UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


(Mark One)
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the Quarterly Period Ended	~~September 30, 2023~~March 31, 2024


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

Commission file number ~~1-1513~~1-5153

Marathon Oil Corporation

(Exact name of registrant as specified in its charter)


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

990 Town and Country Boulevard, Houston, Texas

77024-2217

(Address of principal executive offices)

(713) 629-6600

(Registrant’s telephone number, including area code)

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

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, par value $1.00

MRO

New York Stock Exchange

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

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

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

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

☐o

Emerging growth company

☐o

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 ~~585,247,358~~564,035,502 shares of Marathon Oil Corporation common stock outstanding as of ~~October 31, 2023.~~April 30, 2024.

MARATHON OIL CORPORATION

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

For certain industry specific terms used in this Form 10-Q, please see “Definitions” in our ~~2022~~2023 Annual Report on Form 10-K.


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

	4. Revenues	7
	5. Segment Information	98
	6. Income Taxes	1411
	7. Debt	~~7. Credit Losses~~11
	8. Derivatives	12
	9. Fair Value Measurements	14
	10~~8. Inventories~~	15
	9.. Property, Plant and Equipment	15

	~~10.~~1 1 . Asset Retirement Obligations	15
	~~11. Leases~~	16
	12. Equity Method Investments	~~12. Derivatives~~16
	1 3 . Stockholders' Equity	17
	1 4 . Incentive Based Compensation	~~13. Fair Value Measurements~~18



	15. Inventories	18


	1 6 . Supplemental Cash Flow Information	18
	17. Commitments and Contingencies	19
	~~14. Debt~~	21
	~~15. Stockholders' Equity~~	22
	~~16. Incentive Based Compensation~~	22
	~~17. Defined Benefit Postretirement Plans~~	23
	~~18. Reclassifications Out of Accumulated Other Comprehensive Income (Loss)~~	23
	~~19. Supplemental Cash Flow Information~~	24
	~~20. Equity Method Investments~~	24
	~~21. Commitments and Contingencies~~	25

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	2721
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4232
Item 4.	Controls and Procedures	4232


Part II - OTHER INFORMATION
Item 1.	Legal Proceedings	4333
Item 1A.	Risk Factors	4333
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4333
Item 5.	Other Information	4333
Item 6.	Exhibits	4434
	Signatures	4535

Table of Contents

Part I – FINANCIAL INFORMATION

Item 1. Financial Statements

MARATHON OIL CORPORATION

Consolidated Statements of Income (Unaudited)


		Three Months Ended				Nine Months Ended
		September 30,				September 30,
		Three Months Ended
		Three Months Ended
		Three Months Ended
		March 31,
		March 31,
		March 31,
(In millions, except per share data)
(In millions, except per share data)
(In millions, except per share data)	(In millions, except per share data)	2023		2022		2023		2022
Revenues and other income:	Revenues and other income:
Revenues and other income:
Revenues and other income:
Revenues from contracts with customers
Revenues from contracts with customers
Revenues from contracts with customers	Revenues from contracts with customers	$	1,771	$	2,008	$	4,822	$	5,937
Net gain (loss) on commodity derivatives	Net gain (loss) on commodity derivatives	1		41		19		(129)
Net gain (loss) on commodity derivatives
Net gain (loss) on commodity derivatives
Income from equity method investments
Income from equity method investments
Income from equity method investments	Income from equity method investments	38		190		140		469
Net gain on disposal of assets	Net gain on disposal of assets	1		2		6		1
Other income		2		6		19		25
Net gain on disposal of assets
Net gain on disposal of assets
Other income (expense)
Other income (expense)
Other income (expense)
Total revenues and other income
Total revenues and other income
Total revenues and other income	Total revenues and other income	1,813		2,247		5,006		6,303
Costs and expenses:	Costs and expenses:
Costs and expenses:
Costs and expenses:
Production	Production	192		193		607		509
Shipping, handling and other operating		164		199		487		575
Production
Production
Shipping, handling and other operating, including related party of $15 and $0
Shipping, handling and other operating, including related party of $15 and $0
Shipping, handling and other operating, including related party of $15 and $0
Exploration
Exploration
Exploration	Exploration	20		73		46		92
Depreciation, depletion and amortization	Depreciation, depletion and amortization	583		460		1,662		1,319
Impairments		—		2		—		4
Depreciation, depletion and amortization
Depreciation, depletion and amortization

Taxes other than income

Taxes other than income

Taxes other than income	Taxes other than income	113		137		251		381
General and administrative	General and administrative	72		79		225		220
General and administrative
General and administrative
Total costs and expenses
Total costs and expenses
Total costs and expenses	Total costs and expenses	1,144		1,143		3,278		3,100
Income from operations	Income from operations	669		1,104		1,728		3,203
Income from operations
Income from operations
Net interest and other	Net interest and other	(94)		(52)		(268)		(128)
Net interest and other
Net interest and other
Other net periodic benefit credits
Other net periodic benefit credits
Other net periodic benefit credits	Other net periodic benefit credits	5		5		11		14

Income before income taxes	Income before income taxes	580		1,057		1,471		3,089

Income before income taxes

Income before income taxes
Provision for income taxes
Provision for income taxes
Provision for income taxes	Provision for income taxes	127		240		314		2
Net income	Net income	$	453	$	817	$	1,157	$	3,087
Net income
Net income
Net income per share:
Net income per share:
Net income per share:	Net income per share:
Basic	Basic	$	0.75	$	1.22	$	1.88	$	4.40
Basic
Basic
Diluted
Diluted
Diluted	Diluted	$	0.75	$	1.22	$	1.88	$	4.39
Weighted average common shares outstanding:	Weighted average common shares outstanding:
Weighted average common shares outstanding:
Weighted average common shares outstanding:
Basic
Basic
Basic	Basic	603		670		615		701
Diluted	Diluted	604		672		616		703
Diluted
Diluted

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
		Three Months Ended
		Three Months Ended
		March 31,
		March 31,
		March 31,
(In millions)
(In millions)
(In millions)
Net income
Net income
Net income
Other comprehensive loss, net of tax
Other comprehensive loss, net of tax
Other comprehensive loss, net of tax

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
(In millions)		2023		2022		2023		2022
Net income		$	453	$	817	$	1,157	$	3,087
Other comprehensive income (loss), net of tax
Change in actuarial gain and other for postretirement and postemployment plans

Change in actuarial gain (loss) and other for postretirement and postemployment plans		(4)		(3)		(17)		(6)
Change in actuarial gain and other for postretirement and postemployment plans

Change in actuarial gain and other for postretirement and postemployment plans

Change in derivative hedges unrecognized gain

Change in derivative hedges unrecognized gain

Change in derivative hedges unrecognized gain	Change in derivative hedges unrecognized gain	—		7		1		23

Other		—		—		—		(1)
Other comprehensive income (loss)		(4)		4		(16)		16

Other comprehensive loss

Other comprehensive loss

Other comprehensive loss
Comprehensive income	Comprehensive income	$	449	$	821	$	1,141	$	3,103
Comprehensive income
Comprehensive income

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

Table of Contents

MARATHON OIL CORPORATION

Consolidated Balance Sheets (Unaudited)


		September 30,		December 31,
	March 31,							March 31,		December 31,
(In millions, except par value and share amounts)	(In millions, except par value and share amounts)	2023		2022		(In millions, except par value and share amounts)	2024		2023
Assets	Assets					Assets
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	174	$	334
Receivables, net	Receivables, net	1,434		1,146
Inventories	Inventories	174		125
Other current assets	Other current assets	66		66
Total current assets	Total current assets	1,848		1,671
Equity method investments	Equity method investments	421		577
Property, plant and equipment, net of accumulated depreciation, depletion and amortization of $25,377 and $23,876		17,411		17,377
Property, plant and equipment, net of accumulated depreciation, depletion and amortization of $26,420 and $25,914

Other noncurrent assets

Other noncurrent assets

Other noncurrent assets	Other noncurrent assets	239		315
Total assets	Total assets	$	19,919	$	19,940
Liabilities	Liabilities					Liabilities
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	1,582	$	1,279
Commercial paper	Commercial paper	450		—
Payroll and benefits payable	Payroll and benefits payable	67		90
Accrued taxes	Accrued taxes	128		171
Other current liabilities	Other current liabilities	279		364
Long-term debt due within one year	Long-term debt due within one year	400		402
Total current liabilities	Total current liabilities	2,906		2,306
Long-term debt	Long-term debt	4,876		5,521
Deferred tax liabilities	Deferred tax liabilities	386		167
Defined benefit postretirement plan obligations	Defined benefit postretirement plan obligations	94		100
Asset retirement obligations	Asset retirement obligations	308		295
Deferred credits and other liabilities	Deferred credits and other liabilities	123		154
Total liabilities	Total liabilities	8,693		8,543
Commitments and contingencies (Note 21)
Commitments and contingencies (Note 17)						Commitments and contingencies (Note 17)
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)	—		—
Common stock:	Common stock:					Common stock:
Issued – 937 million shares (par value $1 per share, 1.925 billion shares authorized at September 30, 2023 and December 31, 2022)		937		937
Held in treasury, at cost – 347 million shares and 304 million shares		(8,598)		(7,512)
Issued – 937 million shares (par value $1 per share, 1.925 billion shares authorized at March 31, 2024 and December 31, 2023)
Held in treasury, at cost – 369 million shares and 360 million shares
Additional paid-in capital	Additional paid-in capital	7,163		7,203
Retained earnings	Retained earnings	11,634		10,663
Accumulated other comprehensive income	Accumulated other comprehensive income	90		106
Total stockholders’ equity	Total stockholders’ equity	11,226		11,397
Total liabilities and stockholders’ equity	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)


		Nine Months Ended
		September 30,
	Three Months Ended								Three Months Ended
	March 31,								March 31,
(In millions)	(In millions)	2023		2022		(In millions)	2024	2023
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	$	1,157	$	3,087
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	1,662		1,319
Impairments		—		4

Exploratory dry well costs and unproved property impairments
Exploratory dry well costs and unproved property impairments
Exploratory dry well costs and unproved property impairments	Exploratory dry well costs and unproved property impairments	41		85
Net gain on disposal of assets	Net gain on disposal of assets	(6)		(1)

Deferred income taxes	Deferred income taxes	264		(137)
Unrealized loss on derivative instruments, net		8		4
Deferred income taxes
Deferred income taxes
Unrealized (gain) loss on derivative instruments, net

Pension and other post retirement benefits, net

Pension and other post retirement benefits, net

Pension and other post retirement benefits, net	Pension and other post retirement benefits, net	(27)		(28)
Stock-based compensation	Stock-based compensation	32		28
Equity method investments, net	Equity method investments, net	99		(130)
Changes in:	Changes in:					Changes in:
Current receivables	Current receivables	(298)		(221)
Inventories	Inventories	(51)		(27)
Current accounts payable and accrued liabilities	Current accounts payable and accrued liabilities	166		300
Other current assets and liabilities	Other current assets and liabilities	(17)		(57)
All other operating, net	All other operating, net	(23)		75
Net cash provided by operating activities	Net cash provided by operating activities	3,007		4,301
Investing activities:	Investing activities:					Investing activities:
Additions to property, plant and equipment		(1,659)		(1,117)
Capital expenditures
Change in capital accrual

Acquisitions, net of cash acquired	Acquisitions, net of cash acquired	(15)		2
Acquisitions, net of cash acquired
Acquisitions, net of cash acquired
Disposal of assets, net of cash transferred to the buyer	Disposal of assets, net of cash transferred to the buyer	(7)		8
Equity method investments - return of capital		57		12

All other investing, net
All other investing, net
All other investing, net
Net cash used in investing activities	Net cash used in investing activities	(1,624)		(1,095)
Financing activities:	Financing activities:					Financing activities:
Borrowings
Debt repayments
Proceeds from revolving credit facility	Proceeds from revolving credit facility	1,018		—
Repayments of revolving credit facility	Repayments of revolving credit facility	(1,468)		—
Proceeds from commercial paper borrowings, net		450		—
Borrowings		200		—
Debt repayments		(401)		(35)

Shares repurchased under buyback programs

Shares repurchased under buyback programs

Shares repurchased under buyback programs	Shares repurchased under buyback programs	(1,121)		(2,474)
Dividends paid	Dividends paid	(186)		(162)
Purchases of shares for tax withholding obligations		(31)		(21)
Withholding tax on stock-based incentive awards
All other financing, net	All other financing, net	(4)		15
Net cash used in financing activities	Net cash used in financing activities	(1,543)		(2,677)

Net increase (decrease) in cash and cash equivalents		(160)		529
Net decrease in cash and cash equivalents
Net decrease in cash and cash equivalents
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of period	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	$	174	$	1,109

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		Total Equity		(In millions)	Preferred Stock	Common Stock	Treasury Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income	Total Equity
Nine Months Ended September 30, 2022
December 31, 2021 Balance		$	—	$	937	$	(4,825)	$	7,221	$	7,271	$	82	$	10,686
Shares repurchased under buyback programs		—		—		(592)		—		—		—		(592)
Stock-based compensation		—		—		55		(43)		—		—		12
Net income		—		—		—		—		1,304		—		1,304
Other comprehensive income		—		—		—		—		—		8		8
Dividends paid (per share amount of $0.07)		—		—		—		—		(52)		—		(52)
March 31, 2022 Balance		$	—	$	937	$	(5,362)	$	7,178	$	8,523	$	90	$	11,366
Shares repurchased under buyback programs		—		—		(760)		—		—		—		(760)
Stock-based compensation		—		—		4		8		—		—		12
Net income		—		—		—		—		966		—		966
Other comprehensive income		—		—		—		—		—		4		4
Dividends paid (per share amount of $0.08)		—		—		—		—		(56)		—		(56)
June 30, 2022 Balance		$	—	$	937	$	(6,118)	$	7,186	$	9,433	$	94	$	11,532
Shares repurchased under buyback programs		—		—		(1,122)		—		—		—		(1,122)
Stock-based compensation		—		—		—		10		—		—		10
Net income		—		—		—		—		817		—		817
Other comprehensive income		—		—		—		—		—		4		4
Dividends paid (per share amount of $0.08)		—		—		—		—		(54)		—		(54)
September 30, 2022 Balance		$	—	$	937	$	(7,240)	$	7,196	$	10,196	$	98	$	11,187

Nine Months Ended September 30, 2023
Three Months Ended March 31, 2023
December 31, 2022 Balance
December 31, 2022 Balance
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

Three Months Ended March 31, 2024

Three Months Ended March 31, 2024

Three Months Ended March 31, 2024
December 31, 2023 Balance
December 31, 2023 Balance
December 31, 2023 Balance
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)		—		—		—		—		(62)		—		(62)
June 30, 2023 Balance		$	—	$	937	$	(8,188)	$	7,159	$	11,242	$	94	$	11,244
Shares repurchased under buyback programs		—		—		(415)		—		—		—		(415)
Excise tax on shares repurchased		—		—		(4)		—		—		—		(4)
Stock-based compensation		—		—		9		4		—		—		13
Net income		—		—		—		—		453		—		453
Other comprehensive loss		—		—		—		—		—		(4)		(4)
Dividends paid (per share amount of $0.10)		—		—		—		—		(61)		—		(61)
September 30, 2023 Balance		$	—	$	937	$	(8,598)	$	7,163	$	11,634	$	90	$	11,226
Dividends paid (per share amount of $0.11)
March 31, 2024 Balance

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

Table of Contents

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 ~~2022~~2023 Annual Report on Form 10-K. The results of operations for the ~~third~~first quarter ~~and first nine months~~ of ~~2023~~2024 are not necessarily indicative of the results to be expected for the full year.

