Marathon Oil Corporation Reports Second Quarter 2008 Results

HOUSTON, July 31 /PRNewswire-FirstCall/ -- Marathon Oil Corporation (NYSE:
MRO) today reported second quarter 2008 net income of $774 million, or $1.08
per diluted share. Net income in the second quarter 2007 was $1.550 billion,
or $2.25 per diluted share. For the second quarter 2008, net income adjusted
for special items was $858 million, or $1.20 per diluted share, compared to
net income adjusted for special items of $1.548 billion, or $2.25 per diluted
share, for the second quarter 2007. (Logo:
http://www.newscom.com/cgi-bin/prnh/20051027/DATH029LOGO )

2nd Quarter Ended June 30
(In millions, except per diluted share data) 2008 2007

Net income adjusted for special items(a) $858 $1,548
Adjustments for special items (net of income taxes):
Loss on U.K. natural gas contracts (84) (5)
Gain on sale of discontinued operations - 8
Loss on early extinguishment of debt - (1)
Net income $774 $1,550
Net income adjusted for special items(a) -
per diluted share $1.20 $2.25
Net income - per diluted share $1.08 $2.25
Revenues and other income $22,225 $16,887
Weighted average shares - diluted 714 689

(a) Net income adjusted for special items is a non-GAAP financial measure
and should not be considered a substitute for net income as
determined in accordance with accounting principles generally
accepted in the United States. See below for further discussion of
net income adjusted for special items.

Marathon's second quarter 2008 results include a non-cash, after-tax mark-
to-market loss of $220 million on derivatives intended to mitigate price risk
related to future sales of Canadian synthetic crude. The last of these
derivatives is set to expire in the fourth quarter of 2009.
"The second quarter 2008, compared to the second quarter 2007, was a
challenging quarter financially, particularly as a result of the significantly
lower refining and wholesale marketing realized margins in a very difficult
downstream environment and the derivatives loss incurred in the Oil Sands
Mining segment. However, our Upstream business had a record quarter in
profitability and our Integrated Gas segment continues to perform well," said
Clarence P. Cazalot, Jr., Marathon president and CEO.
"Operationally, the quarter saw Marathon delivering on our defined
profitable growth in the Upstream segment, with production available for sale
increasing more than 8 percent over the same period in 2007 and we have had
two high-margin major development projects brought online within the last two
months.
"The Alvheim/Vilje development offshore Norway achieved first oil in early
June and is currently producing from five wells in the Alvheim portion of the
development, and the non-operated Neptune development in the Gulf of Mexico
began operations just after the quarter ended. Strong production from Alvheim
and Neptune, and solid operations across our entire Upstream business will
help drive Marathon's production performance for the year and will contribute
significantly to Marathon's production growth through 2012.
"While the downstream environment remains challenged with tight margins,
Marathon is focused on lowering feedstock costs and increasing efficiency and
flexibility by expanding our coking capacity. The 180,000 barrels per day
(bpd) refinery expansion at our facility in Garyville, La., is almost 60
percent complete, on budget and scheduled for late 2009 startup. Construction
recently started on the Detroit Heavy Oil Upgrading Project, and upon
completion in late 2010, it will allow us to refine an additional 80,000 bpd
of heavy crude oil," Cazalot said.
Segment Results
Total segment income was $931 million in the second quarter of 2008,
compared to $1.658 billion in the second quarter of 2007.

2nd Quarter Ended June 30
(In millions) 2008 2007
Segment Income (Loss)
Exploration & Production (E&P)
United States $359 $173
International 469 227
Total E&P 828 400
Oil Sands Mining (OSM) (157) -
Refining, Marketing & Transportation (RM&T) 158 1,246
Integrated Gas (IG) 102 12
Segment Income(a) $931 $1,658

(a) See Preliminary Supplemental Statistics below for a
reconciliation of segment income to net income as reported under
generally accepted accounting principles.

