Marathon Oil Corporation

Good morning and welcome to the Marathon Oil fourth quarter and full year 2022 conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Guy Faber, Vice President of Investor Relations. Please go ahead.

Thank you, Anita, 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 packets that address our fourth quarter and full year 2022 results, as well as our 2023 outlook. 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, our Executive VP and CFO, Pat Wagner, our Executive VP of Corporate Development and Strategy, and Mike Henderson, our 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. As always, I'll refer everyone to the cautionary language included in the press release and presentation materials, as well as 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 these remarks, we'll move to a question and answer session.

Lee? Thank you, Guy, and good morning to everyone listening to our call today. First, I want to thank our employees and contractors for their collective contributions to another remarkable year, a year that can only be described as comprehensive delivery against all dimensions of our well-established framework for success. Your dedication and hard work, as well as your steadfast commitment to our core values, including safety and environmental excellence. have made possible the exceptional results I get to talk about today. So thank you. 2022 truly was an exceptional year, but our outlook for 2023 and beyond is equally compelling. While the team and I will cover a lot of ground today, I'll start by highlighting a few key things. First, we're successfully executing on the more S&P, less E&P mandate I've championed for the last few years. We're delivering financial and operational outcomes, not just at the top of our high-performing E&P peer groups, but at the very top of the S&P 500. The results in 2022 really do speak for themselves. $4 billion of adjusted free cash flow generation, the strongest free cash flow yield in our peer group, and one of the top five free cash flow yields in the entire S&P 500. the lowest reinvestment rate in our peer group, a full 10 percentage points below the S&P 500 average, and one of the lowest capital intensities, all indicators of a now well-established capital and operating efficiency advantage relative to a high-performing peer group. Second, we're returning significant capital back to our shareholders through our cash flow-driven return of capital framework. Our framework is transparent It's differentiated. It prioritizes our investors as the first call on capital. And it uniquely protects shareholder distributions from capital inflation. During 2022, we returned 55% of our adjusted free cash flow from operations, or $3 billion to shareholders. And for those keeping score relative to the free cash flow-based models of our peers, that equates to about 75% of free cash flow. That also translates to a 17 percent shareholder distribution yield, the highest distribution yield in our E&P peer space and one of the top 10 distribution yields in the entire S&P 500. We've remained steadfast in our commitment to the powerful combination of a competitive and sustainable base dividend in addition to consistent share repurchases. That consistency paid off with $2.8 billion of accreted share repurchases that reduced our share count by 15%, driving significant growth on a per-share basis. Rewinding all the way back to the start of this most recent share repurchase program in October of 2021, we have reduced our share count by 20%, again, leading the peer group. And we raised our base dividend three times during 2022, bringing our track record to seven increases in the last eight quarters. Third, we successfully closed on the Ensign acquisition before year-end, materially strengthening our portfolio and enhancing our Eagleford scale. The Ensign acquisition makes us a stronger company, checking every box of our disciplined acquisition criteria. It's accreted to key financial metrics. It's accreted to our return of capital framework. It's a creative to our high-quality inventory life, and it offers compelling industrial logic in the core of a basin we know well. Pat will provide additional details later in the call, but in short, integration efforts are progressing well, and initial 2023 results have outperformed our expectations. Finally, while 2022 was certainly a banner year, I'm just as excited about our potential in 2023 and beyond. Fully consistent with our disciplined capital allocation framework, our 2023 budget prioritizes significant free cash flow generation and return of capital to shareholders. At reference commodity prices of $80 WTI, $3 Henry Hub, and $20 TTF, we expect to generate $2.6 billion of adjusted free cash flow, and we expect to return a minimum of $1.8 billion to our shareholders, providing clear visibility to a double-digit shareholder distribution yield. And recognizing the ongoing volatility in commodity prices, particularly natural gas, it is important to note that a 50 cent per MMBTU change in Henry Hub only impacts our annual cash flow by just over $100 million, while a dollar change in WTI moves cash flow by about $70 million. reflecting continued leverage to oil pricing in our balanced portfolio. Once again, we fully expect to lead our peer group and the broader S&P 500 when it comes to the financial and operation metrics that matter most, free cash flow generation, capital and operating efficiency, and shareholder distributions. And while our 2023 outlook is compelling, we're even better positioned for 2024 as our unique integrated gas business in Equatorgan A will benefit from an increase to global LNG price exposure. Just as a reminder, the current Henry Hub Index contract for equity ALBA gas through EGLNG expires at the end of 2023, and we will move to a market-based global LNG linkage. With the current and significant arbitrage between Henry Hub and Global LNG prices, we expect this to translate into an uplift to 2024 EBITDA of $500 million to potentially more than $1 billion relative to 2023. With that, I'll turn it over to Dane. He'll provide more detail around our return of capital performance and output. Dane?