the specific impact on each competitor may vary depending on a number of factors, including the age and location of its operating facilities, marketing areas and production processes. These laws generally provide for control of pollutants released into the environment and require responsible parties to undertake remediation of hazardous waste disposal sites. Penalties may be imposed for noncompliance.

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MARATHON OIL CORPORATION

Notes to Consolidated Financial Statements (Unaudited)

At June 30, ~~2022,~~2023, accrued liabilities for remediation relating to environmental laws and regulations were not material. It is not presently possible to estimate the ultimate amount of all remediation cost that might be incurred or the penalties that may be imposed.

In the second quarter of 2019, Marathon E.G. Production Limited (“MEGPL”), a consolidated and wholly owned subsidiary, signed a series of agreements to process third-party Alen Unit gas through existing infrastructure located in Punta Europa, E.G. Our equity method investee, Alba Plant LLC, is also a party to some of the agreements. These agreements require (subject to certain limitations) MEGPL to indemnify the owners of the Alen Unit against injury to Alba Plant LLC’s personnel and damage to or loss of Alba Plant LLC’s automobiles, as well as third party claims caused by Alba Plant LLC and certain environmental liabilities arising from certain hydrocarbons in the custody of Alba Plant LLC. At this time, we cannot reasonably estimate this obligation as we do not have any history of prior indemnification claims or environmental discharge or contamination. Therefore, we have not recorded a liability with respect to these indemnities since the amount of potential future payments under these indemnification clauses is not determinable.

The agreements to process the third-party Alen Unit gas required the execution of third-party guarantees by Marathon Oil Corporation in favor of the Alen Unit’s owners. Two separate guarantees were executed during the second quarter of 2020; one for a maximum of approximately $91 million pertaining to the payment obligations of Equatorial Guinea LNG Operations, S.A. and another for a maximum of $25 million pertaining to the payment obligations of Alba Plant LLC. Payment by us would be required if any of those entities fails to honor its payment obligations pursuant to the relevant agreements with the owners of the Alen Unit. Certain owners of the Alen Unit, or their affiliates, are also direct or indirect shareholders in Equatorial Guinea LNG Operations, S.A. and Alba Plant LLC. Each guarantee expires no later than December 31, 2027. We measured these guarantees at fair value using the net present value of premium payments we expect to receive from our investees. Our liability for these guarantees was approximately $4 million as of June 30, 2023. Each of Equatorial Guinea LNG Operations, S.A. and Equatorial Guinea LNG Train 1, S.A. provided us with a pledge of its receivables as recourse against any payments we may make under the guaranty of Equatorial Guinea LNG Operations, S.A.’s performance.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

Critical Accounting Estimates

~~Accounting Standards Not Yet Adopted~~

Cash Flows

Liquidity and Capital Resources

Environmental Matters and Other Contingencies

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the preceding consolidated financial statements and notes in Item 1.

Executive Overview

We are an independent exploration and production company, focused on U.S. resource plays: Eagle Ford in Texas, Bakken in North Dakota, STACK and SCOOP in Oklahoma and ~~Northern Delaware~~Permian in New ~~Mexico.~~Mexico and Texas. Our U.S. assets are complemented by our international operations in E.G. Our overall business strategy is to responsibly deliver competitive corporate return levels, free cash flow and cash returns to shareholders, all of which are sustainable and resilient through long-term commodity price cycles. We expect to achieve our business strategy by adherence to a disciplined reinvestment rate capital allocation framework that limits our capital expenditures relative to our expected cash flow from operations. Keeping our workforce safe, maintaining a strong balance sheet, responsibly meeting global energy demand with a focus on continuously improving environmental performance, serving as a trusted partner in our local communities and maintaining best in-class corporate governance standards are foundational to the execution of our strategy.

In December 2022, we closed on a transaction to acquire approximately 130,000 net proved and unproved acres, with an average 97% working interest, in the Eagle Ford resource play from Ensign Natural Resources (“Ensign”) for cash consideration of $3.0 billion.

Compared to the ~~prior year’s quarter,~~same period of 2022, we experienced a ~~significant increase~~decrease in ~~revenues,~~revenue and net income from operations and operating cash flow, ~~all~~primarily as a result of ~~which were driven by higher~~lower commodity prices. Total company net sales volumes ~~were roughly flat. Our cash generated from operations more than funded our capital program, dividend payments and share repurchases. These results and activities are consistent with our prioritization~~increased during the second quarter of ~~free cash flow generation and adherence~~2023 when compared to ~~our disciplined capital allocation framework.~~prior year quarter. Below are certain key financial and operational highlights for the quarter:

~~Improved financial~~Financial and operational results

•Our net income was ~~$966~~$287 million in the second quarter of ~~2022~~2023 as compared to net income of ~~$16~~$966 million in the same period last year. Included in our financial results for the current quarter:

◦Revenues from contracts with customers ~~increased $914~~decreased $684 million compared to the same quarter last year as a result of lower realized commodity prices, ~~were significantly higher.~~partially offset by increased sales.

◦We recorded a net gain of $3 million on commodity derivatives as compared to a net loss of $27 million during the same quarter last year.

◦Income from equity method investments ~~of $152~~decreased $130 million ~~an increase of $103 million from~~compared to the same ~~period in 2021, due to higher~~quarter last year as a result of lower realized commodity prices.

◦~~Net losses on commodity derivatives were lower by $139~~Depreciation, depletion and amortization was $559 million, which was an increase of $123 million as compared to the same quarter last year.

◦•~~As a result of higher income before taxes, our provision for income taxes~~Net sales volumes in the U.S. segment increased ~~by $269 million~~26% compared to the same ~~quarter~~period last ~~year. See~~ ~~Note 6~~ toyear, primarily driven by increased production from the ~~consolidated financial statements for discussion of the increase in income taxes.~~acreage acquired from Ensign.

~~Maintained investment grade balance sheet, increased~~Prioritized return of capital to investors and maintained investment grade balance sheet

•In the first six months of 2023, we repurchased $706 million of shares through our share repurchase program.

•As of June 30, 2023, we have $215 million of cash on hand and $2.3 billion of total liquidity.

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•Paid $125 million of dividends, or $0.20 per share, during the first six months of 2023, compared to dividends paid of $0.15 per share during the first six months of 2022.

•All three primary credit rating agencies continue to rate us as investment ~~grade.~~

•~~As of~~grade, with Fitch and Moody’s reaffirming our credit rating in June ~~30, 2022, we have $1.2 billion of cash on hand and $4.3 billion of total liquidity. Refer to~~ ~~Liquidity and~~

~~Capital Resources~~ ~~for information on a subsequent event regarding the amendment of our Credit Facility.~~

•~~In the first six months of 2022, we repurchased approximately $1.4 billion of shares through our share repurchase program.~~

•~~Paid $108 million of dividends, or $0.15 per share, during the first six months of 2022. This is more than double the dividends paid of $0.07 per share during the first six months of 2021.~~2023.

Outlook

Capital Budget

~~Our Board of Directors has approved~~In February 2023, we announced a ~~2022~~2023 capital budget of ~~$1.3 billion. We continue~~$1.9 billion to ~~monitor inflationary pressures given~~$2.0 billion that prioritizes free cash flow generation over production growth, consistent with our disciplined capital allocation framework. Approximately 60% of the ~~labor market, commodity prices, supply chain challenges and geopolitical instability.~~2023 capital budget is weighted to the first half of the year.

Operations

The following table presents a summary of our sales volumes for each of our segments. Refer to Results of Operations for a price-volume analysis for each of the segments.


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended June 30,				Six Months Ended June 30,
Net Sales Volumes	Net Sales Volumes	2022	2021	Increase (Decrease)		2022	2021	Increase (Decrease)		Net Sales Volumes	2023	2022	Increase (Decrease)		2023	2022	Increase (Decrease)
United States (mboed)	United States (mboed)	283	283	—	%	282	279	1	%	United States (mboed)	356	283	26	%	349	282	24	%
International (mboed)	International (mboed)	60	65	(8)	%	60	66	(9)	%	International (mboed)	44	60	(27)	%	50	60	(17)	%
Total (mboed)	Total (mboed)	343	348	(1)	%	342	345	(1)	%	Total (mboed)	400	343	17	%	399	342	17	%

United States

~~Net sales volumes in the segment were consistent in the second quarter of 2022 as compared to the second quarter of 2021.~~

The following tables provide additional details regarding net sales volumes, sales mix and operational drilling activity for our significant operations within this ~~segment:~~segment. Effective in 2023, the Texas Delaware oil play, which was previously included within Other United States as an exploration property, was integrated into the Permian resource play. The increase in net sales volumes in our U.S. segment compared to the same period in the prior year was primarily a result of our acquisition of the Eagle Ford assets of Ensign in December 2022.