Exploration and Production
Exploration and Production segment income totaled $828 million in the
second quarter of 2008, which was more than double the $400 million in the
second quarter of 2007. The increase was primarily a result of higher liquid
hydrocarbon realizations as well as higher natural gas volumes.
Sales volumes during the quarter averaged 350,000 barrels of oil
equivalent per day (boepd), compared to 338,000 boepd for the same period last
year. Due to timing of a lifting, the sales volumes were lower than the
estimate of 356,000 boepd provided in the interim update.
Production available for sale in the second quarter 2008 averaged 374,000
boepd, an increase of more than 8 percent from 345,000 boepd in the same
period last year. The difference between production volumes available for sale
and the recorded sales volumes is due to the timing of international oil
liftings and natural gas held in storage. Production available for sale
exceeded estimates provided in the first quarter, primarily due to the
deferral of planned plant maintenance in Equatorial Guinea and the better-
than-forecast reliability of the Alvheim/Vilje facilities during ramp-up of
production. The Company has narrowed its expectations for 2008 production
available for sale to be between 380,000 and 400,000 boepd, excluding the
effects of any dispositions.
United States upstream income was $359 million in the second quarter of
2008, compared to $173 million in the second quarter of 2007, primarily as a
result of higher liquid hydrocarbon and natural gas realizations, partially
offset by lower sales volumes.
International upstream income was $469 million in the second quarter of
2008, compared to $227 million in the second quarter of 2007. The increase was
primarily due to higher liquid hydrocarbon and natural gas realizations, and
higher natural gas sales that included a full quarter of operations at the EG
LNG plant, which commenced production in May 2007.

2nd Quarter Ended June 30
2008 2007
Key Production Statistics
Net Sales
United States - Liquids (mbpd) 63 65
United States - Natural gas (mmcfpd) 431 460
International - Liquids (mbpd) 119 134
International - Natural gas (mmcfpd) 573 374
Total Net Sales (mboepd) 350 338

The Alvheim/Vilje development offshore Norway commenced production on June
8, 2008 and to date has achieved an uptime of approximately 80 percent.
Currently, there are five wells producing from the Alvheim portion of the
development and the Vilje field is expected to come onstream in early August.
Based on the results thus far, Alvheim/Vilje is expected to reach a combined
production rate of 75,000 net (120,000 gross) boepd before the end of this
year. Marathon has a 65 percent operated interest in the Alvheim fields and a
47 percent outside-operated working interest in the Vilje field.
In the Gulf of Mexico, the Neptune development began production on July 6,
2008, and reached full facility oil capacity after only 15 days of operations.
While the production did not have an impact on the second quarter results, the
field is currently producing from five wells and the sixth well is expected
online in early August. Marathon holds a 30 percent outside-operated working
interest in Neptune. The facility's design capacity is 50,000 bpd of oil and
50 mmcfd of natural gas.
Marathon continues to ramp up production in the Bakken Shale resource play
in North Dakota. The Company currently has seven rigs drilling which are
achieving best-in-class drilling performance and continue to improve drilling
time and well costs. Marathon expects to drill approximately 65 company-
operated Bakken wells in 2008, and will have approximately 100 wells in the
play by the end of the year. The Company's net production from the Bakken
Shale increased 130 percent from the fourth quarter 2007 rate of 2,170 boepd
to the second quarter of 2008 rate of 5,070 boepd, and is currently producing
6,200 boepd.
Offshore Angola, Marathon and its co-venturers received approval to
proceed with the first deepwater oil development project on Block 31,
comprised of the Plutao, Saturno, Venus and Marte (PSVM) fields. Key contracts
are ready to be awarded and construction work is expected to begin later this
year. Gross production at a rate of about 150,000 bpd is targeted in 2012. A
total of 48 production, gas and water injection plus infill wells are planned
for PSVM.
Marathon has participated in three deepwater Angola exploration/appraisal
wells that have reached total depth during the year, but for which disclosure
of the results is pending receipt of government and partner approvals. The
Company is also currently participating in an appraisal well on Block 32.
Marathon holds a 10 percent outside-operated interest in Block 31 and a 30
percent outside-operated interest in Block 32.
In early July, Marathon entered into a definitive agreement with Centrica
plc, the parent company of British Gas, under which Centrica will purchase
Marathon's non-operated interests in the Heimdal infrastructure, related
producing fields and associated undeveloped acreage offshore Norway. Total
proceeds before closing adjustments are expected to be $416 million. The
companies anticipate closing the transaction during the late third quarter or
early fourth quarter of 2008.
Oil Sands Mining
The Oil Sands Mining segment reported a loss of $157 million for the
second quarter of 2008. This includes a $250 million after-tax loss on
derivative instruments, of which $220 million was unrealized. These derivative
instruments were put in place by Western Oil Sands Inc. prior to its
acquisition by Marathon in October 2007 to mitigate price risk related to
future sales of synthetic crude oil. The last of these derivative instruments
is set to expire in the fourth quarter of 2009.
Marathon's second quarter 2008 net bitumen production before royalties
from the Athabasca Oil Sands Project (AOSP) mining operation was 24,000 bpd.
Production was lower than expected due to a revised plan to manage the
disposal of tailings that resulted in mining a lower grade ore, as well as
planned and unplanned maintenance at the mine. (Tailings consist primarily of
water and sediment that remain after the bitumen is extracted from the ore.)
Due in large part to the temporary decrease in ore grade, Marathon has
reduced its 2008 Oil Sands Mining production expectations to between 25,000
and 28,000 boepd.