2. Accounting Standards

Accounting Standards Updates Adopted

No accounting standards were adopted in the ~~third~~first quarter of ~~2023~~2024 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 and performance units in all periods, provided the effect is not antidilutive. The per share calculations below exclude 1 million of antidilutive stock options and performance units for both the three ~~and nine~~ months ended ~~September 30, 2023,~~March 31, 2024 and ~~1 million and 2 million of antidilutive stock options and performance units for the three and nine months ended September 30, 2022, respectively.~~2023:


		Three Months Ended September 30,				Nine Months Ended September 30,
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
(In millions, except per share data)	(In millions, except per share data)	2023		2022		2023		2022
(In millions, except per share data)
(In millions, except per share data)
Net income
Net income
Net income	Net income	$	453	$	817	$	1,157	$	3,087

Weighted average common shares outstanding	Weighted average common shares outstanding	603		670		615		701

Weighted average common shares outstanding

Weighted average common shares outstanding
Effect of dilutive securities
Effect of dilutive securities
Effect of dilutive securities	Effect of dilutive securities	1		2		1		2
Weighted average common shares, diluted	Weighted average common shares, diluted	604		672		616		703
Weighted average common shares, diluted
Weighted average common shares, diluted
Net income per share:
Net income per share:
Net income per share:	Net income per share:
Basic	Basic	$	0.75	$	1.22	$	1.88	$	4.40
Basic
Basic
Diluted
Diluted
Diluted	Diluted	$	0.75	$	1.22	$	1.88	$	4.39

Dividends per share	Dividends per share	$	0.10	$	0.08	$	0.30	$	0.23

Dividends per share

Dividends per share

4. Revenues

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

As of ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, receivables from contracts with customers, included in receivables, less reserves for credit losses, were ~~$1.1 billion~~$972 million and ~~$875~~$886 million, respectively.

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MARATHON OIL CORPORATION

Notes to Consolidated Financial Statements (Unaudited)

The following tables present our revenues from contracts with customers disaggregated by product type and geographic areas for the three ~~and nine~~ months ended ~~September 30:~~March 31:

United States


		Three Months Ended September 30, 2023
	Three Months Ended March 31, 2024																		Three Months Ended March 31, 2024
(In millions)	(In millions)	Eagle Ford		Bakken		Oklahoma		Permian		Other U.S.		Total		(In millions)	Eagle Ford	Bakken	Permian	Oklahoma		Other U.S.	Total
Crude oil and condensate	Crude oil and condensate	$	587	$	580	$	64	$	164	$	13	$	1,408
Natural gas liquids		80		47		30		20		—		177
NGLs
Natural gas	Natural gas	48		20		31		12		1		112
Other	Other	2		—		—		—		1		3
Revenues from contracts with customers	Revenues from contracts with customers	$	717	$	647	$	125	$	196	$	15	$	1,700

Three Months Ended September 30, 2022
(In millions) Eagle Ford Bakken Oklahoma Permian Other U.S. Total
Crude oil and condensate $ 523 $ 648 $ 104 $ 114 $ 39 $ 1,428
Natural gas liquids 49 82 63 16 6 216
Natural gas 56 67 105 22 11 261
Other 3 — — — 19 22
Revenues from contracts with customers $ 631 $ 797 $ 272 $ 152 $ 75 $ 1,927

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

Nine Months Ended September 30, 2022
(In millions) Eagle Ford Bakken Oklahoma Permian Other U.S. Total
Crude oil and condensate $ 1,526 $ 2,049 $ 341 $ 302 $ 124 $ 4,342
Natural gas liquids 148 263 191 46 23 671
Natural gas 145 156 256 55 28 640
Other 6 — — — 71 77
Revenues from contracts with customers $ 1,825 $ 2,468 $ 788 $ 403 $ 246 $ 5,730

~~Table of Contents~~

~~MARATHON OIL CORPORATION~~

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


	Three Months Ended March 31, 2023
(In millions)	Eagle Ford		Bakken		Permian		Oklahoma		Other U.S.		Total
Crude oil and condensate	$	495	$	431	$	170	$	78	$	11	$	1,185
NGLs	71		37		22		39		—		169
Natural gas	56		35		11		36		1		139
Other	2		—		—		—		8		10
Revenues from contracts with customers	$	624	$	503	$	203	$	153	$	20	$	1,503

International (E.G.)


		Three Months Ended September 30,				Nine Months Ended September 30,
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
(In millions)
(In millions)
(In millions)	(In millions)	2023		2022		2023		2022
Crude oil and condensate	Crude oil and condensate	$	64	$	75	$	160	$	186
Natural gas liquids		1		1		2		2
Natural gas		5		5		14		17
Crude oil and condensate
Crude oil and condensate
NGLs
NGLs
NGLs

Natural gas, sold as gas

Natural gas, sold as gas

Natural gas, sold as gas
Natural gas, sold as LNG
Natural gas, sold as LNG
Natural gas, sold as LNG
Natural gas, total
Natural gas, total
Natural gas, total
Other
Other
Other	Other	1		—		3		2
Revenues from contracts with customers	Revenues from contracts with customers	$	71	$	81	$	179	$	207
Revenues from contracts with customers
Revenues from contracts with customers

5. Segment Information

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

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

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

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MARATHON OIL CORPORATION

Notes to Consolidated Financial Statements (Unaudited)

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


	Three Months Ended March 31, 2024
(In millions)	U.S.		Int’l		Not Allocated to Segments			Total
Revenues from contracts with customers	$	1,422	$	116	$	—		$	1,538
Net loss on commodity derivatives	—		—		(24)		(b)	(24)
Income from equity method investments	—		39		—			39

Other income (expense)	(4)		1		1			(2)
Less costs and expenses:
Production	201		20		—			221
Shipping, handling and other operating, including related party	149		17		3			169
Exploration	7		—		—			7
Depreciation, depletion and amortization	500		10		14			524

Taxes other than income	96		—		—			96
General and administrative	38		3		45			86
Net interest and other	—		—		69			69
Other net periodic benefit costs	—		—		(3)			(3)

Income tax provision (benefit)	93		24		(32)			85
Segment income (loss)	$	334	$	82	$	(119)		$	297
Total assets	$	18,629	$	918	$	121		$	19,668
Capital expenditures(a)	$	598	$	1	$	4		$	603

(a)Includes accruals and excludes acquisitions.

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

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MARATHON OIL CORPORATION

Notes to Consolidated Financial Statements (Unaudited)

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

164
Exploration 8 1 11 (c) 20
Depreciation, depletion and amortization 570 12 1 583
Taxes other than income 112 — 1 113
General and administrative 32 3 37 72
Net interest and other — — 94 94
Other net periodic benefit costs — — (5)

(5)
Income tax provision (benefit) 145 11 (29) 127
Segment income (loss) $ 505 $ 62 $ (114) $ 453
Total assets $ 18,503 $ 1,072 $ 344 $ 19,919
Capital expenditures(a)
$ 444 $ 1 $ 4 $ 449

~~(a)Includes accruals and excludes acquisitions.~~

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

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

~~Table of Contents~~

~~MARATHON OIL CORPORATION~~

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


		Three Months Ended September 30, 2022										Three Months Ended March 31, 2023
(In millions)	(In millions)	U.S.		Int’l		Not Allocated to Segments			Total		(In millions)	U.S.	Int’l	Not Allocated to Segments	Total
Revenues from contracts with customers	Revenues from contracts with customers	$	1,927	$	81	$	—		$	2,008
Net gain (loss) on commodity derivatives		(26)		—		67		(b)	41
Net gain on commodity derivatives
Income from equity method investments	Income from equity method investments	—		190		—			190
Net gain on disposal of assets	Net gain on disposal of assets	—		—		2			2
Other income	Other income	4		1		1			6
Less costs and expenses:	Less costs and expenses:
Production	Production	173		20		—			193
Shipping, handling and other operating		171		5		23			199
Production
Production
Shipping, handling and other operating, including related party
Exploration	Exploration	11		—		62		(c)	73
Depreciation, depletion and amortization	Depreciation, depletion and amortization	441		14		5			460
Impairments		—		—		2			2

Taxes other than income
Taxes other than income
Taxes other than income	Taxes other than income	136		—		1			137
General and administrative	General and administrative	37		4		38			79
Net interest and other	Net interest and other	—		—		52			52
Other net periodic benefit costs	Other net periodic benefit costs	—		—		(5)			(5)

Income tax provision (benefit)	Income tax provision (benefit)	213		48		(21)			240
Income tax provision (benefit)
Income tax provision (benefit)
Segment income (loss)	Segment income (loss)	$	723	$	181	$	(87)		$	817
Total assets	Total assets	$	15,487	$	1,294	$	1,077		$	17,858
Capital expenditures(a)	Capital expenditures(a)	$	406	$	1	$	6		$	413

(a)Includes accruals and excludes acquisitions.

(b)Unrealized gain on commodity derivative instruments (See Note 12 8).

(c)Includes $10 million of dry well ~~costs and unproved property impairments of $48 million for Louisiana Austin Chalk exploration leases and $14 million for Permian unproved property leases.~~expense associated with wells in Permian.

~~Table of Contents~~

~~MARATHON OIL CORPORATION~~

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

Nine Months Ended September 30, 2023
(In millions) U.S. Int’l Not Allocated to Segments Total
Revenues from contracts with customers $ 4,643 $ 179 $ — $ 4,822
Net gain (loss) on commodity derivatives 27 — (8) (c) 19
Income from equity method investments — 140 — 140
Net gain on disposal of assets — — 6 6
Other income 12 5 2 19
Less costs and expenses:
Production 542 65 — 607
Shipping, handling and other operating 482 5 — 487
Exploration 19 1 26 (d) 46
Depreciation, depletion and amortization 1,622 34 6 1,662
Taxes other than income 252 (b) — (1) 251
General and administrative 98 9 118

225
Net interest and other — — 268

268
Other net periodic benefit costs — — (11) (11)
Income tax provision (benefit) 372 29 (87)

314
Segment income (loss) $ 1,295 $ 181 $ (319) $ 1,157
Total assets $ 18,503 $ 1,072 $ 344 $ 19,919
Capital expenditures(a)
$ 1,661 $ 3 $ 9 $ 1,673

~~(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~~No ~~te 12~~).

~~(d)Includes~~$10 ~~million of dry well expense associated with wells in Permian (See~~ ~~Note 9) and $11 million of unproved impairments related to Permian exploration leases.~~

~~Table of Contents~~

~~MARATHON OIL CORPORATION~~

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

Nine Months Ended September 30, 2022
(In millions) U.S. Int’l Not Allocated to Segments Total
Revenue from contracts with customers $ 5,730 $ 207 $ — $ 5,937
Net loss on commodity derivatives (125) — (4) (b) (129)
Income from equity method investments — 469 —

469
Net gain on disposal of assets — — 1 1
Other income 10 5 10 25
Less costs and expenses:
Production 464 45 — 509
Shipping, handling and other operating 508 15 52 575
Exploration 30 — 62 (c) 92
Depreciation, depletion and amortization 1,260 45 14 1,319
Impairments — — 4 4
Taxes other than income 374 — 7 381
General and administrative 94 10 116 220
Net interest and other — — 128 (d) 128
Other net periodic benefit credit — — (14)

(14)
Income tax provision (benefit) 655 110 (763) (e) 2
Segment income $ 2,230 $ 456 $ 401 $ 3,087
Total assets $ 15,487 $ 1,294 $ 1,077 $ 17,858
Capital expenditures(a)
$ 1,124 $ 1 $ 11 $ 1,136

~~(a)Includes accruals and excludes acquisitions.~~

~~(b)Unrealized loss on commodity derivative instruments (SeeNote 12~~).

~~(c)Includes dry well costs and unproved property impairments of $48 million for Louisiana exploration leases and $14 million for Permian exploration leases.~~

~~(d)Includes a $17 million gain on 2025 interest rate swaps (SeeNote 12~~).

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

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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 nine~~ months ended ~~September 30,~~March 31, 2024 and 2023, ~~and 2022,~~ our effective income tax rates were as follows:

Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 2023 2022
Effective income tax rate 22 % 23 % 21 % — %

•~~2022~~— Our effective income tax rate was different from our U.S. statutory tax rate of 21% for the nine months ended September 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.


	Three Months Ended March 31,
	2024		2023
Effective income tax rate	22	%	21	%

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~~are subject to the corporate book minimum tax in ~~2023 but anticipate that the corporate book minimum tax will apply in~~ 2024. The U.S. Department of the Treasury isand the IRS are expected to ~~publish~~release further regulations and interpretive guidance ~~and regulations that will be relevant to scoping considerations and~~implementing the ~~calculation of minimum income tax liabilities.~~legislation contained in the IRA. 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. 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 tax credits as a period cost when they arise.

7. 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. During the fourth quarter of 2023, we repaid $300 million of outstanding borrowings. On March 28, 2024, we fully repaid the $1.2 billion outstanding balance under our Term Loan Facility by utilizing the net proceeds received from the senior notes issued during the first quarter of 2024 (see Debt Issuance below).

