Marathon Oil (MRO) Q2 2024 earnings summary

Executive summary

• Q2 2024 net income was $349 million ($0.62 per diluted share), up from $287 million in Q2 2023, driven by higher U.S. crude/NGL prices and new global LNG sales; adjusted net income was $357 million ($0.63 per share), reflecting non-recurring items.

• Marathon Oil entered into a merger agreement with ConocoPhillips, expected to close in Q4 2024, with $10 million in transaction costs incurred so far; share repurchase program discontinued.

• Net operating cash flow reached $1,088 million in Q2; adjusted CFO before working capital changes was $1,028 million.

• Free cash flow was $442 million; adjusted free cash flow was $364 million, including Equatorial Guinea distributions.

• 2024 capital budget of $1.9–$2.1 billion and oil production guidance midpoint of 190 mbopd reaffirmed.

Financial highlights

• Q2 2024 revenues from contracts with customers were $1.67 billion, up from $1.48 billion in Q2 2023; total Q2 revenues and other income were $1,707 million.

• Net income per diluted share was $0.62 for Q2 2024, compared to $0.47 in Q2 2023; adjusted net income per share was $0.63.

• Operating cash flow for the first six months was $1.85 billion, down 5% from $1.94 billion in the prior year.

• Capital expenditures were $665 million in Q2, consistent with guidance and reflecting accelerated well completions.

• Returned $294 million to shareholders in Q2: $231 million in share repurchases and $63 million in dividends.

Outlook and guidance

• 2024 production and capital expenditure guidance unchanged: oil production 185,000–195,000 bopd, total production 380,000–400,000 boed, capex $1.9–$2.1 billion.

• Oil and oil-equivalent production expected to peak in Q3 2024, then moderate in Q4; capex to decline sequentially in Q3 and Q4.

• Merger agreement restricts certain capital budget expansions and dividend increases above $0.11 per share per quarter.