Marathon Oil Corporation (NYSE:MRO) Q3 2019 Earnings Conference Call - Final Transcript

Nov 07, 2019 • 09:00 am ET


Marathon Oil Corporation (NYSE:MRO) Q3 2019 Earnings Conference Call - Final Transcript


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Good morning, and welcome to the MRO's Third Quarter Earnings Conference Call. My name is Brandon, and I'll be your operator for today. [Operator Instructions] Please note this conference is being recorded. And I will now turn it over to Guy Baber, Vice President of Investor Relations. You may begin, sir.

Guy Baber

Thank you, Brandon. And thank you to everyone for joining us this morning on the call. Yesterday, after the close, we issued a press release, a slide presentation and an investor packet that address our third quarter results. Those documents can be found on our website at Joining me on today's call are Lee Tillman, our Chairman, President and CEO; Dane Whitehead, Executive VP and CFO; Mitch Little, Executive VP of Operations; and Pat Wagner, Executive VP of Corporate Development and Strategy.

As always, today's call will contain forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. I'll refer everyone to the cautionary language included in the press release and presentation materials as well as to the risk factors described in our SEC filings.

With that, I'll turn the call over to Lee, who will provide his opening remarks, we will then open the call to Q&A.

Lee Tillman

Thanks, Guy. And thank you to everyone joining us this morning. Third quarter once again featured exceptional execution across all aspects of our business. This consistent differentiated execution against a transparent framework for capital discipline is driving compelling bottom-line financial outcomes for our shareholders that compete not only against our independent E&P peers but more importantly against the broader market as well. We continue to consistently and comprehensively deliver against our framework for success, which defines our brand of capital discipline. We are driving our corporate returns higher; generating sustainable free cash flow at conservative pricing; prioritizing return of capital to shareholders through dividends and share repurchases; and improving our capital efficiency, cost structure and resource base, including the just announced addition of over 1,000 operated locations, all through differentiated execution. Our strong operational and financial performance continues to be powered by a transformed multi-basin portfolio and a top-tier balance sheet, the foundations for our continued success.

Turning to third quarter highlights, I will start my commentary by addressing the strong financial outcomes we have now delivered for multiple quarters that serve as proof points for our business strategy and that define our investment case. It starts with our returns-first orientation. On a year-to-date basis, our annualized cash return on invested capital is 20%, consistent with the prior year, despite a 12% decline in WTI prices and meaningful weakness in NGL and gas pricing. This underlying corporate returns improvement is an outcome of our success across multiple dimensions - portfolio management, concentrated capital allocation, more efficient operations, high-margin oil growth, lower cash cost and well cost reductions. Additionally, it is this returns-first mindset that drives our comprehensive framework for ongoing resource capture and enhancement. More on that in