2nd Quarter Ended June 30
2008 2007
Key Oil Sands Mining Statistics
Net Bitumen Production (mbpd)(a) 24 -
Net Synthetic Crude Oil Sales (mbpd) 31 -
Synthetic Crude Oil Average Realization
(per bbl)(b) $116.40 $-

(a) Before royalties.
(b) Excludes losses on derivative instruments.

Refining, Marketing and Transportation
The Refining, Marketing and Transportation (RM&T) segment income was $158
million in the second quarter of 2008 compared to $1.246 billion in the second
quarter of 2007, with the decrease primarily a result of the lower refining
and wholesale marketing gross margin.
The refining and wholesale marketing gross margin per gallon was 8.35
cents in the second quarter of 2008, compared to 39.25 cents in the second
quarter of 2007. The primary factor contributing to this decrease was the
decline in the relevant market indicators [Light Louisiana Sweet (LLS) 6-3-2-1
crack spreads] in the Midwest (Chicago) and Gulf Coast markets. For example,
the Light Louisiana Sweet (LLS) 6-3-2-1 crack spread on a two-thirds Chicago,
one-third Gulf Coast basis decreased to $2.47 per barrel in second quarter
2008 from $15.47 per barrel in second quarter 2007. In addition, the Company
was not able to fully pass along to its wholesale customers the substantial
increase in refined product spot market prices experienced in the second
quarter of 2008. Consequently, the Company's wholesale price realizations in
the second quarter did not increase over the comparable prior year period as
much as the spot market prices used in the market indicators increased quarter
over quarter.
Crude oil refined during the second quarter of 2008 averaged 1,023,000
bpd, a 49,000 bpd decrease from the second quarter of 2007, and total refinery
throughputs were 1,203,000 bpd, 6 percent lower than the 1,280,000 bpd in the
second quarter of 2007.
Marathon's refining and wholesale marketing gross margin included pre-tax
derivatives losses of $187 million for the second quarter of 2008 compared to
losses of $139 million for the second quarter of 2007. In the second quarter
of 2008, Marathon decreased its use of derivatives to mitigate crude oil price
risk between the time that domestic crude oil purchases are priced and when
they are actually refined into salable petroleum products. Approximately half
of the losses recognized in the second quarter of 2008 were incurred in April
before these steps to decrease the use of derivatives were fully in place.
Marathon will selectively continue its practice of using derivatives to
protect the carrying value of seasonal RM&T inventories and long-haul foreign
crude oil spot purchases.
Speedway SuperAmerica (SSA) gasoline and distillates gross margin per
gallon averaged 8.62 cents in the second quarter of 2008, compared to 10.29
cents in the second quarter of 2007. SSA same store gasoline sales volume
declined by 4.8 percent during the second quarter of 2008 while same store
merchandise sales increased by 1 percent during the same period. Starting in
June 2007, SSA ran a special sales promotion that was estimated to increase
SSA's 2007 second quarter same store gasoline sales volume by almost 3
percent. Excluding this special sales promotion, the Company estimates that
SSA's 2008 second quarter same store gasoline sales volume decline would have
been about 2.1 percent compared to the actual 4.8 percent decline.