Revolving Credit ~~Losses~~Facility

We have an unsecured revolving credit facility (“Revolving Credit Facility”) with a borrowing capacity of $2.6 billion. We have the option to increase the commitment amount by up to an additional $939 million, subject to the consent of any increasing lenders. The Revolving Credit Facility matures on July 28, 2027. At March 31, 2024, we had an immaterial outstanding balance under our Revolving Credit Facility.

The ~~majority~~Revolving Credit Facility includes a covenant requiring our total debt to total capitalization ratio not to exceed 65% as 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~~last day of each ~~reporting period,~~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 March 31, 2024, we ~~assess~~were in compliance with this covenant with a ratio of 25%.

Commercial Paper Program

Pursuant to our 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 ~~collectability~~date of issuance. Our $2.5 billion commercial paper program is backed by our ~~receivables and estimate the expected credit losses using historical data, current market conditions, reasonable and supportable forecasts~~$2.6 billion Revolving Credit Facility.

We utilize our commercial paper program to fund various short-term working capital requirements. As of ~~future economic conditions and other data as deemed appropriate.~~

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

(In millions) September 30, 2023 December 31, 2022
Beginning balance as of January 1 $ 10 $ 15
Current period provision 3 (3)
Current period write offs (2) (2)
Recoveries of amounts previously reserved (1) —
Ending balance $ 10 $ 10
March 31, 2024, we had $450 million of outstanding commercial paper maturing at various dates with a weighted average interest rate of 5.90%.

1411

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MARATHON OIL CORPORATION

Notes to Consolidated Financial Statements (Unaudited)

~~8. Inventories~~Debt issuance

~~Crude oil~~On March 28, 2024, we completed a public offering of $1.2 billion aggregate principal amount of unsecured senior notes consisting of $600 million aggregate principal amount of 5.30% senior notes due April 1, 2029 (“2029 Notes”) and ~~natural gas liquids are recorded~~$600 million aggregate principal amount of 5.70% senior notes due April 1, 2034 (“2034 Notes”). Interest on the senior notes is payable semi-annually beginning October 1, 2024. We may redeem some or all of the senior notes at ~~weighted average cost and carried~~any time at the ~~lower~~applicable redemption price, plus accrued interest, if any. Net proceeds received totaled $1.2 billion. Debt issuance costs 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) September 30, 2023 December 31, 2022
Crude oil and natural gas liquids $ 9 $ 15
Supplies and other items 165 110
Inventories $ 174 $ 125

~~9. Property, Plant and Equipment~~

(In millions) September 30, 2023 December 31, 2022
United States $ 17,098 $ 17,034
International 260 288
Corporate 53 55
Net property, plant and equipment $ 17,411 $ 17,377

~~As of September 30, 2023 and December 31, 2022, we had $10~~$12 million and $20 million, respectively, of 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. All of the suspended wells require completion activities in order to classify the reserves as ~~proved. The~~ ~~decrease~~ ~~during the nine months ended September 30, 2023 included a reduction in suspended well costs as we recorded~~ ~~$10 million of dry well expense associated with drilled and uncompleted exploratory wells in Permian.~~

~~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:

September 30,
(In millions) 2023 2022
Beginning balance as of January 1 $ 340 $ 316
Incurred liabilities, including acquisitions 4 10
Settled liabilities, including dispositions (27) (8)
Accretion expense (included in depreciation, depletion and amortization) 11 11
Revisions of estimates 12 (1)
Ending balance as of September 30, total $ 340 $ 328
Ending balance as of September 30, short-term $ 32 $ 45

~~Table of Contents~~

~~MARATHON OIL CORPORATION~~

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

~~11.~~ ~~Leases~~

~~Lessee~~

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

(In millions) Balance Sheet Location: September 30, 2023 December 31, 2022
ROU assets:
Operating leases Other noncurrent assets $ 93 $ 123
Finance leases Other noncurrent assets 20 24
Total ROU assets $ 113 $ 147
Lease liabilities:
Current liabilities
Operating leases Other current liabilities $ 63 $ 94
Finance leases Other current liabilities 7 6
Noncurrent liabilities
Operating leases Deferred credits and other liabilities 35 32
Finance leases Deferred credits and other liabilities 13 18
Total lease liabilities $ 118 $ 150

~~Operating Leases~~

We enter into various lease agreements to support our operations including drilling rigs, 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. During the nine months ended September 30, 2023 and 2022, we have made cash lease payments totaling approximately $16 million and $6 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 20. The lease was classified~~were recorded 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 incomedeferred financing costs within long-term debt in our consolidated ~~statements~~balance sheets and are being amortized to interest expense in our consolidated statement of income ~~for all periods presented.~~over the term of each note. The ~~undiscounted~~net proceeds, together with cash ~~flows~~on hand, were used to ~~be received~~repay $1.2 billion of outstanding borrowings under ~~this lease agreement are summarized below.~~our Term Loan Facility.

(In millions) Operating Lease Future Cash Receipts
2023 $ 2
2024 6
2025 6
2026 6
2027 6
Thereafter 42
Total undiscounted cash flows $ 68
Debt redemption

In March 2023, we redeemed the $70 million 8.5% Senior Notes in connection with their maturity date.

Long-term debt

At March 31, 2024, we had $5.0 billion of total long-term debt outstanding. Long-term debt due within one year consists of $200 million 2.10% of sub-series 2017A-2 bonds and $200 million 2.125% of sub-series 2017B-1 bonds, both of which feature a mandatory put on July 1, 2024.Refer to our 2023 Annual Report on Form 10-K for a listing of our long-term debt maturities.

~~Table of Contents~~8

. Derivatives

~~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 13 9. 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 their locations in our consolidated balance ~~sheets.~~sheets:


		September 30, 2023
	March 31, 2024
(In millions)
(In millions)
(In millions)	(In millions)	Asset		Liability		Net Asset (Liability)		Balance Sheet Location	Asset					Liability					Net Asset				Balance Sheet Location
Not Designated as Hedges	Not Designated as Hedges
Commodity
Commodity
Commodity	Commodity	$	3	$	—	$	3	Other current assets	$	1		$		$	1		$		$	—	Other current assets			Other current assets

Total Not Designated as Hedges	Total Not Designated as Hedges	$	3	$	—	$	3

Total Not Designated as Hedges

Total Not Designated as Hedges

Cash Flow Hedges	Cash Flow Hedges

Cash Flow Hedges

Cash Flow Hedges
Interest Rate
Interest Rate
Interest Rate	Interest Rate	$	10	$	—	$	10	Other current assets	$	9		$		$	—		$		$	9	Other current assets			Other current assets
Interest Rate	Interest Rate	15		—		15		Other noncurrent assets	Interest Rate		10		—			—		10			10	Other noncurrent assets			Other noncurrent assets

Total Designated Hedges	Total Designated Hedges	$	25	$	—	$	25

Total Designated Hedges

Total Designated Hedges
Total	Total	$	28	$	—	$	28
Total
Total


		December 31, 2022
		December 31, 2023
		December 31, 2023
		December 31, 2023
(In millions)
(In millions)
(In millions)	(In millions)	Asset		Liability		Net Asset (Liability)		Balance Sheet Location
Not Designated as Hedges	Not Designated as Hedges
Not Designated as Hedges
Not Designated as Hedges
Commodity
Commodity
Commodity	Commodity	$	10	$	—	$	10	Other current assets

Total Not Designated as Hedges	Total Not Designated as Hedges	$	10	$	—	$	10

Total Not Designated as Hedges

Total Not Designated as Hedges

Cash Flow Hedges

Cash Flow Hedges

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

Table of Contents

MARATHON OIL CORPORATION

Notes to Consolidated Financial Statements (Unaudited)

Derivatives Not Designated as Hedges

Commodity Derivatives

We have entered into crude oil ~~and natural gas~~ derivatives indexed to their respective indices as noted in the table below, related to a portion of our forecasted U.S. sales through ~~2023 and~~ 2024. These derivatives are three-way 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.

~~Table of Contents~~

~~MARATHON OIL CORPORATION~~

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

The following table sets forth outstanding derivative contracts as of ~~September 30, 2023,~~March 31, 2024, and the weighted average prices for those contracts:


		2023	2024
					Fourth Quarter		First Quarter			Second Quarter		Third Quarter		Fourth Quarter
				2024
				2024
				2024
									Second Quarter							Second Quarter	Third Quarter	Fourth Quarter
Crude Oil	Crude Oil
NYMEX WTI Three-Way Collars	NYMEX WTI Three-Way Collars
NYMEX WTI Three-Way Collars
NYMEX WTI Three-Way Collars
Volume (Bbls/day)
Volume (Bbls/day)
Volume (Bbls/day)	Volume (Bbls/day)				10,000		20,000			20,000		—		—
Weighted average price per Bbl:	Weighted average price per Bbl:
Ceiling
Ceiling
Ceiling	Ceiling				$	97.59	$	100.06		$	100.06	$	—	$	—
Floor	Floor				$	60.00	$	67.50		$	67.50	$	—	$	—
Sold put	Sold put				$	45.00	$	52.50		$	52.50	$	—	$	—

Natural Gas

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

The following table sets forth outstanding derivative contracts as of ~~October 31, 2023,~~April 30, 2024, with their weighted average prices, and is inclusive of activities that occurred subsequent to ~~September 30, 2023:~~March 31, 2024:


				2023	2024
						Fourth Quarter		First Quarter		Second Quarter		Third Quarter		Fourth Quarter
		2024
		2024
		2024														2025
			Second Quarter														Second Quarter	Third Quarter	Fourth Quarter	First Quarter	Second Quarter	Third Quarter	Fourth Quarter
Crude Oil	Crude Oil
NYMEX WTI Three-Way Collars	NYMEX WTI Three-Way Collars
NYMEX WTI Three-Way Collars
NYMEX WTI Three-Way Collars
Volume (Bbls/day)
Volume (Bbls/day)
Volume (Bbls/day)	Volume (Bbls/day)					10,000		40,000		40,000		20,000		20,000
Weighted average price per Bbl:	Weighted average price per Bbl:
Ceiling
Ceiling
Ceiling	Ceiling					$	97.59	$	101.01	$	101.01	$	101.95	$	101.95
Floor	Floor					$	60.00	$	66.25	$	66.25	$	65.00	$	65.00
Sold put	Sold put					$	45.00	$	51.25	$	51.25	$	50.00	$	50.00

Natural Gas	Natural Gas

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

Natural Gas

Natural Gas
Henry Hub Two-Way Collars
Henry Hub Two-Way Collars
Henry Hub Two-Way Collars
Volume (MMBtu/day)
Volume (MMBtu/day)
Volume (MMBtu/day)
Weighted average price per MMBtu:
Ceiling
Ceiling
Ceiling
Floor

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MARATHON OIL CORPORATION

Notes to Consolidated Financial Statements (Unaudited)

The unrealized gain (loss) 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.~~income:


		Three Months Ended September 30,				Nine Months Ended September 30,
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
(In millions)
(In millions)
(In millions)	(In millions)	2023		2022		2023		2022
Unrealized gain (loss) on derivative instruments, net	Unrealized gain (loss) on derivative instruments, net	$	(6)	$	67	$	(8)	$	(4)
Realized gain (loss) on derivative instruments, net(a)		$	7	$	(26)	$	27	$	(125)
Unrealized gain (loss) on derivative instruments, net
Unrealized gain (loss) on derivative instruments, net
Realized gain on derivative instruments, net(a)
Realized gain on derivative instruments, net(a)
Realized gain on derivative instruments, net(a)

(a)During the ~~third~~first quarter ~~and~~of 2024, we had no settled derivative positions. During the first ~~nine months~~quarter of 2023, net cash received for settled derivative positions was ~~$6 million and $23 million, respectively. During the third quarter and first nine months of 2022, net cash paid for settled derivative positions was $56 million and $145 million, respectively.~~$10 million.

~~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 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 nine months ended September 30, 2022, we recorded a cumulative $17 million gain within net interest and other within our consolidated statements of income related to these swaps.

Derivatives Designated as Cash Flow Hedges

During 2019, we entered into forward starting interest rate swaps with a maturity date of September 9, 2026 to hedge variations in cash flows related to the interest rate component of future lease payments of our Houston office. As of ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, the notional amount of open interest rate swaps for the Houston office was $295 million. The weighted average secured overnight financing rate (“SOFR”) for the swaps was 1.43% as of both ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022.~~2023.

The Houston office lease commenced in September 2021, however, our first cash lease payment for February 2022 rent was paid in March 2022. The first settlement date for the interest rate swaps was in January 2022. During the ~~nine~~three months ended ~~September 30, 2023,~~March 31, 2024, net cash received for the settled interest rate swap positions was $8$3 million. As of ~~September 30, 2023,~~March 31, 2024, we expect to reclassify a ~~$11~~$10 million gain from accumulated other comprehensive income into our consolidated statements of income over the next twelve months. ~~See~~ ~~Note 1~~1 ~~for further details regarding Houston office lease.~~

~~13.~~9. Fair Value Measurements

Fair Values – Recurring

The following tables present assets and liabilities accounted for at fair value on a recurring basis as of ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022~~2023 by hierarchy ~~level.~~level:

September 30, 2023

March 31, 2024

(In millions)

Level 1

Level 2

Level 3

Total

(In millions)

Level 1

Level 2

Level 3

Total

Derivative instruments, assets

Commodity(a)

—

Commodity(a)

Interest rate - designated as cash flow hedges

—

Interest rate - designated as cash flow hedges

Derivative instruments, assets

—

Derivative instruments, liabilities

Commodity(a)

Derivative instruments, liabilities

Total


	December 31, 2023
(In millions)	Level 1		Level 2		Level 3		Total
Derivative instruments, assets
Commodity(a)	$	—	$	24	$	—	$	24
Interest rate - designated as cash flow hedges	—		18		—		18
Derivative instruments, assets	$	—	$	42	$	—	$	42

(a)Derivative instruments are recorded on a net basis in our consolidated balance sheet. See Note 8.

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MARATHON OIL CORPORATION

Notes to Consolidated Financial Statements (Unaudited)

December 31, 2022
(In millions) Level 1 Level 2 Level 3 Total
Derivative instruments, assets
Commodity(a)
$ — $ 10 $ — $ 10
Interest rate - designated as cash flow hedges — 24 — 24
Derivative instruments, assets $ — $ 34 $ — $ 34

~~(a)Commodity derivative instruments are recorded on a net basis in our consolidated balance sheet. See~~ ~~Note 12~~.

As of ~~September 30, 2023,~~March 31, 2024, our commodity derivatives include three-way collars. These instruments are measured at fair value using either a Black-Scholes or a modified Black-Scholes Model. 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 12 8 for details on the forward starting interest rate swaps.

