Marathon Oil Corporation

Welcome to Marathon Oil third quarter earnings 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. If you'd like to ask a question, you could do so by pressing 01 on your touch-tone phone. As a reminder, the conference is being recorded. I will now turn the call over to Guy Baber, Vice President, Investor Relations. Sir, you may begin.

Thank you, Cheryl, and thank you as well to everyone for joining us on the call this morning. Yesterday, after the close, we issued a press release, a slide presentation, and investor packet that address our third quarter 2022 results. Alongside those standard earnings materials, we also issued a separate press release and slide deck addressing our acquisition of Ensign Natural Resources Eagleford assets. All of those 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 a reminder, 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 included in the press release and the presentation materials, as well as to the risk factors described in our SEC filings. We'll also reference certain non-GAAP terms in today's discussion, which have been reconciled and defined in our earnings materials. With that, I'll turn the call over to Lee and the rest of the team, who will provide prepared remarks. After the completion of the remarks, we'll move to a question and answer session. So, in the interest of time, Please. Thank you, Guy, and good morning to everyone listening to our call today. To start, as always, I want to first thank our employees and contractors for their dedication and hard work, as well as their commitment to our core values, especially safety and environmental excellence. We are a results-driven company, but we are equally focused on how we deliver those results. I'm proud of our entire organization. As Guy mentioned, in addition to our standard quarterly earnings materials, we're also very excited to discuss our acquisition of Ensign Natural Resources Eagle Proof Assets, a truly compelling opportunity for our company that furthers each and every one of our core strategic objectives. While there's no shortage of highlights from our third quarter financial and operational results, Our continued return of capital leadership is certainly near the top of the list. In fact, our third quarter shareholder distribution set a new record for our company. Dane will start there and provide a bit more context around our return of capital success. And then Mike will walk us through our third quarter financial and operational results and outlook in more detail. We will then spend the balance of our opening remarks on our material expansion in the Eagle Fork. Needless to say, we have a lot of ground to cover today, so let's get started. Over to Dave.

Thank you, Lee, and good morning, everybody. Returning a significant amount of capital to our shareholders through the cycle is a foundational element of our value proposition in the marketplace. As we've consistently highlighted, we believe our return of capital framework is differentiated in our peer space, uniquely calibrated to operating cash flow, not free cash flow, prioritizing our shareholders as the first call on our cash generation. This is especially important in a market characterized by inflationary headwinds and represents a strong commitment to our shareholders. And during the third quarter, I'm pleased to announce that we've further built on our return of capital leadership by setting a new quarterly shareholder distribution record for our company, corresponding to over 80 percent of our CFO, and essentially 100 percent of our free cash flow to equity holders. Total third-quarter shareholder distributions amounted to $1.2 billion, translating to an annual distribution yield of around 24 percent, a yield that's not just at the top of the E&P peer space, but at the very top of the S&P 500. While we had guided third quarter return of capital to at least 50 percent of our CFO, due to strong operating and financial performance, our financial strength, including our replenished cash balance, and favorable market conditions, including clear value in our stock price, we saw an opportunity to materially step up the pace of repurchases. We bought back $1.1 billion of stock during the third quarter. The timing of our decision proved beneficial, as third-quarter buybacks were executed at an average price of around $24 a share, well below current trading levels. While our commitment to an operating cash flow-driven return of capital model remains differentiated, so does our commitment to significant ongoing share repurchases. And the cumulative benefit of this approach has become pretty hard to ignore. Since kicking off our share buyback program last October, we've repurchased $3.4 billion of our stock, driving a 20 percent reduction to our outstanding share count in just 13 months, contributing to significant underlying growth in all of our per-share metrics. We continue to believe buying back stock is a good use of capital in current market conditions, and consistent with this belief, our Board has again topped up our outstanding buyback authorization to $2.5 billion. Looking ahead to the fourth quarter, we expect to execute around $300 million of share purchases and will ensure we fully meet our commitment to the market to return at least 50 percent of our full-year 2022 CFO to equity holders. This will represent a peer-leading 2022 annual distribution yield. Dialing back the pace of buybacks a bit at the end of the year will allow us to build some additional cash in the fourth quarter, enabling us to increase the cash funding portion of the Ensign acquisition which, as you'll hear in a minute, will contribute to a higher level of shareholder distributions in 2023 and beyond. In addition to increasing our buyback authorization, our board has also approved another increase to our base dividend, demonstrating the important synergies that exist between our base dividend and accretive buybacks. The increase to the dividend was entirely funded through year-to-date share reports. To summarize, we've been clear about our commitment to return significant capital to shareholders. We believe our operating cash flow driven framework is a strong commitment to our shareholders, protecting distributions from the impact of capital inflation. Our consistent execution of accruing buybacks has driven peer leading per share growth of 20 percent. We built one of the strongest return of capital track records in the entire S&P 500 over the trailing four quarters. And we're fully committed to extending this leadership with our 2023 distribution profile, further enhanced by the highly accretive Ensign acquisition. I'll now turn the call over to Mike, who will briefly walk us through our third quarter performance and outlook. Mike.