2nd Quarter Ended June 30
2008 2007
Key Refining, Marketing & Transportation Statistics
Crude Oil Refined (mbpd) 1,023 1,072
Other Charge and Blend Stocks (mbpd) 180 208
Total Refinery Inputs (mbpd) 1,203 1,280
Refined Product Sales Volumes (mbpd) 1,369 1,426
Refining and Wholesale Marketing Gross Margin
($/gallon) $0.0835 $0.3925

In June 2008, Marathon began construction on the projected $1.9
billionDetroit heavy oil upgrading project. With expected completion in late
2010,
the project will increase the refinery's ability to process heavy crude oil by
80,000 bpd.
The projected $3.2 billionGaryville refinery expansion project in
Louisiana continues to progress on time and on budget toward a 2009 start-up.
Integrated Gas
Integrated Gas segment income was $102 million in the second quarter of
2008 compared to $12 million in the second quarter of 2007. The increase was
primarily related to income from the Equatorial Guinea LNG production facility
which commenced operations in May 2007. The production facility, in which
Marathon holds a 60 percent interest, delivered 14 cargoes during the second
quarter of 2008. Expenses for Gas-to-Fuels(TM) and other natural gas
commercialization technologies in the second quarter of 2008 were $22 million
compared to $10 million in the second quarter of 2007.

2nd Quarter Ended June 30
2008 2007
Key Integrated Gas Statistics
Net Sales (mtpd)
LNG 6,402 1,997
Methanol 1,188 1,107