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended June 30,				Six Months Ended June 30,
Net Sales Volumes	Net Sales Volumes	2022	2021	Increase (Decrease)		2022	2021	Increase (Decrease)		Net Sales Volumes	2023	2022	Increase (Decrease)		2023	2022	Increase (Decrease)
Equivalent Barrels (mboed)	Equivalent Barrels (mboed)									Equivalent Barrels (mboed)
Eagle Ford	Eagle Ford	84	91	(8)	%	82	84	(2)	%	Eagle Ford	156	84	86	%	150	82	83	%
Bakken	Bakken	114	107	7	%	116	109	6	%	Bakken	108	114	(5)	%	102	116	(12)	%
Oklahoma	Oklahoma	56	54	4	%	54	54	—	%	Oklahoma	50	56	(11)	%	52	54	(4)	%
Northern Delaware		20	24	(17)	%	20	25	(20)	%
Permian										Permian	40	20	100	%	43	20	115	%
Other United States	Other United States	9	7	29	%	10	7	43	%	Other United States	2	9	(78)	%	2	10	(80)	%
Total United States	Total United States	283	283	—	%	282	279	1	%	Total United States	356	283	26	%	349	282	24	%


		Three Months Ended June 30, 2022											Three Months Ended June 30, 2023
Sales Mix - U.S. Resource Plays	Sales Mix - U.S. Resource Plays	Eagle Ford		Bakken		Oklahoma		Northern Delaware		Total		Sales Mix - U.S. Resource Plays	Eagle Ford		Bakken		Oklahoma		Permian		Total
Crude oil and condensate	Crude oil and condensate	64	%	66	%	25	%	51	%	56	%	Crude oil and condensate	52	%	63	%	19	%	53	%	51	%
Natural gas liquids	Natural gas liquids	18	%	22	%	32	%	23	%	23	%	Natural gas liquids	25	%	23	%	35	%	25	%	26	%
Natural gas	Natural gas	18	%	12	%	43	%	26	%	21	%	Natural gas	23	%	14	%	46	%	22	%	23	%

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		Three Months Ended June 30,		Six Months Ended June 30,			Three Months Ended June 30,		Six Months Ended June 30,
Drilling Activity - U.S. Resource Plays	Drilling Activity - U.S. Resource Plays	2022	2021	2022	2021	Drilling Activity - U.S. Resource Plays	2023	2022	2023	2022
Gross Operated	Gross Operated					Gross Operated
Eagle Ford:	Eagle Ford:					Eagle Ford:
Wells drilled to total depth	Wells drilled to total depth	32	23	62	53	Wells drilled to total depth	30	32	65	62
Wells brought to sales	Wells brought to sales	19	45	47	70	Wells brought to sales	49	19	85	47
Bakken:	Bakken:					Bakken:
Wells drilled to total depth	Wells drilled to total depth	10	17	24	39	Wells drilled to total depth	27	10	45	24
Wells brought to sales	Wells brought to sales	20	16	40	19	Wells brought to sales	23	20	40	40
Oklahoma:	Oklahoma:					Oklahoma:
Wells drilled to total depth	Wells drilled to total depth	—	—	3	—	Wells drilled to total depth	3	—	4	3
Wells brought to sales	Wells brought to sales	10	—	19	—	Wells brought to sales	—	10	5	19
Northern Delaware:
Permian:						Permian:
Wells drilled to total depth	Wells drilled to total depth	3	—	5	—	Wells drilled to total depth	6	3	14	5
Wells brought to sales	Wells brought to sales	—	—	—	—	Wells brought to sales	8	—	16	—

International

Net sales volumes were lower induring the ~~second quarter of 2022~~three and six months ended June 30, 2023 as compared to the ~~second quarter of 2021~~same period in the prior year primarily due to the impact of a turnaround completed in April 2023 and natural decline. The following table provides details regarding net sales volumes for our operations within this segment:

Three Months Ended June 30, Six Months Ended June 30,
Net Sales Volumes 2022 2021 Increase (Decrease) 2022 2021 Increase (Decrease)
Equivalent Barrels (mboed)
Equatorial Guinea 60 65 (8) % 60 66 (9) %
Equity Method Investees
LNG (mtd)
2,601 3,094 (16) % 3,043 3,220 (5) %
Methanol (mtd)
964 744 30 % 973 917 6 %
Condensate and LPG (boed)
10,363 7,892 31 % 8,648 9,303 (7) %


	Three Months Ended June 30,				Six Months Ended June 30,
Net Sales Volumes	2023	2022	Increase (Decrease)		2023	2022	Increase (Decrease)
Equivalent Barrels (mboed)
Equatorial Guinea	44	60	(27)	%	50	60	(17)	%



Equity Method Investees
LNG (mtd)	1,716	2,601	(34)	%	1,913	3,043	(37)	%
Methanol (mtd)	1,047	964	9	%	1,212	973	25	%
Condensate and LPG (boed)	6,614	10,363	(36)	%	7,709	8,648	(11)	%

Market Conditions

Commodity prices are the most significant factor impacting our revenues, profitability, operating cash flows, the amount of capital we invest in our business, redemption of our debt, payment of dividends and funding of share repurchases. ~~Beginning~~Commodity prices experienced significant volatility in ~~December 2020~~2022 and ~~continuing through~~this has continued into 2023. Russia’s invasion of Ukraine was a geopolitical shock that caused energy prices to spike significantly higher in early to mid-2022. However, Russian oil production has remained at higher levels than expected, European gas shortages were averted as record levels of LNG were imported into that market and an exceptionally warm winter in both the ~~first six months of 2022, commodity~~US and Europe has refilled gas inventories to multi year highs causing prices ~~continued~~ to ~~increase due~~fall back significantly. Economic headwinds, caused by increasing interest rates as central banks continue to ~~rising oil~~fight inflation, are a threat to demand growth as ~~global economic activity increased. Higher commodity prices were~~we move forward. In addition, demand growth in China will continue to have an impact as they emerge from strict COVID restrictions. Price volatility was also ~~supported~~exacerbated by ongoing ~~OPEC~~OPEC+ petroleum supply limitations ~~conflicts~~ and economic sanctions involving producer countries. We continue to expect commodity price volatility given the complex global dynamics of supply and demand that exist in the market ~~including geopolitical events. Refe~~. Refer to Item 1A. Risk Factors in our ~~2021~~2022 Annual Report on Form 10-K for further discussion on how volatility in commodity prices could impact us.

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United States

The following table presents our average price realizations and the related benchmarks for crude oil and condensate, NGLs and natural gas for the second quarter and first six months of ~~2022~~2023 and ~~2021.~~2022.


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended June 30,						Six Months Ended June 30,
		2022		2021		Increase (Decrease)		2022		2021		Increase (Decrease)			2023		2022		Increase (Decrease)		2023		2022		Increase (Decrease)
Average Price Realizations(a)	Average Price Realizations(a)													Average Price Realizations(a)
Crude oil and condensate (per bbl)(b)	Crude oil and condensate (per bbl)(b)	$	110.10	$	64.73	70	%	$	102.29	$	60.08	70	%	Crude oil and condensate (per bbl)(b)	$	72.49	$	110.10	(34)	%	$	73.57	$	102.29	(28)	%
Natural gas liquids (per bbl)~~(c)~~	Natural gas liquids (per bbl)~~(c)~~	40.32		24.17		67	%	38.84		24.06		61	%	Natural gas liquids (per bbl)~~(c)~~	18.72		40.32		(54)	%	21.25		38.84		(45)	%
Natural gas (per mcf)(d)		6.84		2.61		162	%	5.84		4.43		32	%
Natural gas (per mcf)(c)														Natural gas (per mcf)(c)	1.89		6.84		(72)	%	2.43		5.84		(58)	%
Benchmarks	Benchmarks													Benchmarks
WTI crude oil average of daily prices (per bbl)	WTI crude oil average of daily prices (per bbl)	$	108.52	$	66.17	64	%	$	101.77	$	62.22	64	%	WTI crude oil average of daily prices (per bbl)	$	73.56	$	108.52	(32)	%	$	74.77	$	101.77	(27)	%
Magellan East Houston (“MEH”) crude oil average of daily prices (per bbl)	Magellan East Houston (“MEH”) crude oil average of daily prices (per bbl)	112.35		67.13		67	%	104.51		63.22		65	%	Magellan East Houston (“MEH”) crude oil average of daily prices (per bbl)	74.93		112.35		(33)	%	76.14		104.51		(27)	%
Mont Belvieu NGLs (per bbl)~~(e)~~(d)	Mont Belvieu NGLs (per bbl)~~(e)~~(d)	41.73		24.81		68	%	39.99		24.40		64	%	Mont Belvieu NGLs (per bbl)~~(e)~~(d)	20.49		41.73		(51)	%	22.91		39.99		(43)	%
Henry Hub natural gas settlement date average (per mmbtu)	Henry Hub natural gas settlement date average (per mmbtu)	7.17		2.83		153	%	6.06		2.76		120	%	Henry Hub natural gas settlement date average (per mmbtu)	2.10		7.17		(71)	%	2.76		6.06		(54)	%

(a)Excludes gains or losses on commodity derivative instruments.

(b)Inclusion of realized gains (losses) on crude oil derivative instruments would have decreased average price realizations by $4.43 per bbl ~~and $5.54 per bbl~~ for the second quarter ~~2022 and 2021, respectively.~~of 2022. Inclusion of realized gains (losses) on crude oil derivative instruments would have decreased average price realizations by $3.22 per bbl ~~and $5.08 per bbl~~ for the first six months of ~~2022 and 2021, respectively.~~2022.

(c)Inclusion of realized gains (losses) on NGL derivative instruments would have no impact for the second quarter 2022 and the second quarter 2021 would have decreased average price realizations by $1.15 per bbl. Inclusion of realized gains (losses) on NGL derivative instruments would have no impact per bbl for the first six months of 2022 and decreased average price realization by $1.24 for the six months ended 2021.

~~(d)~~Inclusion of realized gains (losses) on natural gas derivative instruments would have minimal impact on average price realizations for the second quarter and ~~the~~ first six months of ~~2022~~2023 and ~~2021.~~2022.

~~(e)~~(d)Bloomberg Finance LLP: Y-grade Mix NGL of 55% ethane, 25% propane, 5% butane, 8% isobutane and 7% natural gasoline.

Crude oil and condensate – Price realizations may differ from benchmarks due to the quality and location of the product.

Natural gas liquids – The majority of our sales volumes are sold at reference to Mont Belvieu prices.

Natural gas – A significant portion of our volumes are sold at bid-week prices, or first-of-month indices relative to our producing areas.

International (E.G.)

The following table presents our average price realizations and the related benchmark for crude oil for the second quarter and first six months of ~~2022~~2023 and ~~2021.~~2022.


