2019 CAPITAL PROGRAM & 2018 RESULTS February 13, 2019 - PowerPoint PPT Presentation

2019 CAPITAL PROGRAM & 2018 RESULTS February 13, 2019

Forward-Looking Statements and Other Matters This presentation (and oral statements made regarding the subjects of this presentation) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These are statements, other than statements of historical fact, that give current expectations or forecasts of future events, including, without limitation: the Company's 2019 capital budget and allocations (including development capital budget and resource play leasing and exploration spend), future performance, organic free cash flow, corporate-level cash returns on invested capital, business strategy, asset quality, drilling plans, production, cash margins, oil growth, cost and expense estimates, cash flows, uses of excess cash, return of cash to shareholders, returns, including CROIC and CFPDAS, and EG EBITDAX, asset sales and acquisitions, leasing and exploration activities, future financial position, tax rates and other plans and objectives for future operations. Words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “future”, “guidance,” “intend,” “may,” “outlook”, “plan,” “project,” “seek,” “should,” “target,” “will,” “would,” or similar words may be used to identify forward -looking statements; however, the absence of these words does not mean that the statements are not forward-looking. While the Company believes its assumptions concerning future events are reasonable, a number of factors could cause actual results to differ materially from those projected, including, without limitation: conditions in the oil and gas industry, including supply/demand levels and the resulting impact on price; changes in expected reserve or production levels; changes in political or economic conditions in the jurisdictions in which the Company operates, including changes in foreign currency exchange rates, interest rates, inflation rates, and global and domestic market conditions; capital available for exploration and development; risks related to our hedging activities; well production timing; drilling and operating risks; availability of drilling rigs, materials and labor, including the costs associated therewith; difficulty in obtaining necessary approvals and permits; non-performance by third parties of contractual obligations; unforeseen hazards such as weather conditions; acts of war or terrorism, and the governmental or military response thereto; cyber-attacks; changes in safety, health, environmental, tax and other regulations; other geological, operating and economic considerations; and the risk factors, forward- looking statements and challenges and uncertainties described in the Company’s 2017 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other public filings and press releases, available at www.Marathonoil.com. Except as required by law, the Company undertakes no obligation to revise or update any forward-looking statements as a result of new information, future events or otherwise. This presentation includes non-GAAP financial measures, including organic free cash flow and E.G. EBITDAX. Reconciliations of the differences between non-GAAP financial measures used in this presentation and their most directly comparable GAAP financial measures are available at www.Marathonoil.com in the 4Q18 Investor Packet. 2

Framework for Success Our working definition of capital discipline Committed to our Framework • Portfolio transformation and focused capital allocation drive multi-year Corporate Returns corporate returns improvement through capital efficient oil growth Free Cash Flow • Sustainable free cash flow at conservative pricing • Return incremental capital to shareholders in addition to peer Return of Capital competitive dividend; funded through free cash flow, not dispositions • Continuous improvement in capital efficiency and operating costs Differentiated Execution while enhancing our resource base; delivering on our commitments Powered by our Foundation • Capital allocation flexibility, broad market access, supplier diversification, Multi-Basin Portfolio rapid sharing of best practices, platform for talent development • Financial flexibility to execute business plan across broad range of Balance Sheet Strength pricing; current net debt/EBITDAX among lowest in peer group 3

Forward Outlook Prioritizes Returns, FCF, Return of Capital 1 Organic FCF positive in both 2019 and 2020 above $45/bbl WTI, post-dividend • Continues multi-year rate of change improvement in key enterprise performance metrics − 20% CROIC and 18% CFPDAS CAGRs (2017-2020) at $50/bbl Corporate Returns WTI flat − 30% CROIC and CFPDAS CAGR (2017-2020) at $60/bbl WTI flat • Organic FCF positive above $45/bbl WTI in both 2019 and 2020 • Portfolio delivers strong two-year (2019-2020) organic FCF Free Cash Flow − >$750MM at $50/bbl WTI flat − >$2.2B at $60/bbl WTI flat • Continue to prioritize return of capital − Returned over 25% of operating cash flow to shareholders in Return of Capital 2018 − Return of capital metric incorporated into executive compensation scorecard, complementing CROIC and CFPDAS • High value oil growth exceeds BOE growth, an outcome of returns- first capital allocation Differentiated Execution − 2019 U.S. oil growth of 12% and total oil growth of 10% • Maintaining focus on organic resource base enhancement 1 Organic FCF = Operating Cash Flow before working capital (excl. exploration costs other than well costs), less Development Capex, less Dividends, plus EG return of capital & other 2 CROIC = Cash return on invested capital; calculated by taking cash flow (Operating Cash Flow before working capital + net interest after tax) divided by (average Stockholder’s Equity + average Net Debt); 3 CFPDAS = Cash flow per debt adjusted share; calculated by taking cash flow (Operating Cash Flow before working 4 capital + net interest after tax) divided by total shares including debt shares. Debt shares is the average net debt during a calendar year divided by the average annual stock price; See the 4Q 2018 Investor Packet at www.Marathonoil.com for non-GAAP reconciliations

Sustainable FCF in 2019 & 2020 at Conservative Pricing Differentiated annual FCF yield vs. E&P peers $2.2B+ Cumulative Organic FCF 2,500 10% Organic FCF Yield (Annual Avg.) Cumulative Organic FCF ($MM) 2,000 $750MM+ 1,500 Cumulative Organic FCF 5% 1,000 Organic FCF+ Above $45/bbl in Both Years 500 0 0% 2019 – 2020 2019 – 2020 2019 – 2020 2019 - 2020 2019 - 2020 2019 - 2020 ($45 WTI) ($50 WTI) ($60 WTI) Organic FCF Yield (Annual Avg.) Organic FCF *Organic FCF yield represents average annualized yield for 2019 and 2020 using MRO stock price as of 2/8/19 5

Differentiated Execution Led the Way in 2018 Underpins confidence in 2019 delivery Initial Guidance Actual Delivery 2018 Objectives @$50/bbl WTI @$65/bbl WTI Capital Discipline $2.3B development capital $2.3B development capital 30% CROIC improvement 78% CROIC improvement Corporate Returns 10% CFPDAS improvement 65% CFPDAS improvement Organic FCF positive, post- $865MM of post-dividend, Free Cash Flow dividend, above $50/bbl WTI organic FCF Prioritize incremental return, $700MM of share buybacks Return of Capital above dividend, through and $170MM dividend sustainable organic FCF 18% total oil growth at 24% total oil growth, midpoint, divestiture Capital Efficient Oil divestiture adjusted adjusted Growth 22.5% resource play oil 32% resource play oil growth at midpoint growth 6

2019 Capital Program Overview Focused program balances corporate returns with strategic objectives Focused Investment • Total capital program of $2.6B , down from 2018 – Comprised of $2.4B development capital and $200MM of resource play leasing and exploration (REx) capital Resource Play – Planning basis of $50/bbl WTI; organic free cash flow Development positive above $45/bbl WTI, post-dividend Other REx • Over 95% of development capital allocated to U.S. resource plays – ~60% of resource play capital allocated to Eagle Ford and Bakken with ~ 40% to Oklahoma and Northern Delaware, similar to 2018 Resource Play – Capital Allocation Capital efficient oil growth on flat wells to sales drives corporate returns improvement – Development capital continues to fund organic Northern Eagle Ford resource base enhancement initiatives Delaware • Year-over-year reduction in REx capital reflects more ratable forward spending profile Oklahoma – Continues progression of LA Austin Chalk and other Bakken emerging opportunities with focus on full cycle returns 7