Net LNG sales for the second quarter of 2008 exceeded original estimates
because the planned maintenance at the Equatorial Guinea LNG production
facility originally scheduled for the second quarter was deferred to the third
quarter. The operational availability of the facility has been superior,
operating at 93 percent year-to-date.
Corporate
Marathon continued its share repurchase program during the second quarter,
repurchasing approximately 3 million shares at a cost of approximately $152
million. Since January 2006, Marathon's Board of Directors has authorized the
repurchase of up to $5 billion of Marathon's common stock. As of the end of
the second quarter, approximately $2.8 billion in Marathon shares had been
repurchased, bringing total shares repurchased so far to 63.6 million.
Special Items
Marathon has two natural gas sales contracts in the United Kingdom that
are accounted for as derivative instruments. Mark-to-market changes in the
valuation of these contracts must be recognized in current period income. In
the second quarter of 2008, the non-cash after-tax mark-to-market loss on
these contracts related to sales of natural gas from the Brae field complex
totaled $84 million. Due to the volatility in the fair value of these
contracts, Marathon consistently excludes these non-cash gains and losses from
net income adjusted for special items.
The Company will conduct a conference call and webcast today, July 31, at
2:00 p.m. EDT during which it will discuss second quarter results. The webcast
will include synchronized slides. To listen to the webcast of the conference
call and view the slides, visit the Marathon website at www.Marathon.com.
Replays of the webcast will be available through Aug. 14, 2008. Quarterly
financial and operational information is also provided on Marathon's Web site
at http://ir.marathon.com in the Quarterly Investor Packet.
In addition to net income determined in accordance with generally accepted
accounting principles, Marathon has provided supplementally "net income
adjusted for special items," a non-GAAP financial measure which facilitates
comparisons to earnings forecasts prepared by stock analysts and other third
parties. Such forecasts generally exclude the effects of items that are
considered non-recurring, are difficult to predict or to measure in advance or
that are not directly related to Marathon's ongoing operations. A
reconciliation between GAAP net income and "net income adjusted for special
items" is provided in a table previously in this release. "Net income
adjusted for special items" should not be considered a substitute for net
income as reported in accordance with GAAP. Management, as well as certain
investors, uses "net income adjusted for special items" to evaluate Marathon's
financial performance between periods. Management also uses "net income
adjusted for special items" to compare Marathon's performance to certain
competitors.
Unlike capital expenditures reported under generally accepted accounting
principles, the projected costs for the Garyville refinery expansion project
and the Detroit refinery heavy oil upgrading and expansion project discussed
in this release do not include capitalized interest. Capitalized interest is
budgeted at the corporate level.
This release contains forward-looking statements with respect to 2008
worldwide net liquid hydrocarbon and natural gas production available for
sale, bitumen production, timing and levels of production from the
Alvheim/Vilje development and Neptune development, Blocks 31 and 32 offshore
Angola, the anticipated disposition of interests in the Heimdal area and
related assets, anticipated future exploratory and development drilling
activity, the Garyville refinery expansion project, the Detroit refinery heavy
oil upgrading and expansion project, and the common stock repurchase program.
Some factors that could potentially affect 2008 worldwide net liquid
hydrocarbon and natural gas production available for sale, bitumen production,
the timing and levels of production from the Alvheim/Vilje development and
Neptune development, Blocks 31 and 32 offshore Angola, and anticipated future
exploratory and development drilling activity include pricing, supply and
demand for petroleum products, the amount of capital available for exploration
and development, regulatory constraints, timing of commencing production from
new wells, drilling rig availability, unforeseen hazards such as weather
conditions, acts of war or terrorist acts and the governmental or military
response thereto, and other geological, operating and economic considerations.
Worldwide net liquid hydrocarbon and natural gas production available for sale
could also be affected by the occurrence of acquisitions or dispositions of
oil and gas properties. Development of Block 32 may be further affected by the
inability or delay in obtaining government and third-party approvals and
permits. The disposition of interests in the Heimdal area could be adversely
affected by the inability or delay in obtaining necessary government and third
party approvals and other customary closing conditions. Factors that could
affect the Garyville refinery expansion and the Detroit refinery heavy oil
upgrading and expansion projects include transportation logistics,
availability of materials and labor, unforeseen hazards such as weather
conditions, delays in obtaining or conditions imposed by necessary government
and third-party approvals, and other risks customarily associated with
construction projects. The common stock repurchase program could be affected
by changes in prices of and demand for crude oil, natural gas and refined
products, actions of competitors, disruptions or interruptions of the
Company's production or refining operations due to unforeseen hazards such as
weather conditions or acts of war or terrorist acts, and other operating and
economic considerations. The foregoing factors (among others) could cause
actual results to differ materially from those set forth in the forward-
looking statements. In accordance with the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995, Marathon Oil Corporation has
included in its Annual Report on Form 10-K for the year ended December 31,
2007, and subsequent Forms 10-Q and 8-K, cautionary language identifying other
important factors, though not necessarily all such factors, that could cause
future outcomes to differ materially from those set forth in the forward-
looking statements.