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended June 30,						Six Months Ended June 30,
		2022		2021		Increase (Decrease)		2022		2021		Increase (Decrease)			2023		2022		Increase (Decrease)		2023		2022		Increase (Decrease)
Average Price Realizations	Average Price Realizations													Average Price Realizations
Crude oil and condensate (per bbl)	Crude oil and condensate (per bbl)	$	79.74	$	52.78	51	%	$	71.14	$	49.06	45	%	Crude oil and condensate (per bbl)	$	53.64	$	79.74	(33)	%	$	56.46	$	71.14	(21)	%
Natural gas liquids (per bbl)	Natural gas liquids (per bbl)	1.00		1.00		—	%	1.00		1.00		—	%	Natural gas liquids (per bbl)	1.00		1.00		—	%	1.00		1.00		—	%
Natural gas (per mcf)	Natural gas (per mcf)	0.24		0.24		—	%	0.24		0.24		—	%	Natural gas (per mcf)	0.24		0.24		—	%	0.24		0.24		—	%
Benchmark	Benchmark													Benchmark
Brent (Europe) crude oil (per bbl)(a)	Brent (Europe) crude oil (per bbl)(a)	$	113.54	$	68.83	65	%	$	106.92	$	64.83	65	%	Brent (Europe) crude oil (per bbl)(a)	$	78.32	$	113.54	(31)	%	$	79.75	$	106.92	(25)	%

(a)Average of monthly prices obtained from the United States Energy Information Agency website.

Crude oil and condensate – Alba field liquids production is primarily condensate. ~~MEGPL and Marathon E.G. International Limited~~We generally sell ~~their~~our share of condensate in relation to the Brent crude benchmark. Alba Plant LLC processes the rich hydrocarbon gas which is supplied by the Alba field under a fixed-price ~~long-term~~long term contract. Alba Plant LLC extracts NGLs and ~~secondary~~ condensate which is then sold by Alba Plant LLC at market prices, with our share of the revenue reflected in income from equity method investments on the consolidated statements of income. Alba Plant LLC delivers the processed dry natural gas to the Alba Unit Parties for distribution and sale to AMPCO and EG LNG.

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Natural gas liquids – Wet gas is sold to Alba Plant LLC at a fixed-price ~~long-term~~long term contract resulting in realized prices not tracking market price. Alba Plant LLC extracts and keeps NGLs, which are sold at market price, with our share of income from Alba Plant LLC being reflected in the income from equity method investments on the consolidated statements of income.

Natural gas – Dry natural gas, processed by Alba Plant LLC on behalf of the Alba Unit Parties, is sold by the Alba field to EG LNG and AMPCO at fixed-price ~~long-term~~ contracts resulting in realized prices not tracking market price. The gas sales contracts between Alba Unit and EG LNG and AMPCO expire on December 31, 2023 and in 2026, respectively. We derive additional value from the equity investment in our downstream gas processing units EG LNG and AMPCO. EG LNG sells LNG on a market-based ~~long-term~~ contract and AMPCO markets methanol at market prices. In March 2023, we announced the signing of a HOA to progress the development of the Equatorial Guinea Regional Gas Mega Hub. The next phase involves processing Alba Unit gas under new contractual terms effective January 1, 2024, that would increase our exposure to global LNG market prices. In addition to processing Alba Unit gas, Alba Plant LLC and EG LNG process ~~third party~~third-party gas from the Alen field under a combination of a tolling and a market linked profit-sharing arrangement, the benefits of which are included in our respective share of income from equity method investees. This profit-sharing arrangement provides exposure to global LNG market prices.

Results of Operations

Three Months Ended June 30, ~~2022~~2023 vs. Three Months Ended June 30, ~~2021~~2022

Revenues from contracts with customers are presented by segment in the table below:


		Three Months Ended June 30,					Three Months Ended June 30,
(In millions)	(In millions)	2022		2021		(In millions)	2023		2022
Revenues from contracts with customers	Revenues from contracts with customers					Revenues from contracts with customers
United States	United States	$	2,089	$	1,189	United States	$	1,440	$	2,089
International	International	79		65		International	44		79
Segment revenues from contracts with customers	Segment revenues from contracts with customers	$	2,168	$	1,254	Segment revenues from contracts with customers	$	1,484	$	2,168

Below is a price/volume analysis for each segment. Refer to the preceding Operations and Market Conditions sections for additional detail related to our net sales volumes and average price realizations.


				Increase (Decrease) Related to									Increase (Decrease) Related to
(In millions)	(In millions)	Three Months Ended June 30, 2021		Price Realizations		Net Sales Volumes		Three Months Ended June 30, 2022		(In millions)	Three Months Ended June 30, 2022		Price Realizations		Net Sales Volumes		Three Months Ended June 30, 2023
United States Price/Volume Analysis	United States Price/Volume Analysis									United States Price/Volume Analysis
Crude oil and condensate	Crude oil and condensate	$	936	$	648	$	(11)	$	1,573	Crude oil and condensate	$	1,573	$	(620)	$	242	$	1,195
Natural gas liquids	Natural gas liquids	131		96		12		239		Natural gas liquids	239		(179)		96		156
Natural gas	Natural gas	91		142		(5)		228		Natural gas	228		(227)		85		86
Other sales		31						49
Other sales(a)										Other sales(a)	49						3
Total	Total	$	1,189					$	2,089	Total	$	2,089					$	1,440
International Price/Volume Analysis	International Price/Volume Analysis									International Price/Volume Analysis
Crude oil and condensate	Crude oil and condensate	$	58	$	24	$	(11)	$	71	Crude oil and condensate	$	71	$	(19)	$	(13)	$	39
Natural gas liquids	Natural gas liquids	1		—		(1)		—		Natural gas liquids	—		—		—		—
Natural gas	Natural gas	5		1		1		7		Natural gas	7		—		(3)		4
Other sales	Other sales	1						1		Other sales	1						1
Total	Total	$	65					$	79	Total	$	79					$	44

(a)Includes revenue from commodity volumes purchased for resale.

Net gain (loss) on commodity derivatives in the second quarter of ~~2022,~~2023 was a ~~loss~~net gain of ~~$27~~$3 million, compared to a net loss of ~~$166~~$27 million for the same period in ~~2021.~~2022. We have ~~multiple crude oil, natural gas and NGL~~commodity derivative contracts ~~that~~which settle against ~~various indices.~~the NYMEX WTI and Henry Hub indexes. We record commodity derivative gains/losses as the index pricing and forward curves change each period. See Note 1312 to the consolidated financial statements for further information.

Income from equity method investments ~~increased $103 million in second quarter of 2022. Our investees benefited from higher price realizations in 2022.~~

~~Production expenses~~ ~~increased $38~~decreased $130 million in the second quarter of 2023, when compared to the second quarter of 2022, ~~versus~~primarily due to lower prices realized by our equity method investees during the second quarter of 2023, as well as lower production as a result of a turnaround at our E.G. facilities completed in April 2023.

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Production expenses increased $50 million in the second quarter of 2023, when compared to the same period in ~~2021,~~2022, primarily as a result of our acquisition of the ~~U.S. segment’s higher project and workover activity~~Eagle Ford assets of Ensign in December 2022 and inflationary pressures ~~on labor, fuel, chemicals and services.~~when compared to the second quarter of 2022. In addition, in our International segment, production expenses were higher due to the April turnaround.

The following table provides production expense and production expense rates (expense per boe) for each segment:


		Three Months Ended June 30,													Three Months Ended June 30,
($ in millions; rate in $ per boe)	($ in millions; rate in $ per boe)	2022		2021		Increase (Decrease)		2022		2021		Increase (Decrease)		($ in millions; rate in $ per boe)	2023		2022		Increase (Decrease)		2023		2022		Increase (Decrease)
Production Expense and Rate	Production Expense and Rate	Expense						Rate						Production Expense and Rate	Expense						Rate
United States	United States	$	150	$	113	33	%	$	5.80	$	4.41	32	%	United States	$	191	$	150	27	%	$	5.88	$	5.80	1	%
International	International	$	14	$	13	8	%	$	2.83	$	2.17	30	%	International	$	23	$	14	64	%	$	5.72	$	2.83	102	%

Shipping, handling and other operating ~~increased $24~~decreased $30 million in the second quarter of ~~2022 versus~~2023 when compared to the same period in ~~2021. As disclosed in our Form 10-K, certain~~2022, primarily due to lower purchases of our processing arrangements with midstream entities are percentage-of-proceeds contracts. We classify the proceeds retained by the midstream companies as shipping and handling costs. The increase in shipping and handling costs of these percentage-of-proceeds contracts coincides with the increase in realized natural gas liquids and natural gas prices. In addition, higher marketing costs contributed to the increase as we purchased additionalcommodity volumes for resale to satisfy transportation ~~commitments.~~

~~Exploration expensesinclude unproved property impairments, dry well costs, geological and geophysical and other costs.~~commitments as compared to the prior period. The decrease is partially offset by an increase in ~~unproved property impairments is due to~~third party consultant fees associated with a ~~combination~~nonrecurring Eagle Ford severance tax refund during the second quarter of factors including timing of lease expiration dates and decisions not to develop acreage deemed non-core in 2021. We incurred less amortization expense related to insignificant unproved property lease balances in 2022.2023.

~~The following table summarizes the components of exploration expenses:~~

Three Months Ended June 30,
(In millions) 2022 2021 Increase (Decrease)
Exploration Expenses
Unproved property impairments $ 6 $ 22 (73) %
Dry well costs — — — %
Geological and geophysical 1 1 — %
Other 1 2 (50) %
Total exploration expenses $ 8 $ 25 (68) %

Depreciation, depletion and amortization ~~decreased $96~~increased $123 million in the second quarter of ~~2022~~2023 primarily as a result of ~~lower DD&A (expense per boe) rate impacted by field-level changes in reserves. In addition, the DD&A rate is impacted by capitalized costs and the sales volume mix between fields.~~higher production volumes.