Fair Values – Financial Instruments

Our current assets and liabilities include financial instruments, the most significant of which are receivables, commercial paper borrowings, the current portion of our long-term debt and payables. We believe the carrying values of our receivables, commercial paper borrowings 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.

The following table summarizes financial instruments, excluding receivables, commercial paper borrowings, payables and derivative financial instruments, and their reported fair values by individual balance sheet line item at ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022.~~2023:


		September 30, 2023				December 31, 2022
	March 31, 2024												March 31, 2024		December 31, 2023
(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

Other noncurrent assets
Other noncurrent assets
Other noncurrent assets	Other noncurrent assets	$	9	$	27	$	10	$	28
Total financial assets	Total financial assets	$	9	$	27	$	10	$	28
Financial liabilities	Financial liabilities									Financial liabilities
Other current liabilities	Other current liabilities	$	132	$	198	$	140	$	204
Long-term debt, including current portion(a)	Long-term debt, including current portion(a)	5,126		5,297		5,806		5,948
Deferred credits and other liabilities	Deferred credits and other liabilities	45		45		73		73
Total financial liabilities	Total financial liabilities	$	5,303	$	5,540	$	6,019	$	6,225

(a)Excludes debt issuance costs.

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.

Our fixed rate debt instruments are publicly traded. The 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. Our floating rate debt is non-public and consists of borrowings under our ~~Term Loan Facility and~~ Revolving Credit Facility. The fair value of our floating rate debt approximates the carrying value and is estimated based on observable market-based inputs, which results in a Level 2 classification.

10. Property, Plant and Equipment


(In millions)	March 31, 2024		December 31, 2023
United States	$	17,004	$	16,905
International	243		252
Corporate	56		56
Net property, plant and equipment	$	17,303	$	17,213

As of March 31, 2024 and December 31, 2023, we had no exploratory well costs capitalized greater than one year related to suspended wells.

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MARATHON OIL CORPORATION

Notes to Consolidated Financial Statements (Unaudited)

~~14. Debt~~11. Asset Retirement Obligations

~~Term Loan Facility~~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:

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 September 30, 2023, we had $1.5 billion in borrowings under our Term Loan Facility. The third quarter weighted average interest rate on borrowings under the Term Loan Facility was 7.10%.


	March 31,
(In millions)	2024		2023
Beginning balance as of January 1	$	340	$	340
Incurred liabilities, including acquisitions	2		1
Settled liabilities, including dispositions	(2)		(9)
Accretion expense (included in depreciation, depletion and amortization)	4		4
Revisions of estimates	2		5

Ending balance as of March 31, total	$	346	$	341

Ending balance as of March 31, short-term	$	17	$	45

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 September 30, 2023, we were in compliance with this covenant with a ratio of 26%.

~~Subsequent to the quarter, we repaid $250 million of outstanding borrowings on October 31, 2023. We have $1.3 billion in borrowings remaining under our Term Loan Facility.~~

~~Revolving Credit Facility~~

In September 2023, we increased our $2.5 billion unsecured Revolving Credit Facility by $61 million to a total of $2.6 billion. Fees on the unused commitment of each lender, as well as the borrowing options under the Revolving Credit Facility, remain unaffected by the increase. We have the option to increase the commitment amount by up to an additional $939 million, subject to the consent of any increasing lenders. The Revolving Credit Facility maturity remains July 28, 2027.

During the third quarter of 2023, we utilized commercial paper borrowings to fully repay our outstanding borrowings against our $2.6 billion unsecured Revolving Credit Facility. The third quarter weighted average interest rate on borrowings under the Revolving Credit Facility was 6.82%.

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 September 30, 2023, we were in compliance with this covenant with a ratio of 26%.

~~Commercial Paper Program~~12. Equity Method Investments

During the ~~second quarter of~~periods ended March 31, 2024 and December 31, 2023, ~~we obtained ratings~~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 March 31, 2024	March 31, 2024		December 31, 2023
EG LNG (a)	56%	$	132	$	118
Alba Plant LLC (b)	52%	176		153
AMPCO (c)	45%	164		162
Total		$	472	$	433

(a)EG LNG 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 ~~our commercial paper~~equity method investees is as follows:


	Three Months Ended March 31,
(In millions)	2024		2023
Income data:
Revenues and other income	$	211	$	306
Income from operations	101		159
Net income	$	84	$	134

Revenues from ~~Moody’s, Standard & Poor’s~~related parties were $2 million for the three months ended March 31, 2024, which primarily related to Alba Plant LLC and ~~Fitch. Pursuant~~AMPCO. Revenues from related parties were $6 million for the three months ended March 31, 2023, with the majority related to ~~our commercial paper program, we may issue unsecured notes in~~EG LNG. As 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 commercial paper program is backed by our $2.6 billion Revolving Credit Facility.

~~During the third quarter of 2023, we utilized our recently established commercial paper program to fund various short-term working capital requirements.~~ ~~As of September 30, 2023, we had $450 million of outstanding commercial paper maturing at various dates. The third quarter weighted average interest rate for commercial paper borrowings was 6.19%.~~

~~Debt Redemption~~

~~On July 17, 2023, we repaid the $131 million 8.125% Senior Notes in connection with their maturity date.~~

~~On March 1, 2023, we repaid the $70 million 8.5% Senior Notes in connection with their maturity date.~~

~~Long-term debt~~

At September 30, 2023, we had $5.3 billion of total long-term debt outstanding. Long-term debt due within one year consists of $200 million 2.1% Bonds and $200 million 2.125% Bonds which feature a mandatory put on July 1, 2024. Refer to our 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~~result of the ~~$1 billion St. John~~agreement that took effect on January 1, 2024, related party shipping, handling and other operating expense presented on the ~~Baptist Parish, State~~face of ~~Louisiana revenue refunding bonds Series 2017. The bonds are subject~~the consolidated statements of income represents compensation to ~~an interest rate~~EG LNG for liquefaction, storage and product handling services.

Cash received from equity investees is classified as dividends or return of 4.05% and a mandatory purchase date of July 1, 2026. The repayments and new borrowings associated with the remarketed bonds are presented separately within Debt repayments and Borrowings, respectively, withincapital 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. Our equity investees did not distribute dividends or return of capital during the three months ended March 31, 2024 and 2023.

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MARATHON OIL CORPORATION

Notes to Consolidated Financial Statements (Unaudited)

~~15.~~Current receivables from related parties were $23 million and $24 million at March 31, 2024 and December 31, 2023, respectively, which primarily related to EG LNG and Alba Plant LLC in both periods. Payables to related parties were $24 million and $6 million at March 31, 2024 and December 31, 2023, respectively, with the majority related to EG LNG in both periods.

Related Party Lease Transaction

Our wholly owned subsidiary, MEGPL, is a lessor for residential housing in E.G., which is occupied by EG LNG. 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)	Operating Lease Future Cash Receipts
2024	$	5
2025	6
2026	6
2027	6
2028	6
Thereafter	35
Total undiscounted cash flows	$	64

13. Stockholders’ Equity

Our Board of Directors has authorized a share repurchase program. During the first ~~nine~~three months of ~~2023,~~2024, we repurchased ~~approximately 45~~11 million shares of our common stock pursuant to the share repurchase program at a cost of ~~$1.1 billion.~~$285 million. Our remaining share repurchase authorization was approximately ~~$1.4~~$2.0 billion at ~~September 30, 2023.~~March 31, 2024. Purchases under ~~the~~our repurchase 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 nine months of 2023 we repurchased $31 million of shares related to our tax withholding obligation associated with the vesting of stock-based compensation awards; these repurchases do not impact our share repurchase program authorization.

Subsequent to the quarter, we repurchased approximately ~~$145~~$110 million of shares of our common stock through ~~November~~May 1, ~~2023. Effective~~2024.

~~November 1, 2023, our Board~~Table of ~~Directors increased our remaining share repurchase program authorization~~Contents

MARATHON OIL CORPORATION

Notes to ~~$2.5 billion.~~Consolidated Financial Statements (Unaudited)

~~16.~~14. Incentive Based Compensation

Stock options ~~restricted stock~~ and restricted stock units

The following table presents a summary of activity for the first ~~nine~~three months of ~~2023:~~2024:


		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
Outstanding at December 31, 2022		1,678,524	$	28.86	4,651,196	$	14.89
	Number of Shares								Number of Shares	Weighted Average Exercise Price		Number of Shares & Units	Weighted Average Grant Date Fair Value
Outstanding at December 31, 2023
Granted	Granted	—	$	—	1,845,409	$	25.77
Exercised/Vested	Exercised/Vested	(184,028)	$	10.47	(2,729,366)	$	12.49
Canceled	Canceled	(374,431)	$	34.41	(159,450)	$	21.05
Outstanding at September 30, 2023		1,120,065	$	30.03	3,607,789	$	21.99
Outstanding at March 31, 2024

Stock-based performance unit awards

During the first ~~nine~~three months of ~~2023,~~2024, we granted ~~222,464~~248,572 stock-based performance units to eligible officers, which are settled in shares. The grant date fair value per unit was ~~$32.97.~~$28.21. During the first ~~nine~~three months of ~~2023,~~2024, we stock settled the units related to the ~~2020~~2021 grant. At ~~September 30, 2023,~~March 31, 2024, there were ~~686,266~~638,079 outstanding stock-based performance units to be settled in shares to officers.

During the first ~~nine~~three months of ~~2023,~~2024, we also granted ~~222,464~~248,572 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 one share of our common stock. The fair value of each cash-settled performance unit was ~~$27.05~~$28.45 as of ~~September 30, 2023.~~March 31, 2024. During the first ~~nine~~three months of ~~2023,~~2024, we also cash settled the units related to the ~~2021~~2022 grant. At ~~September 30, 2023,~~March 31, 2024, there were ~~389,507~~471,036 units outstanding of the stock-based performance unit awards to be settled in cash to officers.

15. Inventories

Crude oil, NGLs and natural gas, including LNG, 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)	March 31, 2024		December 31, 2023
Crude oil, NGLs and natural gas, including LNG	$	12	$	14
Supplies and other items	167		172
Inventories	$	179	$	186

16. Supplemental Cash Flow Information


	Three Months Ended March 31,
(In millions)	2024		2023
Included in operating activities:
Interest paid	$	73	$	85
Income taxes paid, net of refunds	$	8	$	6
Noncash investing activities:
Increase in asset retirement costs	$	4	$	6

Other noncash investing activities include accrued capital expenditures for the three months ended March 31, 2024 and 2023 of $203 million and $180 million, respectively.

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MARATHON OIL CORPORATION

Notes to Consolidated Financial Statements (Unaudited)

17. ~~Defined Benefit Postretirement Plans~~

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

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

Nine Months Ended September 30,
Pension Benefits Other Benefits
(In millions) 2023 2022 2023 2022
Service cost $ 11 $ 11 $ — $ —
Interest cost 8 5 2 2
Expected return on plan assets (7) (7) — —
Amortization:
– prior service credit (4) (4) (12) (12)
– actuarial loss — 1 1 1
Net settlement loss(a)
1 — — —
Net periodic benefit costs (credits)(b)
$ 9 $ 6 $ (9) $ (9)

~~(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 nine months of 2023, we made contributions of $19 million to our funded pension plan and we expect to make additional contributions of $4 million this year. We also made payments of $3 million and $5 million to our unfunded pension plan and other postretirement benefit plans, respectively.

~~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 September 30, Nine Months Ended September 30,
(In millions) 2023 2022 2023 2022 Income Statement Line
Postretirement and postemployment plans
Amortization of prior service credit $ 5 $ 5 $ 16 $ 16 Other net periodic benefit credits
Amortization of actuarial loss — — (1) (2) Other net periodic benefit credits
Net settlement loss — — (1) — Other net periodic benefit credits
Income Tax (1) (1) (3) (3) Provision (benefit) for income taxes
Total reclassifications of expense, net of tax $ 4 $ 4 $ 11 $ 11 Net income

~~Table of Contents~~

~~MARATHON OIL CORPORATION~~

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

~~19. Supplemental Cash Flow Information~~

Nine Months Ended September 30,
(In millions) 2023 2022
Included in operating activities:
Interest paid(a)
$ 251 $ 153
Income taxes paid, net of refunds $ 103 $ 128
Noncash investing activities:
Increase in asset retirement costs $ 16 $ 9

~~(a)~~The increase during the nine months ended September 30, 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.

~~Other noncash investing activities include accrued capital expenditures for the nine months ended September 30, 2023 and 2022 of $125 million and $99 million, respectively.~~

~~20. Equity Method Investments~~

During the periods ended September 30, 2023 and December 31, 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 September 30, 2023 September 30, 2023 December 31, 2022
EGHoldings (a)
56% $ 108 $ 287
Alba Plant LLC (b)
52% 160 155
AMPCO (c)
45% 153 135
Total $ 421 $ 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 September 30, Nine Months Ended September 30,
(In millions) 2023 2022 2023 2022
Income data:
Revenues and other income $ 200 $ 499 $ 689 $ 1,332
Income from operations 77 358 279 893
Net income $ 63 $ 335 $ 227 $ 811

Revenues from related parties were $6 million and $17 million for the three and nine months ended September 30, 2023 and $7 million and $22 million for the three and nine months ended September 30, 2022, respectively, with the majority related to EGHoldings in 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 $47 million and $296 million during the three and nine months ended September 30, 2023 and $150 million and $350 million during the three and nine months ended September 30, 2022, respectively.

Current receivables from related parties at September 30, 2023 were $24 million with the majority related to EGHoldings and $36 million at December 31, 2022 which primarily related to Alba Plant LLC and EGHoldings. Payables to related parties at September 30, 2023 and December 31, 2022 were $17 million and $20 million, respectively, with the majority related to Alba Plant LLC in both periods.