Media Relations Contacts: Lee Warren 713-296-4103
Paul Weeditz 713-296-3910
Investor Relations Contacts: Howard Thill 713-296-4140
Michol Ecklund 713-296-3919
Chris Phillips 713-296-3213

Condensed Consolidated Statements of Income (Unaudited)

2nd Quarter Ended Six Months Ended
June 30 June 30
(In millions, except per share data) 2008 2007 2008 2007
Revenues and other income:
Sales and other operating revenues
(including consumer excise taxes) $21,226 16,325 $38,506 $28,874
Sales to related parties 686 411 1,228 731
Income from equity method investments 256 117 465 224
Net gain on disposal of assets 12 7 22 18
Other income 45 27 104 42
Total revenues and other income 22,225 16,887 40,325 29,889

Costs and expenses:
Cost of revenues (excludes items
below) 17,988 11,804 32,440 21,407
Purchases from related parties 226 89 365 136
Consumer excise taxes 1,295 1,307 2,511 2,504
Depreciation, depletion and
amortization 504 396 955 789
Selling, general and administrative
expenses 361 327 661 614
Other taxes 127 93 250 191
Exploration expenses 130 115 259 176
Total costs and expenses 20,631 14,131 37,441 25,817

Income from operations 1,594 2,756 2,884 4,072
Net interest and other financing
income (costs) (10) 20 (1) 39
Loss on early extinguishment of debt - (1) - (3)
Minority interests in loss of
Equatorial Guinea
LNG Holdings Limited - 1 - 3

Income before income taxes 1,584 2,776 2,883 4,111
Provision for income taxes 810 1,234 1,378 1,852
Income from continuing operations 774 1,542 1,505 2,259
Discontinued operations - 8 - 8

Net income $774 $1,550 $1,505 $2,267

Income from continuing operations
Per share - basic $1.09 $2.26 $2.11 $3.29
Per share - diluted $1.08 $2.24 $2.10 $3.27
Net income
Per share - basic $1.09 $2.27 $2.11 $3.30
Per share - diluted $1.08 $2.25 $2.10 $3.28
Dividends paid per share $0.24 $0.24 $0.48 $0.44
Weighted Average Shares:
Basic 710 683 711 686
Diluted 714 689 716 691

Preliminary Supplemental Statistics (Unaudited)

2nd Quarter Ended Six Months Ended
June 30 June 30
(Dollars in millions, except as noted) 2008 2007 2008 2007
Segment Income (Loss)
Exploration and Production
United States $359 $173 $603 $323
International 469 227 909 462
E&P segment 828 400 1,512 785
Oil Sands Mining (157) - (130) -
Refining, Marketing and Transportation 158 1,246 83 1,591
Integrated Gas 102 12 201 31
Segment income 931 1,658 1,666 2,407
Items not allocated to segments, net
of income taxes:
Corporate and other unallocated
items (73) (111) (41) (154)
Discontinued operations - 8 - 8
Gain (loss) on U.K. natural gas
contracts (84) (5) (120) 6
Net income $774 $1,550 $1,505 $2,267

Capital Expenditures
Exploration and Production $874 $580 $1,649 $1,041
Oil Sands Mining 262 - 510 -
Refining, Marketing and Transportation 702 334 1,213 551
Integrated Gas(a) - 34 1 91
Corporate 7 14 9 16
Total $1,845 $962 $3,382 $1,699

Exploration Expenses
United States $55 $47 $105 $84
International 75 68 154 92
Total $130 $115 $259 $176

E&P Operating Statistics
Net Liquid Hydrocarbon Sales (mbpd)(b)
United States 63 65 63 67
Europe 38 34 31 34
Africa 81 100 92 98
Total International 119 134 123 132
Worldwide 182 199 186 199

Net Natural Gas Sales (mmcfd)(b)(c)
United States 431 460 456 485
Europe 175 178 214 213
Africa 398 196 396 143
Total International 573 374 610 356
Worldwide 1,004 834 1,066 841

Total Worldwide Sales (mboepd) 350 338 364 339

(a) Through April 2007, includes EGHoldings at 100 percent. Effective
May 1, 2007, Marathon no longer consolidates EGHoldings and its
investment in EGHoldings is accounted for prospectively using the
equity method of accounting; therefore, EGHoldings' capital
expenditures subsequent to April 2007 are not included in Marathon's
capital expenditures.
(b) Amounts are net after royalties, except for Ireland where amounts are
before royalties.
(c) Includes natural gas acquired for injection and subsequent resale of
25 mmcfd and 54 mmcfd in the second quarters of 2008 and 2007 and 31
mmcfd and 47 mmcfd in the first six months of 2008 and 2007.