Our segments apply the units-of-production method to the majority of assets, including capitalized asset retirement costs; therefore, volumes have an impact on DD&A expense. The following table provides DD&A expense and DD&A expense rates for each segment:

Three Months Ended June 30,
($ in millions; rate in $ per boe) 2022 2021 Increase (Decrease) 2022 2021 Increase (Decrease)
DD&A Expense and Rate Expense Rate
United States $ 415 $ 506 (18) % $ 16.11 $ 19.65 (18) %
International $ 16 $ 18 (11) % $ 2.80 $ 3.08 (9) %

~~Impairments~~ decreased $44 million in the second quarter of 2022. Impairments in 2021 consisted of a $24 million impairment as we decommissioned certain Eagle Ford central facilities and a $22 million impairment related to an increase in the estimated future decommissioning costs of certain non-producing wells, pipelines and production facilities for previously divested offshore assets located in the Gulf of Mexico. See ~~Note 10~~ ~~to the consolidated financial statements for discussion of the impairments in further detail.~~


	Three Months Ended June 30,
($ in millions; rate in $ per boe)	2023		2022		Increase (Decrease)		2023		2022		Increase (Decrease)
DD&A Expense and Rate	Expense						Rate
United States	$	547	$	415	32	%	$	16.88	$	16.11	5	%
International	$	10	$	16	(38)	%	$	2.42	$	2.80	(14)	%

~~Loss on early extinguishment of debt~~ ~~decreased $19 million~~2023 primarily due to ~~make-whole call provisions paid upon redemption~~a nonrecurring Eagle Ford severance tax refund of ~~$500~~$47 million ~~in senior unsecured notes~~related to prior years and lower sales revenue in the second quarter of ~~2021.~~2023, when compared to the same period in 2022.

~~Provision (benefit) for income taxes~~Net interest and other ~~reflects an effective income tax rate of 22%~~increased $38 million in the second quarter of ~~2022,~~2023 primarily as ~~compared to an effective income tax rate~~a result of ~~38% in the second quarter of 2021.~~increased interest expense associated with borrowings on our Term Loan Facility and Revolving Credit Facility. SeeNote 614 to the consolidated financial statements for ~~a more detailed discussion concerning the changes~~further information.

Provision for income taxes decreased $201 million in the ~~effective tax rate.~~second quarter of 2023 primarily due to a decrease in income before income taxes for the current quarter when compared to the same period in 2022.

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Segment Income

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~~See Note 5 to the consolidated financial statements for further details regarding items 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, goodwill and equity method investments, changes in our valuation allowance, unrealized gains or losses on commodity and interest rate derivative instruments, effects of pension settlements and curtailments or other items (as determined by the chief operating decision maker (“CODM”)) are not allocated to operating segments.

The following table reconciles segment income ~~(loss)~~ to net ~~income (loss):~~income:


		Three Months Ended June 30,				Three Months Ended June 30,
(In millions)	(In millions)	2022		2021			(In millions)	2023		2022
United States	United States	$	846	$	207		United States	$	365	$	846
International	International	160		68			International	30		160
Segment income (loss)		1,006		275
Segment income							Segment income	395		1,006
Items not allocated to segments, net of income taxes	Items not allocated to segments, net of income taxes	(40)		(259)			Items not allocated to segments, net of income taxes	(108)		(40)
Net income (loss)		$	966	$	16
Net income							Net income	$	287	$	966

United States segment income ~~(loss)~~ in the second quarter of ~~2022~~2023 was $~~846~~365 million of income versus a $207 million income for the same period in 2021. The increase in income was primarily due to higher price realizations and lower DD&A expenses. These favorable changes were partially offset by higher income taxes and production taxes in the second quarter of 2022.

~~International segment income (loss)~~ ~~in the second quarter of 2022 was$160 million of income versus $68~~$846 million of income for the same period in ~~2021,~~2022. The decrease in segment income is a result of the variances described above.

International segment income in the second quarter of 2023 was$30 million of income versus $160 million of income for the same period in 2022. The decrease was primarily due to ~~higher prices realized~~lower price realizations and lower net sales volume by our equity method investees.

Items not allocated to segments, net of income taxes in the second quarter of 2023 was a loss of $108 million versus a loss of $40 million for the same period in 2022. The increase was primarily due to unrealized net losses on commodity derivatives in the second quarter of 2023 versus unrealized net gains on commodity derivatives in the same period of 2022, as well higher interest expense as a result of outstanding borrowings on our Term Loan Facility and Revolving Credit Facility.

Results of Operations

Six Months Ended June 30, ~~2022~~2023 vs. Six Months Ended June 30, ~~2021~~2022

Revenues from contracts with customers are presented by segment in the table below:

Six Months Ended June 30,
(In millions) 2022 2021
Revenues from contracts with customers
United States $ 3,803 $ 2,321
International 126 110
Segment revenues from contracts with customers $ 3,929 $ 2,431


	Six Months Ended June 30,
(In millions)		2023		2022
Revenues from contracts with customers
United States		$	2,943	$	3,803
International		108		126
Segment revenues from contracts with customers		$	3,051	$	3,929

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Below is a price/volume analysis for each segment. Refer to Operations and Market Conditions for additional detail related to our net sales volumes and average price realizations.


				Increase (Decrease) Related to									Increase (Decrease) Related to
(In millions)	(In millions)	Six Months Ended June 30, 2021		Price Realizations		Net Sales Volumes		Six Months Ended June 30, 2022		(In millions)	Six Months Ended June 30, 2022		Price Realizations		Net Sales Volumes		Six Months Ended June 30, 2023
United States Price/Volume Analysis	United States Price/Volume Analysis									United States Price/Volume Analysis
Crude oil and condensate	Crude oil and condensate	$	1,727	$	1,202	$	(15)	$	2,914	Crude oil and condensate	$	2,914	$	(929)	$	395	$	2,380
Natural gas liquids	Natural gas liquids	247		173		35		455		Natural gas liquids	455		(269)		139		325
Natural gas	Natural gas	306		92		(19)		379		Natural gas	379		(317)		163		225
Other sales		41						55
Other sales(a)										Other sales(a)	55						13
Total	Total	$	2,321					$	3,803	Total	$	3,803					$	2,943
International Price/Volume Analysis	International Price/Volume Analysis									International Price/Volume Analysis
Crude oil and condensate	Crude oil and condensate	$	95	$	35	$	(19)	$	111	Crude oil and condensate	$	111	$	(25)	$	10	$	96
Natural gas liquids	Natural gas liquids	2		—		(1)		1		Natural gas liquids	1		—		—		1
Natural gas	Natural gas	12		—		—		12		Natural gas	12		—		(3)		9
Other sales	Other sales	1						2		Other sales	2						2
Total	Total	$	110					$	126	Total	$	126					$	108

(a)Includes revenue from commodity volumes purchased for resale.

Net gain (loss) on commodity derivativesin the first six months of ~~2022~~2023 was a ~~loss~~net gain of ~~$170~~$18 million, compared to a net loss of ~~$319~~$170 million for the same period in ~~2021.~~2022. We have ~~multiple crude oil, natural gas and NGL~~commodity derivative contracts that settle against ~~various indices.~~the NYMEX WTI and Henry Hub indexes. We record commodity derivative gains/losses as the index pricing and forward curves change each period. See Note 1312 to the consolidated financial statements for further information.

Income ~~(loss)~~ from equity method investments ~~increased $186~~decreased $177 million for the first six months of ~~2022. Our~~2023, primarily as a result of lower prices realized by our equity method investees ~~benefited from higher price realizations in~~during the first six months of ~~2022.~~2023.

Production expenses for the first six months of ~~2022~~2023 increased by ~~$69~~$99 million compared to the same period in ~~2021,~~2022, primarily as a result of our acquisition of the ~~U.S. segment’s higher project and workover activity~~Eagle Ford assets of Ensign in December 2022 and inflationary pressures ~~on labor, fuel, chemicals and services.~~when compared to the same period of 2022. In addition, in our International segment, production expenses were higher due to the April turnaround.

The following table provides production expense and production expense rates for each segment:


		Six Months Ended June 30,													Six Months Ended June 30,
($ in millions; rate in $ per boe)	($ in millions; rate in $ per boe)	2022		2021		Increase (Decrease)		2022		2021		Increase (Decrease)		($ in millions; rate in $ per boe)	2023		2022		Increase (Decrease)		2023		2022		Increase (Decrease)
Production Expense and Rate	Production Expense and Rate	Expense						Rate						Production Expense and Rate	Expense						Rate
United States	United States	$	291	$	224	30	%	$	5.70	$	4.43	29	%	United States	$	369	$	291	27	%	$	5.85	$	5.70	3	%
International	International	$	25	$	23	9	%	$	2.37	$	1.93	23	%	International	$	46	$	25	84	%	$	5.06	$	2.37	114	%

Shipping, handling and other operating expenses ~~increased~~decreased $5753 million in the first six months of 2022 from the comparable 2021 period. As disclosed in our Form 10-K, certain of our processing arrangements with midstream entities are percentage-of-proceeds contracts. We classify the proceeds retained by the midstream companies as shipping and handling cost. The increase in shipping and handling costs of these percentage-of-proceeds contracts coincides with the increase in realized natural gas liquids and natural gas prices. In addition, higher marketing costs contributed2023 when compared to the ~~increase as we purchased additional~~same period in 2022, primarily due to lower purchases of commodity volumes for resale to satisfy transportation ~~commitments.~~

~~Exploration expensesinclude unproved property impairments, dry well costs, geological and geophysical and other costs. The decrease~~commitments in ~~unproved property impairments is due~~2023 as compared to a combination of factors including timing of lease expiration dates and decisions not to develop acreage deemed non-core in 2021. We incurred less amortization expense related to insignificant unproved property lease balances in 2022.