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~~MARATHON OIL CORPORATION~~

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

~~21.~~ Commitments and Contingencies

Various groups, including the State of North Dakota and the Mandan, Hidatsa and Arikara Nation or MHA Nation, also known as the Three Affiliated Tribes of the Fort Berthold Indian Reservation (the “Three Affiliated Tribes”) represented by the Bureau of Indian Affairs (the “BIA”), 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 ~~September 30, 2023,~~March 31, 2024, we have a ~~$168~~$123 million current liability in suspended royalty and working interest revenue, including interest, of which ~~$144~~$105 million was included within accounts payable and ~~$24~~$18 million related to accrued interest was included within other current liabilities on our consolidated balance sheet. Additionally, we have a long-term receivable of ~~$26~~$27 million for capital and expenses. To address a potential dispute with the Three Affiliated Tribes over the validity of certain of our leases, Marathon Oil has entered into an agreement pursuant to which we will pay an amount representing $50 million of the suspended royalties (inclusive of interest thereon) to the Three Affiliated Tribes. The agreement allows Marathon to recover all funds paid to the Three Affiliated Tribes (including by offsetting against production from other minerals leased to Marathon by the Three Affiliated Tribes) if a court ultimately determines that the Disputed Land is not held in trust for the Three Affiliated Tribes, but instead is owned by the State of North Dakota. The United States Department of the Interior (“DOI”) has addressed the United States’ position with respect to this dispute several times in recent years with conflicting opinions. In January 2017, the DOI issued an opinion that the Disputed Land is held in trust for the 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 (“~~2022~~ M-Opinion”) concluding that the Disputed Land is held in trust for the Three Affiliated Tribes. While the ~~2022~~ M-Opinion is binding on all agencies within the DOI, it is not legally binding on third parties, including Marathon Oil, the State of North Dakota, or a court. 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 was named in a lawsuit alleging improper royalty deductions in certain of our Oklahoma operations, and after plaintiffs lost their attempt to certify a class action, a settlement was reached, and in the first quarter of 2023 such settlement was approved by the court and paid.

We have received ~~Notice~~Notices of ~~Violations~~Violation (“~~NOV”~~NOVs”)’s from the EPA related to ~~allegations of~~alleged violations of the Clean Air 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. The resolution of the enforcement action will likely include monetary sanctions, for which we maintain an updated accrual as matters progress, and implementation of both environmental mitigation projects and injunctive terms, which would increase both our development costs and operating costs. ~~We maintain an accrual for estimated potential monetary sanctions. Through the date of this filing, there exists substantial~~There remains 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~~We have received ~~NOV’s~~NOVs from the EPA relating to alleged Clean Air Act violations following flyovers conducted in 2020 and 2022 over certain of ~~the Company’s~~our 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. At this time, we are unable to estimate the potential loss associated with these matters, however, it is reasonably possible that resolution of these matters may result in a fine or penalty in exexcess of~~cess of~~ $300,000.

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~~MARATHON OIL CORPORATION~~

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

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.

At ~~September 30, 2023,~~March 31, 2024, 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~~costs that might be incurred or the penalties that may be imposed.

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MARATHON OIL CORPORATION

Notes to Consolidated Financial Statements (Unaudited)

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 ~~September 30, 2023.~~March 31, 2024. 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

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~~ Permian in New Mexico and ~~Texas.~~Texas and STACK and SCOOP in Oklahoma. 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~~As shown in our 2023 Annual Report on Form 10-K, our Vision and ~~cash returns to shareholders, all of which~~Mission are ~~sustainable~~supported by our Foundation and ~~resilient through long-term commodity price cycles.~~Values. We expect to achieve our ~~business strategy~~Vision 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~~We allocate capital to prioritize shareholder returns and per share growth, exercise discipline in ~~our local communities~~reinvestment, retire outstanding debt 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.replenish inventory.

Below are certain key financial and operational highlights for the quarter:

Financial and operational results

•Our net income was ~~$453~~$297 million in the ~~third~~first quarter of ~~2023~~2024 as compared to net income of ~~$817~~$417 million in the same period last year. Included in our financial results for the current quarter:

◦~~Revenues~~Revenue from contracts with customers in our US segment declined $81 million in the first quarter of 2024 compared to the same period of 2023. The primary drivers of the decrease were lower gas and NGL prices and slightly lower sales volumes.

◦In our International segment, we sold our initial shipments of LNG with a global pricing linkage. We realized revenue of $51 million from LNG sales in the quarter, and ended the quarter with a positive LNG inventory balance that was included in our April sales. Refer to Operations for additional information.

◦Provision for income taxes decreased ~~$237~~$24 million compared to the same quarter last year as a result of lower ~~realized commodity prices, partially offset by increased sales. Lower realized commodity prices also resulted~~income before taxes. Our tax rate was largely consistent in ~~lower income from equity method investments, which decreased $152 million compared to the same quarter last year.~~each period.

◦~~Net sales volumes in the U.S. segment increased 25% compared to the same period last year, primarily driven by increased production from the acreage acquired from Ensign.~~

◦~~The increase in net sales volumes resulted in higher depreciation, depletion and amortization expense of $123 million as compared to the same quarter last year.~~

◦~~Our provision for income taxes decreased $113 million compared to the same quarter last year.~~

•Upon conclusion of the third quarter, we announced the signing of a 5-year firm LNG sales agreement for a portion of our equity gas from the Alba Field liquefied at EG LNG. The contract is effective January 1, 2024, and features a pricing structure linked to the Dutch Title Transfer Facility (TTF) index, providing us with significant incremental exposure to the European LNG market.

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Prioritized return of capital to investors and maintained investment grade balance sheet

•In the first ~~nine~~three months of ~~2023,~~2024, we successfully issued $600 million 5.30% 2029 Notes and $600 million 5.70% 2034 Notes. Net proceeds totaled $1.2 billion and were used to repay the $1.2 billion outstanding balance under our Term Loan Facility.

•In the first three months of 2024, we repurchased ~~$1.1 billion~~$285 million of shares through our share repurchase program. ~~In addition, effective November 1, 2023, our Board increased our remaining share repurchase authorization to $2.5 billion.~~

•As of ~~September 30, 2023,~~March 31, 2024, we have ~~$174~~$49 million of cash on hand and ~~$2.3~~$2.2 billion of total liquidity.

•We reduced our long-term debt, including the repayment at maturity of $70 million 8.5% Senior Notes on March 1, 2023 and $131 million 8.125% Senior Notes on July 17, 2023. In addition, subsequent to the quarter, we repaid $250 million of outstanding borrowings on our Term Loan Facility on October 31, 2023.

•During the first ~~nine~~three months of ~~2023,~~2024, we paid ~~$186~~$64 million of dividends, or ~~$0.30~~$0.11 per share, compared to dividends paid of ~~$0.23~~$0.10 per share during the first ~~nine~~three months of ~~2022. On October 25, 2023, our Board approved a 10% increase to our dividend payable to shareholders in the fourth quarter of 2023, to $0.11 per share.~~2023.

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

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Outlook

Capital Budget

In February ~~2023,~~2024, we announced a ~~2023~~2024 capital budget of $1.9 billion to ~~$2.0~~$2.1 billion that prioritizes free cash flow generation ~~over production growth,~~and meaningful return of capital to shareholders, consistent with our disciplined capital allocation framework. ~~Our expectation is our full year capital expenditures will be at the higher end~~The midpoint of our ~~range. Our~~oil production ~~targets~~guidance for 2023 include full year oil-equivalent production of 385 - 405 mboed, of which we are also trending towards the higher end of the range. We continue to monitor inflationary pressures given the labor market, commodity prices, supply chain challenges and geopolitical instability.2024 is 190 mbopd.

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.~~segments:


		Three Months Ended September 30,				Nine Months Ended September 30,
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
Net Sales Volumes
Net Sales Volumes
Net Sales Volumes	Net Sales Volumes	2023	2022	Increase (Decrease)		2023	2022	Increase (Decrease)
United States (mboed)	United States (mboed)	369	295	25	%	356	286	24	%
United States (mboed)
United States (mboed)
International (mboed)
International (mboed)
International (mboed)	International (mboed)	53	58	(9)	%	51	59	(14)	%
Total (mboed)	Total (mboed)	422	353	20	%	407	345	18	%
Total (mboed)
Total (mboed)

United States

The following tables provide additional details regarding net sales volumes, sales mix and operational drilling activity for our significant operations within this 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.segment:


		Three Months Ended September 30,				Nine Months Ended September 30,
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
Net Sales Volumes
Net Sales Volumes
Net Sales Volumes	Net Sales Volumes	2023	2022	Increase (Decrease)		2023	2022	Increase (Decrease)
Equivalent Barrels (mboed)	Equivalent Barrels (mboed)
Equivalent Barrels (mboed)
Equivalent Barrels (mboed)
Eagle Ford
Eagle Ford
Eagle Ford	Eagle Ford	158	90	76	%	153	85	80	%
Bakken	Bakken	121	118	3	%	108	116	(7)	%
Bakken
Bakken
Permian
Permian
Permian
Oklahoma	Oklahoma	46	54	(15)	%	50	54	(7)	%
Permian		42	24	75	%	43	21	105	%
Oklahoma
Oklahoma
Other United States
Other United States
Other United States	Other United States	2	9	(78)	%	2	10	(80)	%
Total United States	Total United States	369	295	25	%	356	286	24	%
Total United States
Total United States


	Three Months Ended March 31, 2024
Sales Mix - U.S. Resource Plays	Eagle Ford		Bakken		Permian		Oklahoma		Total
Crude oil and condensate	51	%	65	%	59	%	21	%	53	%
NGLs	24	%	20	%	21	%	29	%	23	%
Natural gas	25	%	15	%	20	%	50	%	24	%

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Three Months Ended September 30, 2023
Sales Mix - U.S. Resource Plays Eagle Ford Bakken Oklahoma Permian Total
Crude oil and condensate 51 % 64 % 19 % 52 % 51 %
Natural gas liquids 25 % 22 % 29 % 24 % 25 %
Natural gas 24 % 14 % 52 % 24 % 24 %


	Three Months Ended March 31,
Drilling Activity - U.S. Resource Plays (a)	2024	2023
Gross Operated
Eagle Ford:
Wells drilled to total depth	42	35
Wells brought to sales	27	36
Bakken:
Wells drilled to total depth	17	18
Wells brought to sales	18	17
Permian:
Wells drilled to total depth	8	8
Wells brought to sales	4	8
Oklahoma:
Wells drilled to total depth	3	1
Wells brought to sales	—	5

(a)Includes drilling activity operated under joint development agreements where we have a working interest in the well.

Three Months Ended September 30, Nine Months Ended September 30,
Drilling Activity - U.S. Resource Plays 2023 2022 2023 2022
Gross Operated
Eagle Ford:
Wells drilled to total depth 18 22 83 86
Wells brought to sales 38 48 123 95
Bakken:
Wells drilled to total depth 19 12 64 36
Wells brought to sales 25 9 65 49
Oklahoma:
Wells drilled to total depth 7 4 11 13
Wells brought to sales 4 — 9 19
Permian:
Wells drilled to total depth 5 6 19 12
Wells brought to sales 9 13 25 13
International

In our International segment, we own interests in multiple facilities in E.G. This includes a 64% operated working interest in the Alba field, located offshore E.G., which is consolidated in our financial statements on a pro rata basis. We also own interests in several facilities onshore E.G. which are accounted for as equity method investments. This includes a 52% interest in Alba Plant LLC, which operates a LPG processing plant; a 56% interest in EG LNG, which operates a 3.7 mmta LNG production facility; and a 45% interest in AMPCO, which operates a methanol plant. For additional information on our interests and their operations, refer to Items 1. and 2. Business and Properties in our 2023 Annual Report on Form 10-K.

As described in ~~International~~Market Conditions

~~Net~~, prior to 2024, we primarily sold natural gas to equity method investees via Gas Sales Agreements (GSA’s) in the form of feedstock for LNG and methanol production at long-term fixed prices. AMPCO markets methanol at market prices, and EG LNG marketed LNG on a market-based contract indexed to Henry Hub pricing. We also sell a certain amount of natural gas for local electricity generation at a long-term fixed price. Whereas the GSA with AMPCO continues into 2026, beginning January 1, 2024, the GSA to sell natural gas to EG LNG, and the contract for EG LNG to sell LNG indexed to Henry Hub pricing, expired and were replaced by a new series of agreements. The Alba field partners no longer sell natural gas under a GSA to EG LNG; instead, EG LNG earns a tolling fee to provide liquefaction, storage and product handling services as well as a profit share, and as an Alba partner, we now market our share of LNG to third parties indexed at global LNG prices. We also assume responsibility for shrink and plant losses during liquefaction, which results in lower reported net production and sales volumes, and we are subject to a lifting schedule for our equity LNG cargos which may place us in an underlift/overlift position depending on timing. In our consolidated statements of income, our sales of LNG to third parties is included in revenues from contracts with customers. The fees payable to EG LNG are recorded as related party shipping, handling and other operating expense, and our share of this income earned by EG LNG is included in income from equity method investments. In addition to servicing the Alba field, EG LNG processes additional third-party gas from the Alen field under a combination of a tolling fee and profit-sharing arrangement, the benefits of which are also included in our respective share of income from equity method investments.

In the first quarter of 2024, our initial sales of LNG under this new contract occurred. Our net sales volumes of LNG were ~~lower during~~78 mmcfd, at the ~~three~~average realized price of $7.21 per mcf. We recorded $51 million in revenue for these sales, and ~~nine months ended September 30, 2023 as compared~~incurred expense of $15 million to EG LNG for their services. We recorded $39 million in income from equity method investments in the quarter, and International segment income of $82 million. We also held a positive balance of LNG inventory at quarter end, that was included in our April sales.

In 2024, due to the ~~same period in~~expected arbitrage between LNG and methanol pricing, we have chosen to optimize our E.G. integrated gas operations by redirecting a portion of Alba field natural gas from AMPCO to the ~~prior year primarily due to natural decline.~~ LNG production facility operated by EG LNG.

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The ~~following~~ table below provides details regarding net sales volumes for our operations within this segment:


		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
Net Sales Volumes
Net Sales Volumes
Net Sales Volumes
		Three Months Ended September 30,				Nine Months Ended September 30,
Net Sales Volumes		2023	2022	Increase (Decrease)		2023	2022	Increase (Decrease)
Equivalent Barrels (mboed)
Equatorial Guinea		53	58	(9)	%	51	59	(14)	%
Crude and oil condensate (mbbld)

Crude and oil condensate (mbbld)

Crude and oil condensate (mbbld)
NGLs (mbbld)
NGLs (mbbld)
NGLs (mbbld)
Natural gas, sold as gas (mmcfd)
Natural gas, sold as gas (mmcfd)
Natural gas, sold as gas (mmcfd)
Natural gas, sold as LNG (mmcfd)
Natural gas, sold as LNG (mmcfd)
Natural gas, sold as LNG (mmcfd)
Total natural gas (mmcfd)
Total natural gas (mmcfd)
Total natural gas (mmcfd)
Total International (mboed)
Total International (mboed)
Total International (mboed)
Equity Method Investees
Equity Method Investees
Equity Method Investees	Equity Method Investees
LNG (mtd)(a)	LNG (mtd)(a)	1,670	2,536	(34)	%	1,831	2,872	(36)	%
LNG (mtd)(a)
LNG (mtd)(a)
Methanol (mtd)
Methanol (mtd)
Methanol (mtd)	Methanol (mtd)	1,208	956	26	%	1,210	967	25	%
Condensate and LPG (boed)	Condensate and LPG (boed)	8,264	7,060	17	%	7,896	8,113	(3)	%
Condensate and LPG (boed)
Condensate and LPG (boed)

(a)LNG sales from equity method investees in 2024 represents final residual volumes sold under the contract terms in place prior to January 1, 2024.

