Marathon Oil Corporation Reports Fourth Quarter And Full-Year 2012 Results

Net additions, including acquisitions, were driven primarily by U.S. resource play activity in the Eagle Ford shale, the Oklahoma Resource Basins and the Bakken shale as well as additions in Canada, Norway and Libya.

Consistent with the Company's liquids-focused strategy, Marathon Oil added a total of 316 million barrels of net proved liquid hydrocarbon and SCO reserves, including acquisitions of 52 million barrels, while producing 118 million barrels, resulting in a total liquids reserve replacement ratio of 268 percent.

For the three-year period ended Dec. 31, 2012, Marathon Oil added net proved reserves of 808 million boe, excluding the dispositions of 3 million boe, while producing 467 million boe, resulting in a three-year average reserve replacement ratio of 173 percent.

Estimated Net Proved Reserves
	E&P			OSM	Total	Percent Proved Developed of Total
	Liquid Hydrocarbons	Natural Gas	Total	Synthetic Crude Oil
	(mmbbl)	(bcf)	(mmboe)	(mmbbl)	(mmboe)
As of Dec. 31, 2011	733	2,666	1,177	623	1,800	78%
Additions	219	330	274	45	319
Acquisitions	52	105	70	--	70
Production	(103)	(322)	(157)	(15)	(172)
As of Dec. 31, 2012	901	2,779	1,364	653	2,017	72%
Reserve Replacement Ratio (including acquisitions)	263%	135%	219%	300%	226%
Reserve Replacement Ratio (excluding acquisitions)	213%	102%	175%	300%	185%

Segment Results

Total segment income was $555 million in the fourth quarter of 2012 and $2.148 billion for the full-year 2012, compared to $590 million in the third quarter of 2012 and $2.591 billion for full-year 2011.

	Three Months Ended			Year Ended
	Dec. 31	Sept. 30		Dec. 31	Dec. 31
(In millions)	2012	2012		2012	2011
Segment Income
Exploration and Production
United States	$104	$110		$393	$366
International	397	376		1,488	1,791
Total E&P	501	486		1,881	2,157
Oil Sands Mining	19	65		176	256
Integrated Gas	35	39		91	178
Segment Income (a)	$555	$590		$2,148	$2,591

(a)    See Supplemental Statistics below for a reconciliation of segment income to net income as reported under generally accepted accounting principles.

	Three Months Ended			Year Ended
	Dec. 31	Sept. 30		Dec. 31	Dec. 31
(mboed)	2012	2012		2012	2011
Net Sales Volumes
Exploration and Production
United States	200	172		167	130
International	287	280		266	233
Total E&P	487	452		432	363
Oil Sands Mining	48	53		47	43
Total Upstream	535	505		479	406
Libya	64	53		44	5
Total Upstream Excluding Libya	471	452		435	401

	Three Months Ended			Year Ended
	Dec. 31	Sept. 30		Dec. 31	Dec. 31
(mboed)	2012	2012		2012	2011
Production Available for Sale
Exploration and Production
United States	198	171		166	129
International	264	295		270	236
Total E&P	462	466		435	365
Oil Sands Mining	43	46		41	38
Total Upstream	505	512		476	403
Libya	42	74		49	8
Total Upstream Excluding Libya	463	438		427	395

Exploration and Production

E&P segment income totaled $501 million in the fourth quarter of 2012, compared to $486 million in the third quarter of 2012. On a pre-tax basis, the increase was primarily the result of higher liquid hydrocarbon sales volumes, along with higher natural gas prices mostly offset by higher depreciation, depletion and amortization (DD&A) and operating costs associated with the additional volumes and higher exploration expenses. For full-year 2012, E&P segment income was $1.881 billion, compared to $2.157 billion for 2011. The decrease included lower earnings in the U.K. and Equatorial Guinea, partially offset by higher earnings in Libya. Also, in 2011 the Company was not in an excess foreign tax credit position for the entire year as it was in 2012.

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