Marathon Oil Corporation

Welcome to the Marathon Oil third quarter earnings conference call. My name is Cheryl and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. During the question and answer session, if you have a question, please press star then one on your touchtone phone. Please note that this conference call is being recorded. I will now turn the call over to Guy Baber, Vice President, Investor Relations. You can begin, sir.

Thank you, Cheryl, and thank you as well 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 addressed our third quarter 2021 results. These documents can be found on our website at MarathonOil.com. Joining me on today's call are Lee Tillman, our Chairman, President, and CEO, Dane Whitehead, Executive VP and CFO, Pat Wagner, Executive VP of Corporate Development and Strategy, and Mike Henderson, Executive VP of Operations. As always, today's call will contain forward-looking statements subject to risks and uncertainties that can 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'll also hear from Mike, Dan, and Pat before we get to our question and answer session.

Lee? Thank you, Guy, and good morning to everyone listening to our call today. I want to start by once again thanking our employees and contractors for their continued dedication and hard work, for their commitment to safety and environmental excellence, and for their contributions to another quarter of outstanding execution and financial delivery. While I get the privilege of talking about our company's impressive results and outlook today, it is their hard work that makes all of this possible. Through our commitment to capital discipline and our differentiated execution, we are successfully delivering outsized financial outcomes for our shareholders, highlighted by more than $1.3 billion of free cash flow year-to-date. For our $1 billion full-year 2021 capital budget at forward curve commodity pricing, we now expect to generate well over $2 billion of free cash flow this year at a reinvestment rate below 35% and a free cash flow break-even below $35 per barrel WTI. We are successfully delivering on all of our financial and operational objectives. and achieving bottom line results that we will put head-to-head against any other energy company and against any other sector in the S&P 500. This strong financial performance has enabled us to pull forward our balance sheet targets, and this further improvement to our already investment-grade balance sheet has given us the confidence to dramatically accelerate the return of capital to equity holders. Under our unique return of capital framework, our shareholders get the first call on cash flow, a minimum of 40% of our total cash flow from operations in the current price environment. Consistent with our commitment to shareholder returns and our objective to pay a competitive and sustainable base dividend, we have raised our base dividend by 20% this quarter. This is the third quarter in a row that we have increased our base dividend, representing a cumulative 100% increase since the end of 2020, a sign of the increased confidence we have in our business. We are also targeting approximately $500 million of share repurchases during fourth quarter, with $200 million already executed. At a free cash flow yield north of 20%, we believe our equity offers tremendous value. Additionally, there remains a dislocation between our equity and strengthening commodity prices, coupled with a more mature business model that underwrites repurchases through the cycle. Further, buying back our stock for good value provides the added potential of significantly reducing our share count, meaningfully improving all of our per share metrics, even under a maintenance scenario, and increasing our longer term capacity for continued per-share base dividend increases. Looking ahead to fourth quarter, including our base dividend and planned share repurchases, we expect to return approximately 50% of our total cash flow from operations to equity holders, fully consistent with our return of capital framework that prioritizes the shareholder first. Our financial flexibility and the power of our portfolio in the current commodity price environment provided the confidence for our board to also increase our total share repurchase authorization to $2.5 billion to ensure we can continue executing on our return of capital plans as we progress through 2022. And perhaps most importantly, Everything that we are doing is sustainable, backed by our five-year benchmark maintenance scenario and our ongoing pursuit of ESG excellence through top quartile safety performance, significant reductions to our GHG intensity, and best-in-class corporate governance. With that brief overview, I will turn it over to Mike Henderson, our Executive VP of Operations, who will provide an update on our execution relative to our 2021 business plan.