Preliminary Supplemental Statistics (Unaudited)
(continued)

2nd Quarter Ended Six Months Ended
June 30 June 30
(Dollars in millions, except as noted) 2008 2007 2008 2007
E&P Operating Statistics (continued)
Average Realizations(d)
Liquid Hydrocarbons (per bbl)
United States $109.85 $55.19 $96.96 $52.19
Europe $121.96 $61.34 $111.54 $59.12
Africa $108.70 $60.91 $98.33 $55.79
Total International $112.99 $61.02 $101.66 $56.63
Worldwide $111.90 $59.11 $100.07 $55.13

Natural Gas (per mcf)
United States $8.66 $6.16 $7.70 $6.03
Europe $7.86 $4.47 $7.82 $5.71
Africa $0.25 $0.25 $0.25 $0.26
Total International $2.58 $2.27 $2.90 $3.51
Worldwide $5.19 $4.41 $4.95 $4.96

OSM Operating Statistics
Net Bitumen Production (mbpd)(e) 24 - 24 -
Net Synthetic Crude Sales (mbpd)(e) 31 - 31 -
Synthetic Crude Average Realization
(per bbl)(d) $116.40 $- $102.70 $-

RM&T Operating Statistics
Refinery Runs (mbpd)
Crude oil refined 1,023 1,072 934 1,021
Other charge and blend stocks 180 208 207 217
Total 1,203 1,280 1,141 1,238
Refined Product Yields (mbpd)
Gasoline 607 680 604 651
Distillates 367 377 326 350
Propane 23 26 22 23
Feedstocks and special products 116 96 108 121
Heavy fuel oil 23 27 27 25
Asphalt 86 89 73 83
Total 1,222 1,295 1,160 1,253
Refined Product Sales Volumes
(mbpd)(f) 1,369 1,426 1,324 1,385
Refining and Wholesale Marketing
Gross Margin (per gallon)(g) $0.0835 $0.3925 $0.0420 $0.2634
Speedway SuperAmerica
Retail outlets 1,625 1,637 - -
Gasoline & distillates sales
(millions of gallons) 788 828 1,580 1,628
Gasoline & distillates gross
margin (per gallon) $0.0862 $0.1029 $0.1005 $0.1121
Merchandise sales $722 $714 $1,369 $1,358
Merchandise gross margin $181 $182 $344 $342

IG Operating Statistics
Sales Volumes (mtpd)(h)
LNG 6,402 1,997 6,657 1,582
Methanol 1,188 1,107 1,159 1,215

(d) Excludes gains and losses on derivative instruments (including the
unrealized effects of U.K. natural gas sales contracts that are
accounted for as derivatives).
(e) Amount is before royalties.
(f) Total average daily volumes of all refined product sales to wholesale,
branded and retail customers.
(g) Sales revenue less cost of refinery inputs, purchased products and
manufacturing expenses, including depreciation.
(h) LNG sales volumes include both consolidated sales (Alaska) and our
share of the sales of an equity method investee (Equatorial Guinea).
Methanol sales volumes represent our share of sales of an equity
method investee in Equatorial Guinea.

SOURCE Marathon Oil Corporation

Media Relations: Lee Warren, +1-713-296-4103, Paul Weeditz, +1-713-296-3910,
or Investor Relations Contacts: Howard Thill, +1-713-296-4140, Michol Ecklund,
+1-713-296-3919, Chris Phillips, +1-713-296-3213, all of Marathon Oil
Corporation