Marathon Oil Earnings Call Nuggets: Downspacing Scenario, Norway & Libya

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Marathon Oil Corp (NYSE:MRO) recently reported its second quarter earnings and discussed the following topics in its earnings conference call.

Downspacing Scenario

Doug Leggate – Bank of America Merrill Lynch: Lee, congratulations on your appointment. It seems a long time in stakes on Upstream Advisor, but two questions if I may. First of all on the Eagle Ford so you’re going to wait until December to give us downspacing results, but (indiscernible) purposes I guess EOG is very – and a lot of peers have pretty much already shown us what the asset can do. I guess my question is on downspacing scenario, you have 10-year drilling inventory. Is that an inventory that you would want to accelerate going forward or is the current drilling pace optimal in your mind and then I have a follow up, please?

Clarence P. Cazalot Jr. – Executive Chairman: Doug, this is Clarence and I think you are right that others are more advanced perhaps in their overall understanding of reservoir in terms of the potential for downspacing and recognizing that the geology does change a bit across even the core of the Eagle Ford. I think it’s important for us to do our diligence to do the right technical work, so we indeed can make the right capital allocation decisions as we indicated earlier. I will say part of what you will hear I believe in December will be spot on relative to your question which is the issue of acceleration, we all recognized the value of acceleration, but at the same time as we have spoken to you before, it’s very important that you not outrun certainly the capabilities to process, transport, market the hydrocarbon or indeed outrun the capabilities of the overall industry infrastructure, so I think what you will see from us is a plan that we believe optimizes the value of the resource we have there but does in an appropriate way and is at right pace.

Doug Leggate – Bank of America Merrill Lynch: Thanks for that, Clarence, and I apologize I should offer you congratulations as well and everything you’ve done here while you have been here. If I may my follow-up is I guess is to either of you two gentlemen, and in terms of the portfolio, Clarence, you are leaving the Company with a great deal of cash flow, tremendous balance sheet, but also an international declining asset base, and beyond the Eagle Ford, one could argue not a great deal of visibility. So I’m just kind of thinking about what’s the next part of the story for Marathon? Is there an acquisition story in terms of do you feel is if you have an inventory to sustain the current visibility, or do you see using that cash and I’ll leave it there?

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