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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. Commodity prices experienced significant volatility in 2022 after the Russia/Ukraine conflict began and this has continued into ~~the third quarter of 2023.~~ 2024. ERussia’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 2022 / 2023 winter in both the U.S. and Europe has refilled gas inventories to multi year highs causing prices to fall back significantly. Recent eventsvents in the Middle East have added a further ~~geopolitical risk premium~~volatility to ~~oil~~energy prices and the outlook for that region remains extremely uncertain. Economic headwinds ~~caused by elevated~~should diminish moving forward as inflation appears to have peaked and interest rates ~~as central banks fight inflation, continue~~could fall later in 2024. However, the tailwind to ~~be a threat to~~annual energy demand growth ~~as we move~~from the post-COVID recovery has likely run its course and annual growth should be more in line with the long-term trend moving forward. PO~~rice volatility was also exacerbated by ongoing~~ngoing OPEC+ petroleum supply limitations and economic sanctions involving producer ~~countries. We~~countries continue to add uncertainty to the price outlook. We expect commodity price volatility to continue given the complex global dynamics of supply and demand that exist in the market. Refer to Item 1A. Risk Factors in our ~~2022~~2023 Annual Report on Form 10-K for further discussion on how volatility in commodity prices could impact us.

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 ~~third~~first quarter of 2024 and ~~first nine months of 2023 and 2022.~~2023:


		Three Months Ended September 30,						Nine Months Ended September 30,
		2023		2022		Increase (Decrease)		2023		2022		Increase (Decrease)
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
		2024
		2024
		2024
Average Price Realizations(a)	Average Price Realizations(a)
Crude oil and condensate (per bbl)(b)		$	80.90	$	93.67	(14)	%	$	76.13	$	99.28	(23)	%
Natural gas liquids (per bbl)		21.37		34.00		(37)	%	21.29		37.14		(43)	%
Natural gas (per mcf)(c)		2.28		7.84		(71)	%	2.38		6.52		(63)	%
Average Price Realizations(a)
Average Price Realizations(a)
Crude oil and condensate (per bbl)
Crude oil and condensate (per bbl)
Crude oil and condensate (per bbl)
NGLs (per bbl)
NGLs (per bbl)
NGLs (per bbl)
Natural gas (per mcf)
Natural gas (per mcf)
Natural gas (per mcf)
Benchmarks
Benchmarks
Benchmarks	Benchmarks
WTI crude oil average of daily prices (per bbl)	WTI crude oil average of daily prices (per bbl)	$	82.22	$	91.43	(10)	%	$	77.28	$	98.25	(21)	%
WTI crude oil average of daily prices (per bbl)
WTI crude oil average of daily prices (per bbl)
Magellan East Houston (“MEH”) crude oil average of daily prices (per bbl)	Magellan East Houston (“MEH”) crude oil average of daily prices (per bbl)	84.00		96.12		(13)	%	76.14		101.71		(25)	%
Mont Belvieu NGLs (per bbl)(d)		23.13		36.08		(36)	%	22.99		38.66		(41)	%
Magellan East Houston (“MEH”) crude oil average of daily prices (per bbl)
Magellan East Houston (“MEH”) crude oil average of daily prices (per bbl)
Mont Belvieu NGLs (per bbl)(b)
Mont Belvieu NGLs (per bbl)(b)
Mont Belvieu NGLs (per bbl)(b)
Henry Hub natural gas settlement date average (per mmbtu)	Henry Hub natural gas settlement date average (per mmbtu)	2.55		8.20		(69)	%	2.69		6.77		(60)	%
Henry Hub natural gas settlement date average (per mmbtu)
Henry Hub natural gas settlement date average (per mmbtu)

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

(b)Inclusion of realized gains (losses) on crude oil derivative instruments would have no impact on average price realizations for the third quarter 2023 and would have decreased average price realizations by $0.85 per bbl for the third quarter 2022. Inclusion of realized gains (losses) on crude oil derivative instruments would have no impact on average price realization for the first nine months of 2023 and would have decreased average price realizations by $2.39 per bbl for the first nine months of 2022.

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

~~(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~~NGLs – The majority of our sales volumes are sold at reference to Mont Belvieu prices.

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

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International (E.G.)

The following table presents our average price realizations and the related benchmark for crude oil and natural gas for the ~~third~~first quarter of 2024 and ~~first nine months of 2023 and 2022.~~2023:


		Three Months Ended September 30,						Nine Months Ended September 30,
		2023		2022		Increase (Decrease)		2023		2022		Increase (Decrease)
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
		2024
		2024
		2024
Average Price Realizations
Average Price Realizations
Average Price Realizations	Average Price Realizations
Crude oil and condensate (per bbl)	Crude oil and condensate (per bbl)	$	64.30	$	74.01	(13)	%	$	59.33	$	72.26	(18)	%
Natural gas liquids (per bbl)		1.00		1.00		—	%	1.00		1.00		—	%
Natural gas (per mcf)		0.24		0.24		—	%	0.24		0.24		—	%
Crude oil and condensate (per bbl)
Crude oil and condensate (per bbl)
NGLs (per bbl)
NGLs (per bbl)
NGLs (per bbl)
Natural gas, sold as gas (per mcf)
Natural gas, sold as gas (per mcf)
Natural gas, sold as gas (per mcf)
Natural gas, sold as LNG (per mcf)
Natural gas, sold as LNG (per mcf)
Natural gas, sold as LNG (per mcf)
Average total natural gas (per mcf)
Average total natural gas (per mcf)
Average total natural gas (per mcf)
Benchmark
Benchmark
Benchmark	Benchmark
Brent (Europe) crude oil (per bbl)(a)	Brent (Europe) crude oil (per bbl)(a)	$	86.66	$	100.71	(14)	%	$	82.05	$	104.85	(22)	%
Brent (Europe) crude oil (per bbl)(a)
Brent (Europe) crude oil (per bbl)(a)
TTF (Europe) natural gas (per mmbtu) (b)
TTF (Europe) natural gas (per mmbtu) (b)
TTF (Europe) natural gas (per mmbtu) (b)
JKM (East Asia) natural gas (per mmbtu) (c)
JKM (East Asia) natural gas (per mmbtu) (c)
JKM (East Asia) natural gas (per mmbtu) (c)

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

(b)Average of monthly prices obtained from NYMEX Exchange (expressed in $).

(c)Average of monthly prices obtained from Tokyo Commodity Exchange (expressed in $).

Crude oil and condensate – Alba field liquids production is primarily condensate. We generally sell 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 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.

~~Natural gas liquids~~NGLs – 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~~Prior to 2024, dry natural gas, processed by Alba Plant LLC on behalf of the Alba Unit Parties, iswas sold by the Alba field to our equity method investees EG LNG and AMPCO at fixed-price 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~~sold LNG on a market-based contract and AMPCO markets methanol at market prices. The gas sales contract between Alba Unit and EG LNG expired on December 31, 2023. The gas sales contract with AMPCO expires in 2026.

In March 2023, we announced the signing of a ~~HOA~~Heads of Agreement (“HOA”) to progress the development of the Equatorial Guinea Regional Gas Mega Hub. In October 2023, we announced the signing of a 5-year firm LNG sales agreement for a portion of our Alba gas liquefied at EG LNG. The contract iswas effective January 1, 2024, and features a pricing structure linked to the Dutch Title Transfer Facility ~~(TTF)~~(“TTF”) index, providing us with significant incremental exposure to the European LNG market. In addition, we have entered into an agreement to sell the remainder of our 2024 LNG volumes under a contract linked to the Japan/Korea Marker (“JKM”).

In addition to processing Alba Unit gas, Alba Plant LLC and EG LNG process 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.

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Table of Contents

Results of Operations

Three Months Ended ~~September 30, 2023~~March 31, 2024 vs. Three Months Ended ~~September 30, 2022~~March 31, 2023

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


		Three Months Ended September 30,					Three Months Ended March 31,
(In millions)	(In millions)	2023		2022		(In millions)	2024	2023
Revenues from contracts with customers	Revenues from contracts with customers
United States
United States
United States	United States	$	1,700	$	1,927
International	International	71		81
Segment revenues from contracts with customers	Segment revenues from contracts with customers	$	1,771	$	2,008

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)
(In millions)	(In millions)	Three Months Ended September 30, 2022			Price Realizations		Net Sales Volumes		Three Months Ended September 30, 2023			Three Months Ended March 31, 2023	Price Realizations	Net Sales Volumes	Three Months Ended March 31, 2024
United States Price/Volume Analysis	United States Price/Volume Analysis										United States Price/Volume Analysis
Crude oil and condensate	Crude oil and condensate	$	1,428		$	(223)	$	203	$	1,408
Natural gas liquids		216			(105)		66		177
NGLs
Natural gas	Natural gas	261			(276)		127		112
Other sales(a)	Other sales(a)	22							3
Total	Total	$	1,927						$	1,700
International Price/Volume Analysis	International Price/Volume Analysis										International Price/Volume Analysis
Crude oil and condensate	Crude oil and condensate	$	75		$	(10)	$	(1)	$	64
Natural gas liquids		1			—		—		1
NGLs
Natural gas, sold as gas
Natural gas, sold as LNG
Natural gas	Natural gas	5			—		—		5
Other sales	Other sales	—							1
Total	Total	$	81						$	71

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

Net gain (loss) on commodity derivatives in the ~~third~~first quarter of ~~2023~~2024 was $1an unrealized loss of $24 million, compared to ~~a net gain~~realized and unrealized gains of ~~$41~~$15 million for the same period in ~~2022.~~2023. We have commodity derivative contracts which settle against the NYMEX WTI ~~and Henry Hub indexes.~~index. We record commodity derivative gains/losses as the index pricing and forward curves change each period. See Note 12 8 to the consolidated financial statements for further information.

Income from equity method investments decreased ~~$152~~$41 million in the ~~third~~first quarter of ~~2023,~~2024, when compared to the ~~third~~first quarter of ~~2022,~~2023, primarily due to decreased sales volume as a result of the new agreement that became effective in January 2024, whereby EG LNG no longer markets LNG directly but instead processes LNG for a tolling fee and profit sharing, as well as lower prices realized by our equity method investees during the ~~third~~first quarter of ~~2023.~~2024.

Production expenses for the ~~third~~first quarter of ~~2023 decreased~~2024 increased by $1$20 million compared to the same period in ~~2022. In~~2023, primarily due to increased workover activities during the ~~Eagle Ford, production expenses increased when compared to the prior year as a result~~first quarter of ~~our acquisition~~2024.

Table of the Eagle Ford assets of Ensign in December 2022 and inflationary pressures. However, this increase was offset by decreased expenses in other areas as a result of less workover activity and expense projects when compared to the same period in 2022.Contents

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

Three Months Ended September 30,
($ in millions; rate in $ per boe) 2023 2022 Increase (Decrease) 2023 2022 Increase (Decrease)
Production Expense and Rate Expense Rate
United States $ 173 $ 173 — % $ 5.07 $ 6.40 (21) %
International $ 19 $ 20 (5) % $ 3.99 $ 3.55 12 %

~~Table of Contents~~

~~Shipping, handling and other operating expenses~~decreased $35 million in the third quarter of 2023 when compared to the same period in 2022, primarily due to lower legal costs and a decrease in purchases of commodity volumes for resale to satisfy transportation commitments as compared to the prior period, partially offset by an increase in shipping and handling costs due to increased volumes from our acquisition of the Eagle Ford assets of Ensign in December 2022.

~~Exploration expenses~~include unproved property impairments, dry well costs, geological and geophysical and other costs. The decrease in exploration expenses was primarily driven by lower impairments of unproved property leases and lower dry well costs in the third quarter of 2023 when compared the same period of 2022, primarily due to dry well costs and unproved property impairments in Louisiana Austin Chalk in the third quarter of 2022. See ~~Note 5~~ ~~to the consolidated financial statements for further information.~~

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

Three Months Ended September 30,
(In millions) 2023 2022 Increase (Decrease)
Exploration Expenses
Unproved property impairments $ 16 $ 45 (64) %
Dry well costs 2 26 (92) %
Geological, geophysical and other 2 2 — %
Total exploration expenses $ 20 $ 73 (73) %


	Three Months Ended March 31,
($ in millions; rate in $ per boe)	2024		2023		Increase (Decrease)		2024		2023		Increase (Decrease)
Production Expense and Rate	Expense						Rate
United States	$	201	$	178	13	%	$	6.77	$	5.82	16	%
International	$	20	$	23	(13)	%	$	5.13	$	4.54	13	%

Depreciation, depletion and amortization~~increased $123 million in the third quarter of 2023 primarily as a result of 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 September 30,
($ in millions; rate in $ per boe) 2023 2022 Increase (Decrease) 2023 2022 Increase (Decrease)
DD&A Expense and Rate Expense Rate
United States $ 570 $ 441 29 % $ 16.74 $ 16.20 3 %
International $ 12 $ 14 (14) % $ 2.39 $ 2.82 (15) %

~~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 decreased $24 million in the third quarter of 2023 primarily due to lower sales revenue in the third quarter of 2023, when compared to the same period in 2022.