~~The following table summarizes the components of exploration expenses:~~

Six Months Ended June 30,
(In millions) 2022 2021 Increase (Decrease)
Exploration Expenses
Unproved property impairments $ 14 $ 37 (62) %
Dry well costs — 2 (100) %
Geological and geophysical 1 3 (67) %
Other 4 4 — %
Total exploration expenses $ 19 $ 46 (59) %

Depreciation, depletion and amortization ~~decreased $169~~increased $220 million in the first six months of ~~2022~~2023 primarily as a result of ~~lower DD&A (expense per boe) rate impacted by field-level changes in reserves. In addition, the DD&A rate is impacted by capitalized costs and the sales volume mix between fields.~~higher production volumes.

Our segments apply the units-of-production method to the majority of their assets, including capitalized asset retirement costs; therefore volumes have an impact on DD&A expense. The following table provides DD&A expense and DD&A expense rates for each segment:

Six Months Ended June 30,
($ in millions; rate in $ per boe) 2022 2021 Increase (Decrease) 2022 2021 Increase (Decrease)
DD&A Expense and Rate Expense Rate
United States $ 819 $ 978 (16) % $ 16.06 $ 19.36 (17) %
International $ 31 $ 37 (16) % $ 2.80 $ 3.09 (9) %

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	Six Months Ended June 30,
($ in millions; rate in $ per boe)	2023		2022		Increase (Decrease)		2023		2022		Increase (Decrease)
DD&A Expense and Rate	Expense						Rate
United States	$	1,052	$	819	28	%	$	16.68	$	16.06	4	%
International	$	22	$	31	(29)	%	$	2.41	$	2.80	(14)	%

~~Impairments~~Net interest and other ~~decreased $45~~increased $98 million in the first six months of ~~2022.Impairments in 2021 consisted~~2023 primarily as a result of ~~a $24 million impairment as we decommissioned certain Eagle Ford central facilities~~increased interest expense associated with borrowings on our Term Loan Facility and a $22 million impairment related to an increase in the estimated future decommissioning costs of certain non-producing wells, pipelines and production facilities for previously divested offshore assets located in the Gulf of Mexico. See ~~Note 10~~ ~~to the consolidated financial statements for discussion of the impairments in further detail.~~Revolving Credit Facility.

Taxes other than income include production, severance and ad valorem taxes, primarily in the U.S., which tend to increase or decrease in relation to revenue and sales volumes. Taxes other than income ~~increased $96~~decreased $106 million primarily due to ~~higher price realizations in the U.S. segment~~lower sales revenue in the first six months of ~~2022.~~2023, as well as a nonrecurring Eagle Ford severance tax refund of $47 million related to prior years in the second quarter of 2023.

~~General and administrative expenses~~Provision (benefit) for income taxes ~~decreased $16 million~~reflects an effective income tax rate of 21% in the first six months of 2023. The tax benefit for income taxes in the first six months of 2022 ~~primarily due to expenses incurred in 2021 related to termination of an aircraft lease agreement.~~

~~Loss on early extinguishment of debt~~ ~~decreased $19 million due to make-whole call provisions paid upon redemption of $500 million in senior unsecured notes in 2021.~~

~~Provision (benefit) for income taxes~~ ~~for current year includes~~included a non-cash tax benefit of $685 million arising from the partial release of a valuation allowance on certain U.S. and state deferred tax ~~assets in first quarter of 2022. This was partially offset by the provision related to current year income earned by our operations.~~assets. See Note 6 to the consolidated financial statements for ~~a more detailed discussion concerning the rate changes.~~further information.

Segment Income

The following table reconciles segment income ~~(loss)~~ to net ~~income (loss):~~income:


		Six Months Ended June 30,					Six Months Ended June 30,
(In millions)	(In millions)	2022		2021		(In millions)	2023		2022
United States	United States	$	1,507	$	419	United States	$	790	$	1,507
International	International	275		118		International	119		275
Segment income (loss)		1,782		537
Segment income						Segment income	909		1,782
Items not allocated to segments, net of income taxes	Items not allocated to segments, net of income taxes	488		(424)		Items not allocated to segments, net of income taxes	(205)		488
Net income (loss)		$	2,270	$	113
Net income						Net income	$	704	$	2,270

United States segment income ~~(loss)~~ for the first six months of ~~2022~~2023 was ~~$1,507~~$790 million of income versus a ~~$419~~$1.5 billion of income for the same period in 2022. The decrease in segment income is a result of the variances described above.

International segment income for the first six months of 2023 was $119 million of income versus $275 million of income for the same period in ~~2021. This increase~~2022. The decrease was primarily due to ~~higher price realizations and~~ lower ~~DD&A expenses. These favorable changes were partially offset by higher income taxes and production taxes in the first six months of 2022.~~

~~International segment income (loss)~~ ~~for the first six months of 2022 was $275 million of income versus $118 million of income for the same period in 2021,primarily due to higher~~ prices realized by our equity method investees.

Items not allocated to segments, net of income taxes for the first six months of ~~2022~~2023 was $205 million of loss versus $488 million of income ~~versus a $424 million loss~~ for the same period in ~~2021.~~2022. The ~~increase~~change from income to loss was primarily due to the ~~first quarter 2022~~partial release of ~~the~~a valuation allowance on certain U.S. and state deferred tax assets ~~resulting~~in the first six months of 2022, which resulted in a non-cash deferred tax benefit of $685 million. In addition, we had increased interest expense as a result of outstanding borrowings on our Term Loan Facility and Revolving Credit Facility, partially offset by a decrease in unrealized net losses on commodity derivatives in the first six months of 2023.

Critical Accounting Estimates

~~Other than the item set forth below, there~~There have been no material changes or developments in the evaluation of the accounting estimates and the underlying assumptions or methodologies pertaining to our Critical Accounting Estimates disclosed in our Form 10-K for the year ended December 31, ~~2021.~~

~~Income Taxes~~

We have recorded deferred tax assets and liabilities, measured at enacted tax rates, for temporary differences between book basis and tax basis, tax credit carryforwards and operating loss carryforwards. In accordance with U.S. GAAP, we routinely assess the realizability of our deferred tax assets and reduce such assets to the expected realizable amount by a valuation allowance if it is more likely than not that some portion or all of the deferred tax assets will not be realized. In assessing the need for additional or adjustments to existing valuation allowances, we consider all available positive and negative evidence. Positive evidence includes reversals of temporary differences, forecasts of future taxable income, assessment of future business assumptions and applicable tax planning strategies that are prudent and feasible. Negative evidence includes losses in recent years as well as the forecasts of future losses in the realizable period. In making our assessment regarding valuation allowances, we weight the evidence based on objectivity.

We base our future taxable income estimates on projected financial information which we believe to be reasonably likely to occur. Numerous judgments and assumptions are inherent in the estimation of future taxable income, including factors such as future operating conditions and the assessment of the effects of foreign taxes on our U.S. federal income taxes. Future operating conditions can be affected by numerous factors, including (i) future crude oil and condensate, NGLs and natural gas prices, (ii) estimated quantities of crude oil and condensate, NGLs and natural gas, (iii) expected timing of production, and (iv) future capital requirements. An estimate of the sensitivity to changes in assumptions resulting in future taxable income calculations is not practicable, given the numerous assumptions that can materially affect our estimates. Unfavorable adjustments to some of the above listed assumptions would likely be offset by favorable adjustments in other assumptions. For example, the impact of sustained reduced commodity prices on future taxable income would likely be partially offset by lower capital expenditures.2022.

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Based on the assumptions and judgments described above, during the first quarter of 2022, we re-evaluated the realizability of U.S. and state deferred tax assets and determined that a valuation allowance against certain deferred tax assets was no longer necessary. As such, we recorded a non-cash deferred tax benefit in the first quarter of 2022 for $685 million. See ~~Note 6~~ ~~to the consolidated financial statements for further detail.~~

~~Accounting Standards Not Yet Adopted~~

~~See~~ ~~Note 2~~ ~~to the consolidated financial statements.~~

Cash Flows

Commodity prices are the most significant factor impacting our revenues, profitability, operating cash flows, the amount of capital we invest in our business, principal debt repayments, payment of dividends and funding of share repurchases. We generated significant positive cash flow from operations during the first six months of 2022 given the continued improvement in commodity prices. We continue to expect volatility in commodity prices and that could impact how much cash flow from operations we generate. The following table presents sources and uses of cash and cash equivalents:


		Six Months Ended June 30,					Six Months Ended June 30,
(In millions)	(In millions)	2022		2021		(In millions)	2023		2022
Sources of cash and cash equivalents	Sources of cash and cash equivalents					Sources of cash and cash equivalents
Operating activities		$	2,745	$	1,277

Disposal of assets, net of cash transferred to the buyer		4		15
Net cash provided by operating activities						Net cash provided by operating activities	$	1,941	$	2,745
Proceeds from revolving credit facility						Proceeds from revolving credit facility	980		—
Borrowings(a)						Borrowings(a)	200		—
Equity method investments - return of capital						Equity method investments - return of capital	34		7
Other	Other	33		6		Other	9		30
Total sources of cash and cash equivalents	Total sources of cash and cash equivalents	$	2,782	$	1,298	Total sources of cash and cash equivalents	$	3,164	$	2,782
Uses of cash and cash equivalents	Uses of cash and cash equivalents					Uses of cash and cash equivalents
Additions to property, plant and equipment	Additions to property, plant and equipment	$	(687)	$	(483)	Additions to property, plant and equipment	$	(1,166)	$	(687)

Debt repayment		(32)		(500)
Debt extinguishment costs		—		(19)
Repayments of revolving credit facility						Repayments of revolving credit facility	(980)		—
Debt repayment(a)						Debt repayment(a)	(270)		(32)

Shares repurchased under buyback programs	Shares repurchased under buyback programs	(1,352)		—		Shares repurchased under buyback programs	(706)		(1,352)
Dividends paid	Dividends paid	(108)		(55)		Dividends paid	(125)		(108)
Purchases of shares for tax withholding obligations	Purchases of shares for tax withholding obligations	(21)		(9)		Purchases of shares for tax withholding obligations	(30)		(21)
Other	Other	—		(4)		Other	(6)		—
Total uses of cash and cash equivalents	Total uses of cash and cash equivalents	$	(2,200)	$	(1,070)	Total uses of cash and cash equivalents	$	(3,283)	$	(2,200)

(a)Includes repayment and new borrowing associated with April 2023 remarketing to investors of $200 million sub-series 2017A-1 bonds. See Note 14 to the consolidated financial statements for further information.

