Marathon Oil Corporation (NYSE:MRO) Q4 2019 Earnings Conference Call - Final Transcript

Feb 13, 2020 • 09:00 am ET


Marathon Oil Corporation (NYSE:MRO) Q4 2019 Earnings Conference Call - Final Transcript


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Welcome to the MRO Fourth Quarter 2019 Earnings Conference Call. My name is Sylvia and I'll be your operator for today's call. [Operator Instructions]

I will now turn it over to Guy Baber. Mr. Baber, you may begin.

Guy Baber

Thank you Sylvia, and thanks to everyone for joining us this morning on the call. Yesterday after the close we issued a press release, slide presentation and investor packet that address our fourth quarter and full-year performance as well as our 2020 capital budget and associated guidance. 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 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. I will begin my comments covering our forward two-year outlook. And in doing so, I will also cover our track record of execution against our framework for success. This track record against a transparent set of priorities, corporate returns, sustainable free cash flow generation, return of capital to shareholders is unique in our peer space, it's comprehensive and it has resulted in bottom line financial and operational outcomes that few E&Ps have been able to match.

Most importantly, it has resulted in financial outcomes that also compete on a heads up basis against the broader market. Our challenge is less E&P and more S&P. It is this successful track record of execution that underpins confidence in both our strategy as well as our sustainability to continue delivering, despite an ongoing backdrop of uncertainty, and volatility. Looking to the specifics of our forward two-year plan, as you would expect our outlook prioritizes the financial metrics that matter most; corporate returns improvement and sustainable free cash flow generation across a wide range of commodity prices.

And as you've heard me say again and again, it all starts with our returns first orientation. Corporate returns improvement remains a top capital allocation objective. As such, it should be no surprise that it's also a key element of our executive compensation scorecard, and our focus is bearing fruit.Our underlying price normalized 2019 cash return on invested capital is over 50% higher than in 2017. This robust improvement is the product of success across multiple dimensions, portfolio management, concentrated capital allocation, efficient operations, high-margin oil growth and significant cost reductions.

Looking ahead, we fully expect to continue building on this momentum. Disciplined reinvestment across our high quality multi-basin