~~Net interest and other~~ ~~increased $42 million in the third quarter of 2023 primarily as a result of increased interest expense associated with borrowings on our Term Loan Facility and Revolving Credit Facility.~~

~~Provision for income taxes~~ ~~decreased $113 million in the third 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.~~

~~Table of Contents~~

~~Segment Income~~

~~Segment income represents income that excludes certain items not allocated to our operating segments, net of income taxes. See~~ ~~Note 5~~ ~~to the consolidated financial statements for further details regarding items not allocated to the operating segments.~~

~~The following table reconciles segment income to net income:~~

Three Months Ended September 30,
(In millions) 2023 2022
United States $ 505 $ 723
International 62 181
Segment income 567 904
Items not allocated to segments, net of income taxes (114) (87)
Net income $ 453 $ 817

~~United States segment income~~ ~~in the third quarter of 2023 was$505 million of income versus $723 million of income for the same period in 2022. The decrease in segment income is a result of the variances described above.~~

~~International segment income~~ ~~in the third quarter of 2023 was$62 million of income versus $181 million of income for the same period in 2022. The decrease was primarily due to lower prices realized by our equity method investees.~~

~~Items not allocated to segments, net of income taxes~~ in the third quarter of 2023 was a loss of $114 million versus a loss of $87 million for the same period in 2022. The increase in loss was primarily due to unrealized net losses on commodity derivatives in the third quarter of 2023 versus unrealized net gains on commodity derivatives in the same period of 2022, partially offset by lower exploration expenses in 2023, as well as higher interest expense as a result of outstanding borrowings on our Term Loan Facility and Revolving Credit Facility.

~~Results of Operations~~

~~Nine Months Ended September 30, 2023 vs. Nine Months Ended September 30, 2022~~

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

Nine Months Ended September 30,
(In millions) 2023 2022
Revenues from contracts with customers
United States $ 4,643 $ 5,730
International 179 207
Segment revenues from contracts with customers $ 4,822 $ 5,937

~~Table of Contents~~

~~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
(In millions) Nine Months Ended September 30, 2022 Price Realizations Net Sales Volumes Nine Months Ended September 30, 2023
United States Price/Volume Analysis
Crude oil and condensate $ 4,342 $ (1,152) $ 598 $ 3,788
Natural gas liquids 671 (374) 205 502
Natural gas 640 (591) 288 337
Other sales(a)
77 16
Total $ 5,730 $ 4,643
International Price/Volume Analysis
Crude oil and condensate $ 186 $ (35) $ 9 $ 160
Natural gas liquids 2 — — 2
Natural gas 17 — (3) 14
Other sales 2 3
Total $ 207 $ 179

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

~~Net gain (loss) on commodity derivatives~~ in the first nine months of 2023 was a net gain of $19 million, compared to a net loss of $129 million for the same period in 2022. We have commodity derivative contracts that settle against 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 12~~ ~~to the consolidated financial statements for further information.~~

~~Income from equity method investmentsdecreased $329 million for the first nine months of 2023, primarily as a result of lower prices realized by our equity method investees during the first nine months of 2023.~~

~~Production expenses~~ for the first nine months of 2023 increased by $98 million compared to the same period in 2022, primarily as a result of our acquisition of the Eagle Ford assets of Ensign in December 2022 and inflationary pressures, when compared to the same period of 2022. In addition, in our International segment, production expenses were higher due to the triennial turnaround in April.

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

Nine Months Ended September 30,
($ in millions; rate in $ per boe) 2023 2022 Increase (Decrease) 2023 2022 Increase (Decrease)
Production Expense and Rate Expense Rate
United States $ 542 $ 464 17 % $ 5.58 $ 5.94 (6) %
International $ 65 $ 45 44 % $ 4.69 $ 2.76 70 %

~~Shipping, handling and other operating expenses~~ decreased $88 million in the first nine months of 2023, when compared to the same period in 2022, primarily due to a decrease in purchases of commodity volumes for resale to satisfy transportation commitments and lower legal costs as compared to the prior period, partially offset by an increase in shipping and handling costs due to increased volumes from our acquisition of the Eagle Ford assets of Ensign in December 2022.

~~Exploration expenses~~include unproved property impairments, dry well costs, geological and geophysical and other costs. The decrease in exploration expenses was primarily driven by lower impairments of unproved property leases and lower dry well costs in the first nine months of 2023, when compared to the same period in 2022, primarily due to dry well costs and unproved property impairments in Louisiana Austin Chalk in the first nine months of 2022. See ~~Note 5~~ ~~to the consolidated financial statements for further information.~~

~~Table of Contents~~

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

Nine Months Ended September 30,
(In millions) 2023 2022 Increase (Decrease)
Exploration Expenses
Unproved property impairments $ 29 $ 59 (51) %
Dry well costs 12 26 (54) %
Geological, geophysical and other 5 7 (29) %
Total exploration expenses $ 46 $ 92 (50) %

~~Depreciation, depletion and amortization~~ ~~increased $343 million in the first nine months of 2023 primarily as a result of 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:

Nine Months Ended September 30,
($ in millions; rate in $ per boe) 2023 2022 Increase (Decrease) 2023 2022 Increase (Decrease)
DD&A Expense and Rate Expense Rate
United States $ 1,622 $ 1,260 29 % $ 16.70 $ 16.11 4 %
International $ 34 $ 45 (24) % $ 2.40 $ 2.80 (14) %

~~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 decreased $130 million primarily due to lower sales revenue in the first nine months of 2023, as well as a nonrecurring Eagle Ford severance tax refund of $47 million related to prior years recorded in June 2023.

~~Net interest and other~~ ~~increased $140 million in the first nine months of 2023 primarily as a result of increased interest expense associated with borrowings on our Term Loan Facility and Revolving Credit Facility.~~


	Three Months Ended March 31,
($ in millions; rate in $ per boe)	2024		2023		Increase (Decrease)		2024		2023		Increase (Decrease)
DD&A Expense and Rate	Expense						Rate
United States	$	500	$	505	(1)	%	$	16.83	$	16.46	2	%
International	$	10	$	12	(17)	%	$	2.79	$	2.41	16	%

Provision for income taxes ~~reflects an effective income tax rate of 21%~~decreased $24 million in the first ~~nine months~~quarter of ~~2023. The provision for~~2024 primarily due to a decrease in income before income taxes infor the first nine months of 2022 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, which was fully offset by the provision related to income earned by our operations in the first nine months of 2022. See~~Note 6~~current quarter when compared to the ~~consolidated financial statements for further information.~~same period in 2023.

Segment Income

Segment income represents income that excludes certain items not allocated to our operating segments, net of income taxes. See Note 5 to the consolidated financial statements for further details regarding items not allocated to the operating segments.

The following table reconciles segment income to net income:




		Nine Months Ended September 30,				Three Months Ended March 31,
(In millions)	(In millions)	2023		2022
United States	United States	$	1,295	$	2,230
United States
United States
International
International
International	International	181		456
Segment income	Segment income	1,476		2,686
Segment income
Segment income
Items not allocated to segments, net of income taxes
Items not allocated to segments, net of income taxes
Items not allocated to segments, net of income taxes	Items not allocated to segments, net of income taxes	(319)		401
Net income	Net income	$	1,157	$	3,087
Net income
Net income

United States segment income ~~for~~in the first ~~nine months~~quarter of ~~2023~~2024 was ~~$1.3 billion~~$334 million of income versus ~~$2.2 billion~~$425 million of income for the same period in ~~2022.~~2023. The decrease in segment income is a result of the variances described above.

~~Table of Contents~~

International segment income ~~for~~in the first ~~nine months~~quarter of ~~2023~~2024 was ~~$181~~$82 million of income versus ~~$456~~$89 million of income for the same period in ~~2022.~~2023. The decreasewas primarily due to lower sales volume and lower prices realized by our equity method ~~investees.~~investees, partially offset by increased revenue from new LNG sales indexed to global prices.

Items not allocated to segments, net of income taxes ~~for~~in the first ~~nine months~~quarter of ~~2023~~2024 was a loss of ~~$319~~$119 million versus ~~$401~~a loss of $97 million ~~of income~~ for the same period in ~~2022.~~2023. The ~~change from income to~~increase in loss was primarily due to ~~the partial release of a valuation allowance~~unrealized net losses on ~~certain U.S. and state deferred tax assets~~commodity derivatives in the first ~~six months~~quarter of ~~2022, which resulted~~2024 versus unrealized net gains on commodity derivatives in ~~a non-cash deferred tax benefit~~the same period of ~~$685 million. In addition, in first nine months of 2023, our interest expense increased as a result of outstanding borrowings on our Term Loan Facility and Revolving Credit Facility.~~2023.

Critical Accounting Estimates

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, ~~2022.~~2023.

Table of Contents

Cash Flows

The following table presents sources and uses of cash and cash equivalents:

Nine Months Ended September 30,
(In millions) 2023 2022
Sources of cash and cash equivalents
Net cash provided by operating activities $ 3,007 $ 4,301
Proceeds from revolving credit facility 1,018 —
Proceeds from commercial paper borrowings, net 450 —
Borrowings(a)
200 —
Equity method investments - return of capital 57 12
Other — 23
Total sources of cash and cash equivalents $ 4,732 $ 4,336
Uses of cash and cash equivalents
Additions to property, plant and equipment $ (1,659) $ (1,117)
Repayments of revolving credit facility (1,468) —
Shares repurchased under buyback programs (1,121) (2,474)
Debt repayments(a)
(401) (35)
Dividends paid (186) (162)
Purchases of shares for tax withholding obligations (31) (21)
Acquisitions, net of cash acquired (15) 2
Other (11) —
Total uses of cash and cash equivalents $ (4,892) $ (3,807)

~~(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.~~


	Three Months Ended March 31,
(In millions)	2024		2023
Sources of cash and cash equivalents
Borrowings	$	1,200	$	—
Net cash provided by operating activities	757		865
Proceeds from revolving credit facility	50		175


Other	1		11
Total sources of cash and cash equivalents	$	2,008	$	1,051
Uses of cash and cash equivalents
Capital expenditures	$	(603)	$	(601)
Change in capital accrual	117		69

Debt repayments	(1,200)		(70)
Repayments of revolving credit facility	(43)		(175)
Shares repurchased under buyback programs	(285)		(334)

Dividends paid	(64)		(63)
Withholding tax on stock-based incentive awards	(18)		(30)
Other	(14)		(3)
Acquisition, net of cash acquired	(4)		—
Total uses of cash and cash equivalents	$	(2,114)	$	(1,207)

Sources of cash and cash equivalents

Cash flows generated from operating activities during the ~~third~~first quarter of ~~2023~~2024 were ~~30%~~12% lower compared to ~~2022,~~2023, primarily as a result of lower realized ~~commodity~~natural gas prices and sales volumes in our US segment, partially offset by ~~higher volumes resulting~~increased revenue from new LNG sales indexed to global prices in our ~~acquisition of the Eagle Ford assets of Ensign in December 2022.~~International segment.

~~During the first nine months~~On March 28, 2024, we completed a public offering of ~~2023, we borrowed $1.0~~$1.2 billion aggregate principal amount of unsecured senior notes (2029 Notes and 2034 Notes). Net proceeds received totaled $1.2 billion and ~~repaid $1.5~~were used to repay $1.2 billion outstanding borrowings under our ~~Revolving Credit~~Term Loan Facility. See ~~Additionally,~~Note 7and Liquidity and Capital Resources section below for further information.

We utilize our commercial paper program to fund our short term working capital requirements. As of March 31, 2024, we have net outstanding commercial paper borrowings of $450 million a~~s of September 30, 2023.~~. See ~~the~~ ~~Liquidity and Capital Resources~~ Note 7~~section below~~ for further information.

~~Table of Contents~~

Uses of cash and cash equivalents

During the first ~~nine~~three months of ~~2023,~~2024, we repurchased approximately 4511 million shares of our common stock pursuant to the share repurchase program at a cost of ~~$1.1 billion,~~$285 million and paid dividends of $186 million and repaid the $70 million 8.5% Senior Notes and $131 million 8.125% Senior Notes. Additionally, we repurchased $31 million of shares during the first nine months of 2023 related to our tax withholding obligations associated with the vesting of stock-based compensation awards; these repurchases do not impact our share repurchase program authorization.

~~During the third quarter of 2023, we utilized commercial paper borrowings to fully repay our $450 million outstanding borrowings against our $2.6 billion unsecured Revolving Credit Facility. See~~ ~~Note 14~~ ~~to the consolidated financial statements for further information.~~$64 million.

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


	Three Months Ended March 31,
(In millions)	2024		2023
United States	$	598	$	597
International	1		2
Not allocated to segments	4		2
Total capital expenditures	603		601

Table of ~~cash flows:~~Contents

Nine Months Ended September 30,
(In millions) 2023 2022
United States $ 1,661 $ 1,124
International 3 1
Not Allocated to Segments (Corporate) 9 11
Total capital expenditures (accrued) 1,673 1,136
Change in capital expenditure accrual (14) (19)
Total use of cash and cash equivalents for property, plant and equipment $ 1,659 $ 1,117

The increase in our capital expenditures for the U.S. segment in the first nine months of 2023 compared to the same period in 2022 was largely driven by increased investment and drilling related to the Eagle Ford acreage we acquired from Ensign in December 2022. Additionally, inflationary pressures related to oil field services, labor, drilling materials and equipment in the first nine months of 2023, compared to the same period in 2022, contributed to the 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, capital market transactions, ~~and~~ our Revolving Credit ~~Facility. During the second quarter of 2023, we obtained ratings for~~Facility and our commercial paper from Moody’s, Standard & Poor’s and Fitch. Pursuant to our 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 commercial paper program is backed by our $2.6 billion Revolving Credit Facility.program. At ~~September 30, 2023,~~March 31, 2024, we had approximately ~~$2.3~~$2.2 billion of liquidity consisting of ~~$174~~$49 million in cash and cash equivalents and $2.1 billion available under our Revolving Credit Facility.

Our working capital requirements are supported by our cash and cash equivalents, ~~commercial paper program and~~ our Revolving Credit ~~Facility.~~Facility and our commercial paper program. We may issue commercial paper, draw on our 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 17 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 could affect our operations and our ability to access the capital markets.

We 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, ~~2022~~2023 for a discussion of how a downgrade in our credit ratings could affect us.

~~Table of Contents~~

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~~2023 for a further discussion of how our level of indebtedness could affect us.

Credit Arrangements and ~~Borrowings~~Borrowing Developments

~~In November 2022,~~On March 28, 2024, we ~~entered into~~completed a ~~two-year $1.5~~public offering of $1.2 billion ~~Term Loan Facility~~aggregate principal amount of unsecured senior notes consisting of $600 million aggregate principal amount of 5.30% 2029 Notes and ~~borrowed~~$600 million aggregate principal amount of 5.70% 2034 Notes. Interest on the ~~full amount thereunder in December 2022. The Term Loan Facility can be prepaid without penalty. Subsequent~~senior notes is payable semi-annually beginning October 1, 2024. We may redeem some or all of the senior notes at any time at the applicable redemption price, plus accrued interest, if any. Net proceeds received totaled $1.2 billion which were used to ~~the quarter, we repaid $250 million of~~repay $1.2 billion outstanding borrowings ~~on October 31, 2023. We have $1.3 billion in borrowings remaining~~ under our Term Loan Facility. See Note 7 to the consolidated financial statements for further information.