Sources of cash and cash equivalents

Cash flows generated from operating activities during the second quarter of 2023 were 29% lower compared to 2022, primarily as a result of lower realized commodity prices, partially offset by higher volumes resulting from our acquisition of the Eagle Ford assets of Ensign in December 2022.

During the first six months of ~~2022 were significantly higher compared~~2023, we borrowed and repaid $980 million under our Revolving Credit Facility. See the Liquidity and Capital Resources section below for further information.

Uses of cash and cash equivalents

During the first six months of 2023, we repurchased approximately 29 million shares of our common stock pursuant to the ~~same period in 2021, primarily as~~share repurchase program at a ~~result~~cost of ~~higher realized commodity prices.~~$706 million, paid dividends of $125 million and repaid the $70 million 8.5% Senior Notes on the maturity date. Additionally, we repurchased $30 million of shares during the first six months of 2023 related to our tax withholding obligations associated with the vesting of employee restricted stock awards and restricted stock units; these repurchases do not impact our share repurchase program authorization.

The following table shows capital expenditures by segment and reconciles to additions to property, plant and equipment as presented in the consolidated statements of cash flows:


		Six Months Ended June 30,					Six Months Ended June 30,
(In millions)	(In millions)	2022		2021		(In millions)	2023		2022
United States	United States	$	718	$	467	United States	$	1,217	$	718
International	International	—		2		International	2		—
Corporate		5		4
Not Allocated to Segments (Corporate)						Not Allocated to Segments (Corporate)	5		5
Total capital expenditures (accrued)	Total capital expenditures (accrued)	723		473		Total capital expenditures (accrued)	1,224		723
Change in capital expenditure accrual	Change in capital expenditure accrual	(36)		10		Change in capital expenditure accrual	(58)		(36)
Total use of cash and cash equivalents for property, plant and equipment	Total use of cash and cash equivalents for property, plant and equipment	$	687	$	483	Total use of cash and cash equivalents for property, plant and equipment	$	1,166	$	687

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The increase in our capital expenditures for the U.S. segment in the first six months of ~~2022~~2023 compared to the same period in ~~2021~~2022 was largely ~~reflects~~driven by increased investment and drilling related to the Eagle Ford acreage we acquired from Ensign in December 2022. Additionally, inflationary pressures ~~driven by the significant increase in crude~~related to oil field services, labor, drilling materials and ~~natural gas prices,~~equipment, as well as ~~a drilling~~timing of capital spend and ~~completion program more heavily weighted~~increased activities in the first six months of 2023 compared to the ~~first half of~~same period in 2022, contributed to the ~~year.~~increase in capital expenditures.

Liquidity and Capital Resources

Capital Resources and Available Liquidity

Our main sources of liquidity are cash and cash equivalents, internally generated cash flow from operations, ~~sales of non-core assets,~~ capital market transactions and our ~~revolving~~Revolving Credit Facility. During the second quarter of 2023, we obtained ratings for our commercial paper from Moody’s, Standard & Poor’s and Fitch. Pursuant to our U.S. commercial paper program, we may issue unsecured notes in a maximum aggregate face amount of $2.5 billion outstanding at any time, with maturities up to 365 days from the date of issuance. Our $2.5 billion U.S. commercial paper program is backed by our $2.5 billion Revolving Credit Facility and can be used to fund short-term working capital requirements. We did not issue commercial paper during the second quarter of 2023. At June 30, ~~2022,~~2023, we had approximately ~~$4.3~~$2.3 billion of liquidity consisting of ~~$1.2 billion~~$215 million in cash and cash equivalents and ~~$3.1~~$2.1 billion available under our ~~revolving~~Revolving Credit Facility. On July 28, 2022, we executed the seventh amendment to our Credit Facility. The primary changes to the Credit Facility effected by this amendment were to (i) extend the maturity date of the Credit Facility by three years to July 28, 2027, (ii) decrease the size of the Credit Facility from $3.1 billion to $2.5 billion, (iii) replace the LIBOR interest rate benchmark with the secured overnight financing rate (“SOFR”) and (iv) implement certain revisions to the Pricing Schedule.

Our working capital requirements are supported by our cash and cash equivalents, U.S. commercial paper program and our Revolving Credit Facility. We may issue commercial paper, draw on our ~~revolving~~Revolving Credit Facility to meet short-term cash requirements or issue debt or equity securities through the shelf registration statement discussed below as part of our longer-term liquidity and capital management program. Because of the alternatives available to us as discussed above, we believe that our short-term and long-term liquidity are adequate to fund not only our current operations, but also our near-term and long-term funding requirements including our capital spending programs, defined benefit plan contributions, repayment of debt maturities, dividends and other amounts that may ultimately be paid in connection with contingencies. See Note 21 to the consolidated financial statements for further discussion of how our commitments and contingencies could affect our available liquidity. General economic conditions, commodity prices, and financial, business and other factors ~~including the global pandemic,~~ could affect our operations and our ability to access the capital markets.

We ~~continue to be rated~~maintain investment grade ratings at all three primary credit rating agencies. A downgrade in our credit ratings could increase our future cost of financing or limit our ability to access capital and could result in additional credit support requirements. We do not have any triggers on any of our corporate debt that would cause an event of default in the case of a downgrade of our credit ratings. See Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022 for a discussion of how a downgrade in our credit ratings could affect us.

We may incur additional debt in order to fund our working capital requirements, capital expenditures, acquisitions or development activities or for general corporate or other purposes. A higher level of indebtedness could increase the risk that our liquidity and financial flexibility deteriorates. See Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2022 for a further discussion of how our level of indebtedness could affect us.

Credit Arrangements and Borrowings

~~Our~~In November 2022, we entered into a two-year $1.5 billion Term Loan Facility and borrowed the full amount thereunder in December 2022. The Term Loan Facility can be prepaid without penalty.

As of June 30, 2023, we had net borrowings of $450 million against our $2.5 billion Revolving Credit Facility ~~includes~~and $5.9 billion of total long-term debt outstanding. Long-term debt due within one year consists of $131 million of 8.125% Senior Notes, which were repaid in connection with their maturity on July 17, 2023.

Both our Term Loan Facility and Revolving Credit Facility include a covenant requiring that our total debt to total capitalization ratio not exceed 65% as of the last day of the fiscal quarter. Our total debt-to-capital ratio was ~~19%~~26% at both June 30, ~~2022~~2023 and ~~20% at~~ December 31, ~~2021.~~2022. See Note 1514 to the consolidated financial statements for further information.

At June 30, 2022, we had no borrowings on our $3.1 billion Credit Facility and $4.0 billion of total long-term debt outstanding. In May 2022, we redeemed the $32 million 9.375% Senior Notes on the maturity date. Our next significant long-term debt maturity is in the amount of $1.0 billion due 2027. Refer to our ~~2021~~2022 Annual Report on Form 10-K for a listing of our long-term debt maturities.

~~Shelf Registration~~On April 3, 2023, we closed a $200 million remarketing to investors of sub-series 2017A-1 bonds that are part of the $1 billion St. John the Baptist, State of Louisiana revenue refunding bonds Series 2017. The bonds are subject to an interest rate of 4.05% and a mandatory purchase date of July 1, 2026.

Other sources of liquidity

We have aan effective universal shelf registration statement filed with the SEC ~~under~~pursuant to which we, as a “well-known seasoned issuer” for purposes of SEC rules, ~~have the ability~~subject to market conditions, are permitted to issue and sell an indeterminate

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amount of various types of debt, equity securities and ~~equity securities.~~other capital instruments, if and when necessary or perceived by us to be opportune, in one or more public offerings.

Capital Requirements

Share Repurchase Program

~~During the first six months of 2022, we repurchased approximately $1.4 billion of shares of our common stock. On May 4, 2022, our~~Our Board of Directors ~~increased our remaining~~has authorized a share repurchase ~~program~~program. Our remaining authorization ~~to $2.5 billion. The total remaining share repurchase authorization was approximately $2.0 billion~~ at June 30, 2022. Additionally, we repurchased $21 million of shares during the first six months of 2022 related to our tax withholding obligations associated with the vesting of employee restricted stock awards and restricted stock units; these repurchases do not impact our share repurchase program authorization.

~~Subsequent to the quarter, we repurchased~~2023 was approximately ~~$282 million of shares of our common stock through August 3, 2022.~~$1.8 billion.

Dividends

On July ~~27, 2022,~~26, 2023, our Board of Directors approved a dividend of ~~$0.08~~$0.10 per share payable September ~~12, 2022~~11, 2023 to stockholders of record at the close of business on August ~~17, 2022.~~16, 2023.

Income Taxes

As described in

Note 6

to the consolidated financial statements, the IRA was signed into law during 2022. Under current law and guidance, we do not anticipate being subject to the corporate book minimum tax in 2023. The U.S. Treasury is expected to publish further guidance and regulations that will be relevant to scoping considerations and the calculation of minimum income tax liabilities. As this guidance is issued, we will continue to evaluate and assess the impact the IRA may have on our current and future period income taxes. If we conclude that we do trigger the minimum income tax, we may have to make estimated tax payments.

