(b) The spin-off of Marathon's downstream business was completed on June 30, 2011, and all comparative periods have been recast to reflect the downstream business as discontinued operations.
(c) Cash flow from continuing operations before changes in working capital is a non-GAAP financial measure and should not be considered a substitute for cash flow from operations as determined in accordance with accounting principles generally accepted in the United States. See below for further discussion of cash flow from continuing operations before changes in working capital.
"Last year, the first full year for Marathon Oil as an independent Exploration and Production (E&P) company, was marked by outstanding execution in our domestic resource plays, continued safe and reliable operations in our base assets and entry into new, high-potential exploration opportunities," said Clarence P. Cazalot Jr., Marathon Oil's chairman, president and CEO.
"Our strong position in the top U.S. resource plays, a stable portfolio of base assets and solid operational performance allowed us to increase full-year Upstream (E&P and Oil Sands Mining [OSM]) net production available for sale, excluding Libya which had production disruptions in 2011, 8 percent over the prior year, exceeding our 2012 production targets.
"We project 2013 production available for sale from our Upstream businesses will be 6 to 8 percent higher than 2012, excluding Libya because of the uncertainty in production levels and Alaska as we sold that asset at the end of January 2013. Importantly, this growth will continue to be focused on higher-value liquids.
"Our future growth is underpinned by our growing resource base and net proved reserves of 2 billion barrels of oil equivalent (boe) at year end 2012, a 12 percent increase over the prior year end and our highest level of proved reserves in 40 years. During 2012 we replaced 226 percent of our production, 185 percent excluding acquisitions, both at a preliminary cost estimate of approximately $17 per boe. This outstanding performance was largely driven by what we consider to be the highest-value resource plays in the world - the Eagle Ford shale in south Texas, the Bakken shale in North Dakota and the Oklahoma Resource Basins. We've established a 10-year plus drilling inventory across these plays at current rig levels and expect to spend approximately one-third of our $5.2 billion capital, investment and exploration budget for 2013 in the Eagle Ford, the cornerstone of our growth strategy.