As of ~~September 30, 2023,~~March 31, 2024, we had ~~$5.3~~$5.0 billion of total long-term debt outstanding. Long-term debt due within one year consists of $200 million ~~2.1% Bonds~~2.10% of sub-series 2017A-2 bonds and $200 million 2.125% ~~Bonds~~of sub-series 2017B-1 bonds, both of which feature a mandatory put on July 1, 2024. In addition, as of ~~September 30, 2023,~~March 31, 2024, we had outstanding commercial paper borrowings of $450 million.

~~Both~~As of March 31, 2024, we had an immaterial balance outstanding under our ~~Term Loan Facility and~~Revolving Credit Facility. Our Revolving Credit Facility ~~include~~includes 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 ~~26%~~25% at ~~both September 30, 2023 and December~~March 31, ~~2022.~~2024. See Note 14 7 to the consolidated financial statements for further information.

Refer to our ~~2022~~2023 Annual Report on Form 10-K for a listing of our long-term debt maturities.

~~On April 3, 2023, we closed a $200 million remarketing to investors~~Other Sources 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~~Liquidity

We have an effective universal shelf registration statement filed with the SEC pursuant to which we, as a “well-known seasoned issuer” for purposes of SEC rules, subject to market conditions, are permitted to issue and sell an indeterminate amount of various types of debt, equity securities and other capital instruments, if and when necessary or perceived by us to be opportune, in one or more public offerings.

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Capital Requirements

Share Repurchase Program

Our Board of Directors has authorized a share repurchase program. Our remaining authorization at ~~September 30, 2023~~March 31, 2024 was approximately ~~$1.4~~$2.0 billion.

Subsequent to the quarter, we repurchased approximately $110 million of shares of our ~~Board of Directors increased our remaining authorization to~~ ~~$2.5 billion effective on November~~common stock through May 1, ~~2023.~~2024.

Dividends

On ~~October 25, 2023,~~April 24, 2024, our Board of Directors approved a dividend of $0.11 per share payable ~~December 11, 2023~~June 10, 2024 to stockholders of record at the close of business on ~~November~~May 15, ~~2023.~~2024.

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~~are subject to the corporate book minimum tax in ~~2023 but anticipate that corporate book minimum tax will apply in~~ 2024. The U.S. Department of the Treasury isand the IRS are expected to ~~publish~~release further regulations and interpretive guidance ~~and regulations that will be relevant to scoping considerations and~~implementing the ~~calculation of minimum income tax liabilities.~~legislation contained in the IRA. 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.

Other Contractual Cash Obligations

As of ~~September 30, 2023,~~March 31, 2024, material changes to our contractual cash obligations compared to December 31, ~~2022~~2023 include ~~the previously discussed repayment of $450 million outstanding borrowings against our $2.6 billion unsecured Revolving Credit Facility, which was due in 2027, and~~ the addition of ~~commercial paper borrowings~~$1.2 billion senior notes issued during the first quarter of ~~$450 million. In addition, we repaid$250 million~~2024 and the full repayment of $1.2 billion outstanding borrowings ~~against~~under our ~~$1.5 billion~~ Term Loan Facility ~~on October 31, 2023.~~during the same period.

Other than the items set forth above, there are no material changes to our consolidated cash obligations to make future payments under existing contracts, as disclosed in our ~~2022~~2023 Annual Report on Form 10-K.

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Environmental Matters and Other Contingencies

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~~of 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.

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 ~~2022~~2023 Annual Report on Form 10-K. See Note 21 17 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, 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, expectations with respect to the consent decree with the EPA and Department of Justice and statements regarding management’s other plans and objectives for future operations, are forward-looking statements. ~~Words~~In addition, many forward-looking statements may be identified by the use of forward-looking terminology such as ~~“anticipate,~~“anticipates,” ~~“believe,~~“believes,” “continue,” “could,” ~~“estimate,~~“estimates,” ~~“expect,~~“expects,” “forecast,” “future,” “guidance,” “intend,” “may,” “outlook,” ~~“plan,~~“plans,” “positioned,” ~~“project,~~“projects,” “seek,” “should,” ~~“target,~~“targets,” “will,” “would” or similar words ~~may be used to identify forward-looking statements; however, the absence of these words does not mean~~indicating that ~~the statements~~future outcomes are ~~not forward-looking.~~uncertain. While we believe that our assumptions concerning future events are reasonable, these expectations may not prove to be correct. A number of factors could cause results to differ materially from those 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, including liquified natural gas, and the resulting impact on price;

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•changes in expected reserve or production levels;

•changes in political 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 and other global and domestic political, economic or diplomatic developments;

•capital available for exploration and development;

•risks related to our hedging activities;

•voluntary 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;

•drilling and operating risks;

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

•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 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;

~~Table of Contents~~

•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;

•the impacts of supply chain disruptions that began during the COVID-19 pandemic and 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~~business;

•;changes in safety, health, environmental, tax, currency and other regulations, or requirements or initiatives including those addressing the impact of global climate change, air emissions or water management;

•our ability to achieve, reach or otherwise meet initiatives, plans or ambitions with respect to ESG matters;

•our ability to pay dividends and make share repurchases;

•our ability to secure increased exposure to global LNG market prices and progress on the E.G. Gas Mega Hub;

•impacts of the IRA;

•the risk that ~~the Ensign~~ assets we acquire do not perform consistent with our expectations, including with respect to future production or drilling inventory;

•other geological, operating and economic considerations; and

•the risk factors, forward-looking statements and challenges and uncertainties described in our ~~2022~~2023 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. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained throughout this report.

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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 12 8 and Note 13 9 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 ~~September 30, 2023,~~March 31, 2024, we had open commodity derivatives related to crude ~~oil and natural gas.~~oil. Based on the ~~September 30, 2023~~March 31, 2024 published NYMEX WTI ~~and natural gas~~ futures prices, a hypothetical 10% change (per bbl for crude ~~oil and per MMBtu for natural gas)~~oil) would change the fair values of our commodity derivative positions to the following:


(In millions)	(In millions)	Fair Value at September 30, 2023		Hypothetical Price Increase of 10%		Hypothetical Price Decrease of 10%		(In millions)	Fair Value at March 31, 2024	Hypothetical Price Increase of 10%	Hypothetical Price Decrease of 10%
Derivative asset (liability) - Crude Oil	Derivative asset (liability) - Crude Oil	$	—	$	(13)	$	9
Derivative asset (liability) - Natural Gas		3		2		3

Total		$	3	$	(11)	$	12

Interest Rate Risk

At ~~September 30, 2023,~~March 31, 2024, our portfolio of current and long-term debt is comprised of floating rate debt and fixed-rate instruments. Our ~~Term Loan~~Revolving Credit Facility ~~is a~~and commercial paper borrowings are floating rate debt ~~instrument,~~instruments, which exposes us to the risk of earnings or cash flow losses as the result of potential increases in market interest rates. At ~~September 30, 2023,~~March 31, 2024, we had ~~$1.5 billion~~an immaterial outstanding balance under our Revolving Credit Facility and $450 million outstanding borrowings under ~~floating rate debt instruments.~~our commercial paper program. Assuming no change in the amount of floating rate debt outstanding, a hypothetical 100 basis point increase in the average interest rate under ~~these~~our commercial paper borrowings would ~~increase~~have increased our ~~annual~~ interest expense by approximately ~~$15~~$5 million. Actual results may vary due to changes in the amount of floating rate debt outstanding.

At ~~September 30, 2023,~~March 31, 2024, we had ~~$3.8~~$5.0 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 ~~September 30, 2023,~~March 31, 2024, 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 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 hedges to the following as of ~~September 30, 2023:~~March 31, 2024:

(In millions)

Fair Value at

September 30, 2023

Hypothetical Interest Rate Increase of 10%

Hypothetical Interest Rate Decrease of 10%

Interest rate asset (liability) - designated as cash flow hedges

(In millions)

Interest rate asset - designated as cash flow hedges

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 ~~September 30, 2023.~~March 31, 2024.

During the first ~~nine~~three months of ~~2023,~~2024, there were no changes in our internal control over financial reporting that have materially affected, or were reasonably likely to materially affect, our internal control over financial reporting.

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Part II – OTHER INFORMATION

Item 1. Legal Proceedings

We have received ~~NOV’s~~Notices of Violation (“NOVs”) from the EPA related to ~~allegations of~~alleged violations of the Clean Air 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. The resolution of the enforcement action will likely include monetary sanctions, for which we maintain an updated accrual as matters progress, and implementation of both environmental mitigation projects and injunctive terms, which would increase both our development costs and operating costs. ~~We maintain an accrual~~Based on our discussions with the EPA and Department of Justice since the filing of our Form 10-K for ~~estimated potential monetary sanctions. While~~the year ended December 31, 2023, we do not believe resolution of this matter will have a material adverse effect on our business or ~~operations, there exists substantial~~operations. We have in good faith begun implementing select enhanced compliance requirements associated with likely settlement terms and costs to continue this effort are already fully contemplated in our previously announced 2024 capital budget. There remains 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~~We received ~~NOV’s~~NOVs from the EPA relating to alleged Clean Air Act violations following flyovers conducted in 2020 and 2022 over certain of ~~the Company’s~~our oil and gas facilities in New Mexico. The notices involve alleged emission and permitting violations. ~~The Company has~~We have initiated discussions with the EPA to resolve these matters. ~~At this time,~~As we are still investigating these allegations, we are unable to estimate the potential loss associated with ~~these matters,~~this matter, however, it is reasonably possible that the resolution ~~of these matters~~ may result in a fine or 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 ~~2022~~2023 Annual Report on Form 10-K. See Note 21 17 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 ~~2022~~2023 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 ~~2022~~2023 Annual Report on Form 10-K. There have been no material changes or updates to the risk factors previously disclosed in our ~~2022~~2023 Annual Report on Form 10-K.

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 ~~September 30, 2023,~~March 31, 2024, 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(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)
07/01/2023 - 07/31/2023 — $ — — $ 1,764,769,042
08/01/2023 - 08/31/2023 3,840,870 25.97 3,840,870 1,665,019,129
09/01/2023 - 09/30/2023 11,782,201 26.74 11,782,201 1,350,019,479
Total 15,623,071 $ 26.55 15,623,071


Period	Total Number of Shares Purchased	Average Price Paid per Share(a)		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(a)(b)
01/01/2024 - 01/31/2024	—	$	—	—	$	2,306,100,537
02/01/2024 - 02/29/2024	—	—		—	2,306,100,537
03/01/2024 - 03/31/2024	10,684,622	26.67		10,684,622	2,021,100,568
Total	10,684,622	$	26.67	10,684,622

(a)~~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)~~(b)Refer to our ~~2022~~2023 Annual Report on Form 10-K for historical share repurchase program authorizations and repurchase activity through December 31, ~~2022.~~2023. As of ~~September 30, 2023,~~March 31, 2024, we have approximately ~~$1.4~~$2.0 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 ~~September 30, 2023,~~March 31, 2024, were held as treasury stock.

Item 5. Other Information

During the three months ended ~~September 30, 2023,~~March 31, 2024, nodirector 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.

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Item 6. Exhibits
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 October 25 , 2023 )
8-K/A 3.2 10/30/2023
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*
Incremental Commitment Supplement, dated as of September 19, 2023, 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, the Sixth Amendment, dated as of June 21, 2021 and the Seventh Amendment, dated as of July 28, 2022, 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.
10.2†*
Marathon Oil Corporation Executive Tax, Estate and Financial Planning Program, Amended and Restated Effective January 1, 2024
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.

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 October 25, 2023)

8-K/A

3.2

10/30/2023

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†*

2024 Form of Marathon Oil Corporation 2019 Incentive Compensation Plan Restricted Stock Unit Award Agreement for Section 16 Officers

10.2†*

2024 Form of Marathon Oil Corporation 2019 Incentive Compensation Plan Performance Unit Award Agreement 2024 - 2025 Performance Cycle for Section 16 Officers

10.3†*

2024 Form of Marathon Oil Corporation 2019 Incentive Compensation Plan Performance Unit Award Agreement 2024 - 2026 Performance Cycle for Section 16 Officers

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.

4434

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.


~~November~~May 2, ~~2023~~2024		MARATHON OIL CORPORATION

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

4535


(In millions)	Balance Sheet Location:	September 30, 2023		December 31, 2022
ROU assets:
Operating leases	Other noncurrent assets	$	93	$	123
Finance leases	Other noncurrent assets	20		24
Total ROU assets		$	113	$	147
Lease liabilities:
Current liabilities
Operating leases	Other current liabilities	$	63	$	94
Finance leases	Other current liabilities	7		6
Noncurrent liabilities
Operating leases	Deferred credits and other liabilities	35		32
Finance leases	Deferred credits and other liabilities	13		18
Total lease liabilities		$	118	$	150


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

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


(In millions)	Ownership as of September 30, 2023	September 30, 2023		December 31, 2022
EGHoldings (a)	56%	$	108	$	287
Alba Plant LLC (b)	52%	160		155
AMPCO (c)	45%	153		135
Total		$	421	$	577


	Three Months Ended September 30,		Nine Months Ended September 30,
Drilling Activity - U.S. Resource Plays	2023	2022	2023	2022
Gross Operated
Eagle Ford:
Wells drilled to total depth	18	22	83	86
Wells brought to sales	38	48	123	95
Bakken:
Wells drilled to total depth	19	12	64	36
Wells brought to sales	25	9	65	49
Oklahoma:
Wells drilled to total depth	7	4	11	13
Wells brought to sales	4	—	9	19
Permian:
Wells drilled to total depth	5	6	19	12
Wells brought to sales	9	13	25	13


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)
07/01/2023 - 07/31/2023	—	$	—	—	$	1,764,769,042
08/01/2023 - 08/31/2023	3,840,870	25.97		3,840,870	1,665,019,129
09/01/2023 - 09/30/2023	11,782,201	26.74		11,782,201	1,350,019,479
Total	15,623,071	$	26.55	15,623,071