Other Contractual Cash Obligations

As of June 30, ~~2022,~~2023, there are no material changes to our consolidated cash obligations to make future payments under existing contracts, as disclosed in our ~~2021~~2022 Annual Report on Form 10-K.

Environmental Matters and Other Contingencies

Other than the items set forth in Part II - Item 1. Legal Proceedings, there have been no significant changes to the environmental, health and safety matters under Item 1. Business or Item 3. Legal Proceedings in our ~~2021~~2022 Annual Report on Form 10-K. See Note 2221 to the consolidated financial statements for a description of other contingencies.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”). All statements, other than statements of historical fact, including without limitation statements regarding our future performance, business strategy, ~~2022~~ capital budget and allocations, reserve estimates, asset quality, production guidance, drilling plans, capital plans, future debt retirement, cost and expense estimates, asset acquisitions and dispositions, expected impacts of the IRA, tax assumptions and allowances, future financial position, statements regarding future commodity prices, anticipated benefits of the Ensign acquisition, and statements regarding management’s other plans and objectives for future operations, are forward-looking statements. Words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “future,” “guidance,” “intend,” “may,” “outlook,” “plan,” “positioned,” “project,” “seek,” “should,” “target,” “will,” “would” or similar words may be used to identify forward-looking statements; however, the absence of these words does not mean that the statements are not forward-looking. While we believe that our assumptions concerning future events are reasonable, athese expectations may not prove to be correct. A number of factors could cause results to differ materially from those ~~projected,~~indicated by such forward-looking statements including, but not limited to:

•conditions in the oil and gas industry, including supply and demand levels for crude oil and condensate, NGLs and natural gas and the resulting impact on price;

•changes in expected reserve or production levels;

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•changes in political ~~and~~or economic conditions in the U.S. and E.G., including changes in foreign currency exchange rates, interest rates, inflation rates and global and domestic market conditions;

•actions taken by the members of OPEC and Russia affecting the production and pricing of crude ~~oil;~~oil and other global and domestic political, economic or diplomatic developments;

•capital available for exploration and development;

•risks related to our hedging activities;

•voluntary ~~and~~or involuntary curtailments, delays or cancellations of certain drilling activities;

•well production timing;

•liabilities or corrective actions resulting from litigation, other proceedings and investigations or alleged violations of law or permits;

•~~capital available for exploration and development;~~

•~~the inability of any party to satisfy closing conditions or delays in execution with respect to our asset acquisitions and dispositions;~~

•drilling and operating risks;

•lack of, or disruption in, access to storage capacity, pipelines or other transportation methods;

•~~well production timing;~~

•availability of drilling rigs, materials and labor, including the costs associated therewith;

•difficulty in obtaining necessary approvals and permits;

•the availability, cost, terms and timing of issuance or execution of, competition for, and challenges to, mineral licenses and leases and governmental and other permits and rights-of-way, and our ability to retain mineral licenses and leases;

•non-performance by third parties of their contractual ~~or legal~~ obligations, including due to bankruptcy;

•administrative impediments or unexpected events that may impact dividends or other distributions, and the timing thereof, from our equity method investees;

•~~changes in our credit ratings;~~

•unforeseen hazards such as weather conditions, a health pandemic (including COVID-19), acts of war or terrorist acts and the governmental or military response thereto;

•~~shortages~~the impacts of ~~key personnel, including employees, contractors~~supply chain disruptions that began during the COVID-19 pandemic and ~~subcontractors;~~the resulting inflationary environment;

•security threats, including cybersecurity threats and disruptions to our business and operations from breaches of our information technology systems, or breaches of the information technology systems, facilities and infrastructure of third parties with which we transact business;

•~~changes in safety, health, environmental, tax~~our ability to achieve, reach or otherwise meet initiatives, plans or ambitions with respect to ESG matters;

•our ability to pay dividends and ~~other regulations~~make share repurchases;

•our ability to secure increased exposure to global LNG market prices;

•impacts of the IRA;

•the risk that the Ensign assets do not perform consistent with our expectations, including with respect to future production or ~~requirements or initiatives including those addressing the impact of global climate change, air emissions or water management;~~drilling inventory;

•other geological, operating and economic considerations; and

•the risk factors, forward-looking statements and challenges and uncertainties described in our ~~2021~~2022 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other filings with the SEC.

All forward-looking statements included in this report are based on information available to us on the date of this report. Except as required by law, we undertake no obligation to revise or update any forward-looking statements as a result of new information, future events or otherwise.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risks in the normal course of business including commodity price risk and interest rate risk. We employ various strategies, including the use of financial derivatives to manage the risks related to commodity price and interest rate fluctuations. See Note 1312 and Note 1413 to the consolidated financial statements for detail relating to our open commodity derivative positions, including underlying notional quantities, how they are reported in our consolidated financial statements and how their fair values are measured.

Commodity Price Risk

As of June 30, ~~2022,~~2023, we had ~~various~~ open commodity ~~derivatives.~~derivatives related to crude oil and natural gas. Based on the June 30, ~~2022~~2023 published NYMEX WTI and natural gas futures prices, a hypothetical 10% change (per bbl for crude oil and per MMBtu for natural gas) would change the fair values of our commodity derivative positions to the following:

(In millions) Fair Value at June 30, 2022 Hypothetical Price Increase of 10% Hypothetical Price Decrease of 10%
Derivative asset (liability) - Crude Oil $ (81) $ (119) $ (51)
Derivative asset (liability) - Natural Gas 2 (2) 7
Total $ (79) $ (121) $ (44)


(In millions)	Fair Value at June 30, 2023		Hypothetical Price Increase of 10%		Hypothetical Price Decrease of 10%
Derivative asset (liability) - Crude Oil	$	2	$	(1)	$	4
Derivative asset (liability) - Natural Gas	$	7	$	6	$	8

Total	$	9	$	5	$	12

Interest Rate Risk

At June 30, ~~2022,~~2023, our portfolio of current and long-term debt is comprised of floating rate debt and fixed-rate instruments. Our Term Loan Facility and Revolving Credit Facility are floating rate debt instruments, ~~with an~~which expose us to the risk of earnings or cash flow losses as the result of potential increases in market interest rates. At June 30, 2023, we had $2.0 billion outstanding ~~balance~~borrowings under floating rate debt instruments. Assuming no change in the amount of ~~$4.0 billion.~~floating rate debt outstanding, a hypothetical 100 basis point increase in the average interest rate under these borrowings would increase our annual interest expense by approximately $20 million. Actual results may vary due to changes in the amount of floating rate debt outstanding.

At June 30, 2023, we had $3.9 billion outstanding borrowings under fixed-rate debt instruments. Our sensitivity to interest rate movements and corresponding changes in the fair value of our fixed-rate debt portfolio affects our results of operations and cash flows only when we elect to repurchase or otherwise retire fixed-rate debt at prices different than carrying value.

At June 30, ~~2022,~~2023, we had forward starting interest rate swap agreements with a total notional amount of $295 million designated as cash flow hedges. We utilize cash flow hedges to manage our exposure to interest rate movements by utilizing interest rate swap agreements to hedge variations in cash flows related to the ~~1-month LIBOR~~SOFR interest component of future lease payments on our Houston office. A hypothetical 10% change in interest rates would change the fair values of our cash flow ~~hedge~~hedges to the following as of June 30, ~~2022:~~2023:


(In millions)	(In millions)	Fair Value at June 30, 2022		Hypothetical Interest Rate Increase of 10%		Hypothetical Interest Rate Decrease of 10%		(In millions)	Fair Value at June 30, 2023		Hypothetical Interest Rate Increase of 10%		Hypothetical Interest Rate Decrease of 10%
Interest rate asset (liability) - designated as cash flow hedges	Interest rate asset (liability) - designated as cash flow hedges	$	16	$	19	$	13	Interest rate asset (liability) - designated as cash flow hedges	$	24	$	28	$	21

Item 4. Controls and Procedures

An evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) was carried out under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer. As of the end of the period covered by this Report based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the design and operation of these disclosure controls and procedures were effective as of June 30, ~~2022.~~ 2023.

During the first six months of ~~2022,~~2023, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Part II – OTHER INFORMATION

Item 1. Legal Proceedings

~~In January 2020, we~~We have received ~~a Notice of Violation~~NOV’s from the EPA related to allegations of violations of the Clean Air ~~Act.~~Act with respect to our operations on the Fort Berthold Indian Reservation between 2015 and 2019. We continue to actively negotiate a draft consent decree with the EPA and Department of Justice containing certain proposed injunctive terms relating to this enforcement action. The resolution of the enforcement action will likely include monetary sanctions and implementation of both environmental mitigation projects and injunctive terms, which would increase both our development costs and operating costs. ~~Given the uncertainty in matters such~~We maintain an accrual for estimated future costs related to this matter regarding actions required to retrofit or replace existing equipment, which we expect to incur over multiple years. Our accrual does not include possible monetary sanctions or costs associated with mitigation projects as ~~these,~~ we are currently unable to ~~predict the ultimate outcome of this matter at this time. However,~~estimate those amounts. While we do not believe ~~these enforcement actions would~~resolution of this matter will have a material adverse effect on our ~~consolidated financial position, results~~business or operations, there exists substantial uncertainty as to the ultimate result of ~~operations~~this matter and it is reasonably possible the result could be materially different from our expectations and our accrual.

The Company received NOV’s from the EPA relating to alleged Clean Air Act violations following flyovers conducted in 2020 and 2022 over certain of the Company’s oil and gas facilities in New Mexico. The notices involve alleged emission and permitting violations. The Company has initiated discussions with the EPA to resolve these matters. As we are still investigating these allegations, we are unable to estimate the potential loss associated with these matters, however, it is reasonably possible that the resolution of these matters may result in a fine or ~~cash flows.~~penalty in excess of $300,000.

