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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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