Other than the items set forth above, there have been no significant changes to Item 3. Legal Proceedings in our ~~2021~~2022 Annual Report on Form 10-K. See Note 2221 to the consolidated financial statements included in Part I, Item I for a description of such legal and administrative proceedings and Item 3. Legal Proceedings in our ~~2021~~2022 Annual Report on Form 10-K.

Item 1A. Risk Factors

We are subject to various risks and uncertainties in the course of our business. In addition to the other information set forth in this Quarterly Report on Form 10-Q, the reader should carefully consider the factors discussed in Item 1A. Risk Factors in our ~~2021~~2022 Annual Report on Form 10-K. ~~Other than the risk factor set forth below, there~~There have been no material changes or updates to the risk factors ~~from those listed in Item 1A. Risk Factors~~previously disclosed in our ~~2021~~2022 Annual Report on Form 10-K.

Our sector and the broader US economy have experienced higher than expected inflationary pressures in the first six months of 2022, related to continued supply chain disruptions, labor shortages and geopolitical instability. Should these conditions persist, it may impact our ability to procure materials and equipment on a cost-effective basis, or at all, and, as a result, our business, results of operations and cash flows could be materially and adversely affected.

Throughout the first six months of 2022, we have experienced significant increases in the costs of certain materials, including steel, sand and fuel, as a result of availability constraints, supply chain disruption, increased demand, labor shortages associated with a fully employed US labor force, inflation and other factors. Though we incorporated inflationary factors into our 2022 business plan, inflation has outpaced those original assumptions. These challenges are due in large measure to increased demand for oil and gas production driven by the continued economic recovery from the COVID-19 pandemic and more broadly, systemic underinvestment in global oil and gas development. These supply and demand fundamentals have been further aggravated by disruptions in global energy supply caused by multiple geopolitical events, including the ongoing conflict between Russia and Ukraine. We continue to undertake actions and implement plans to strengthen our supply chain to address these pressures and protect the requisite access to commodities and services. Nevertheless, we expect for the foreseeable future to experience supply chain constraints and inflationary pressure on our cost structure. These supply chain constraints and inflationary pressures will likely continue to adversely impact our operating costs and if we are unable to manage our global supply chain, it may impact our ability to procure materials and equipment in a timely and cost-effective manner, if at all, which could result in reduced margins and production delays and, as a result, our business, financial condition, results of operations and cash flows could be materially and adversely affected.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information about purchases by Marathon Oil, during the quarter ended June 30, ~~2022~~2023, of equity securities that are registered by Marathon Oil pursuant to Section 12 of the Securities Exchange Act of ~~1934:~~1934.

Period
Total Number of Shares Purchased(a)
Average Price Paid per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(b)
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs(b)
04/01/2022 - 04/30/2022 9,548,422 $ 25.66 9,548,422 $ 1,140,310,932
05/01/2022 - 05/31/2022 9,636,905 $ 26.69 9,636,905 $ 2,304,000,254
06/01/2022 - 06/30/2022 9,300,166 $ 27.66 9,299,310 $ 2,046,750,659
Total 28,485,493 $ 26.66 28,484,637


Period	Total Number of Shares Purchased(a)	Average Price Paid per Share(b)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(c)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs(b)(c)
04/01/2023 - 04/30/2023	3,811,086	$	24.93	3,811,086	$	2,041,000,432
05/01/2023 - 05/31/2023	5,853,037	$	22.98	5,853,037	$	1,906,501,938
06/01/2023 - 06/30/2023	6,173,567	$	22.96	6,173,567	$	1,764,769,042
Total	15,837,690	$	23.44	15,837,690

(a)~~856~~No shares of restricted stock were delivered by employees to Marathon Oil, upon vesting, to satisfy tax withholding requirements.

(b)Excludes 1% excise tax on share repurchases.

(c)Refer to our ~~2021~~2022 Annual Report on Form 10-K for historical share repurchase program authorizations and repurchase activity through December 31, ~~2021. In May 2022, our Board of Directors increased the authorization of repurchases under the program to $2.5 billion~~.2022. As of June 30, ~~2022,~~2023, we have ~~$2.0~~approximately $1.8 billion of authorization remaining under the share repurchase program. Purchases under the program are made at our discretion and may be in either open market transactions, including block purchases or in privately negotiated transactions using cash on hand, cash generated from operations or proceeds from potential asset sales. This program may be changed based upon our financial condition or changes in market conditions and is subject to termination prior to completion. Shares repurchased as of June 30, ~~2022~~2023, were held as treasury stock.

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Item 5. Other Information

During the three months ended June 30, 2023, no director or officer adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement, as each term is defined in Item 408(a) of Regulation S-K.

Item 6. Exhibits

~~The information required by this Item 6 is set forth in the Exhibit Index accompanying this Form 10-Q.~~

Incorporated by Reference
(File No. 001-05153, unless otherwise indicated)

Exhibit Number

Exhibit Description

Form

Exhibit

Filing Date

3.1

Restated Certificate of Incorporation of Marathon Oil Corporation

8-K

3.1

6/1/2018

3.2

Marathon Oil Corporation By-laws (amended and restated as of February 24, 2016)

10-Q

3.2

8/4/2016

3.3

Specimen of Common Stock Certificate

10-K

3.3

2/28/2014

4.1

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% of the total consolidated assets of Marathon Oil. Marathon Oil hereby agrees to furnish a copy of any such instrument to the SEC upon its request

10-K

4.2

2/28/2014

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

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

32.1**

Certification of President and Chief Executive Officer pursuant to 18 U.S.C. Section 1350

32.2**

Certification of Executive Vice President and Chief Financial Officer pursuant to 18 U.S.C. Section 1350

101.INS*

XBRL Instance Document - the XBRL Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH*

XBRL Taxonomy Extension Schema

101.CAL*

XBRL Taxonomy Extension Calculation Linkbase

101.DEF*

XBRL Taxonomy Extension Definition Linkbase

101.LAB*

XBRL Taxonomy Extension Label Linkbase

101.PRE*

XBRL Taxonomy Extension Presentation Linkbase

104*

Cover Page Interactive Data File, formatted in iXBRL and contained in Exhibit 101

Filed herewith.

Furnished herewith. This certification will be treated as “accompanying” this report and not “filed” as part of

such report for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of Section 18

of the Exchange Act.

†

Management contract or compensatory plan or arrangement.

4240

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


August ~~4, 2022~~3, 2023		MARATHON OIL CORPORATION

	By:	/s/ Rob L. White
		Rob L. White
		Vice President, Controller and Chief Accounting Officer
		(Duly Authorized Officer)

4341

~~Exhibit Index~~

Incorporated by Reference
(File No. 001-05153, unless otherwise indicated)
Exhibit Number Exhibit Description Form Exhibit Filing Date
3.1
Restated Certificate of Incorporation of Marathon Oil Corporation
8-K 3.1 6/1/2018
3.2
Marathon Oil Corporation By-laws (amended and restated as of February 24, 2016)
10-Q 3.2 8/4/2016
3.3
Specimen of Common Stock Certificate
10-K 3.3 2/28/2014
4.1
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% of the total consolidated assets of Marathon Oil. Marathon Oil hereby agrees to furnish a copy of any such instrument to the SEC upon its request
10-K 4.2 2/28/2014
10.1
Seventh Amendment, dated as of July 28 , 2022, to the Amended and Restated Credit Agreement dated as of May 28, 2014, as amended by the First Amendment, dated as of May 5, 2015, the Second Amendment, dated as of June 22, 2017, the Third Amendment, dated as of October 18, 2018, the Fourth Amendment, dated as of September 24, 2019, the Fifth Amendment, dated as of December 4, 2020 and the Sixth Amendment, dated as of June 21, 2021, and as supplemented by the Incremental Commitments Supplement, dated as of March 4, 2016 and Incremental Commitments Supplement, dated as of July 11, 2017, among Marathon Oil Corporation, as borrower, JPMorgan Chase Bank, N.A., as administrative agent, and certain other financial institutions named therein
8-K 10.1 8/2/2022
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
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
32.1*
Certification of President and Chief Executive Officer pursuant to 18 U.S.C. Section 1350
32.2*
Certification of Executive Vice President and Chief Financial Officer pursuant to 18 U.S.C. Section 1350
101.INS* XBRL Instance Document - the XBRL Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH* XBRL Taxonomy Extension Schema
101.CAL* XBRL Taxonomy Extension Calculation Linkbase
101.DEF* XBRL Taxonomy Extension Definition Linkbase
101.LAB* XBRL Taxonomy Extension Label Linkbase
101.PRE* XBRL Taxonomy Extension Presentation Linkbase
104*
Cover Page Interactive Data File, formatted in iXBRL and contained in Exhibit 101
* Filed herewith.


	June 30, 2022				December 31, 2021
Maturity Date	Aggregate Notional Amount (in millions)		Weighted Average, LIBOR		Aggregate Notional Amount (in millions)		Weighted Average, LIBOR

June 1, 2025	$	—	—	%	$	350	0.95	%
September 9, 2026	$	—	—	%	$	25	1.45	%


(In millions)	Ownership as of June 30, 2022	June 30, 2022		December 31, 2021
EGHoldings (a)	56%	$	226	$	148
Alba Plant LLC (b)	52%	166		154
AMPCO (c)	45%	136		148
Total		$	528	$	450


Period	Total Number of Shares Purchased(a)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(b)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs(b)
04/01/2022 - 04/30/2022	9,548,422	$	25.66	9,548,422	$	1,140,310,932
05/01/2022 - 05/31/2022	9,636,905	$	26.69	9,636,905	$	2,304,000,254
06/01/2022 - 06/30/2022	9,300,166	$	27.66	9,299,310	$	2,046,750,659
Total	28,485,493	$	26.66	28,484,637