8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): July 1, 2019

Marathon Oil Corporation

__________________________________________

(Exact name of registrant as specified in its charter)

Delaware	1-5153		25-0996816
_____________________  (State or other jurisdiction	_____________  (Commission		______________  (I.R.S. Employer
of incorporation)	File Number)		Identification No.)
5555 San Felipe Street, Houston, Texas			77056
_________________________________  (Address of principal executive offices)			___________  (Zip Code)
Registrant’s telephone number, including area code:		(713) 629-6600

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $1.00	MRO	New York Stock Exchange

Not Applicable

_____________________________________________

Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

	Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

Item 2.01 Completion of Acquisition or Disposition of Assets.

On July 1, 2019, Marathon Oil Corporation completed the sale of its subsidiaries in the United Kingdom (“U.K.”), Marathon Oil U.K. LLC and Marathon Oil West of Shetlands Limited (the “U.K. business”), to RockRose Energy PLC for proceeds of approximately $95 million, which reflects the assumption by the buyer of the U.K. business’ working capital and cash equivalent balances of approximately $345 million on December 31, 2018. The effective date of the transaction is January 1, 2019.

Item 7.01 Regulation FD Disclosure.

On July 1, 2019, Marathon Oil Corporation announced that it had completed the sale of its U.K. business. A copy of the press release is furnished as Exhibit 99.2 hereto. The information furnished pursuant to this Item 7.01, including Exhibit 99.2, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and will not be incorporated by reference into any filing under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.

Item 9.01 Financial Statements and Exhibits.

(b)    Pro Forma Information

The unaudited pro forma consolidated balance sheet of Marathon Oil Corporation as of March 31, 2019, and the unaudited pro forma consolidated statements of income of Marathon Oil Corporation for the three months ended March 31, 2019 and for the year ended December 31, 2018 are included as Exhibit 99.1 to this report and are incorporated into this Item 9.01 by reference.

(d)    Exhibits

Number	Exhibit
99.1	Unaudited Pro Forma Consolidated Financial Statements of Marathon Oil Corporation
99.2	Press Release issued by Marathon Oil Corporation, dated July 1, 2019

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

July 3, 2019	Marathon Oil Corporation
	By:	/s/ Gary E. Wilson
		Name: Gary E. Wilson
		Title: Vice President, Controller and Chief Accounting Officer

EX-99.1

Exhibit 99.1

MARATHON OIL CORPORATION

UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

On July 1, 2019, Marathon Oil Corporation (“Marathon”) completed the sale of its U.K. business to RockRose Energy PLC for proceeds of approximately $95 million, which reflects the assumption by the buyer of the U.K. business’ working capital and cash equivalent balances of approximately $345 million on December 31, 2018. The effective date of the transaction is January 1, 2019.

The unaudited pro forma consolidated financial data was derived from Marathon’s historical consolidated financial statements. The unaudited pro forma consolidated balance sheet assumes the disposition of the U.K. business occurred on March 31, 2019. The unaudited pro forma consolidated statements of income give effect to the disposition of the U.K. business as if the disposition occurred on January 1, 2018. The following unaudited pro forma consolidated financial information should be read in conjunction with the Company’s historical financial statements and notes.

The pro forma adjustments are based on the best information available and assumptions that management believes are factually supportable and reasonable; however, such adjustments are estimates and subject to change. The unaudited pro forma consolidated information is not intended to reflect what Marathon’s consolidated financial position and results of operations would have been had the disposition occurred on the dates indicated and is not necessarily indicative of our future consolidated financial position and results of operations.

The pro forma adjustments remove all of the assets, liabilities and results of operations of the U.K. business, and give effect to various adjustments including cash proceeds and gain from the sale of the U.K. business.

MARATHON OIL CORPORATION
PRO FORMA CONSOLIDATED STATEMENT OF INCOME (Unaudited)
For the Three Months Ended March 31, 2019
(In millions, except per share data)	Historical			Pro Forma Adjustments				Pro Forma
Revenues and other income:
Revenues from contracts with customers	$	1,200		$	(73	)	(a)	$	1,127
Net loss on commodity derivatives	(91		)	—				(91		)
Income from equity method investments	11			—				11
Net gain (loss) on disposal of assets	42			—				42
Other income	35			11			(b)	46
Total revenues and other income	1,197			(62		)		1,135
Costs and expenses:
Production	187			(28		)	(a)	159
Shipping, handling and other operating	154			(11		)	(a)	143
Exploration	59			—				59
Depreciation, depletion and amortization	554			(14		)	(a)	540
Impairments	6			—				6
Taxes other than income	72			—				72
General and administrative	94			(1		)	(a)(c)	93
Total costs and expenses	1,126			(54		)		1,072
Income (loss) from operations	71			(8		)		63
Net interest and other	(49		)	—				(49		)
Other net periodic benefit costs	5			(2		)	(d)	3
Income (loss) before income taxes	27			(10		)		17
Provision (benefit) for income taxes	(147		)	20			(a)(e)	(127		)
Net income (loss)	$	174		$	(30	)		$	144
Net income (loss) per share:
Basic	$	0.21						$	0.18
Diluted	$	0.21						$	0.18
Weighted average common shares outstanding:
Basic	819							819
Diluted	820							820

MARATHON OIL CORPORATION
PRO FORMA CONSOLIDATED STATEMENT OF INCOME (Unaudited)
For the Year Ended December 31, 2018
(In millions, except per share data)	Historical			Pro Forma Adjustments				Pro Forma
Revenues and other income:
Revenues from contracts with customers	$	5,902		$	(360	)	(a)	$	5,542
Net loss on commodity derivatives	(14		)	—				(14		)
Income from equity method investments	225			—				225
Net gain (loss) on disposal of assets	319			—				319
Other income	150			(122		)	(a)(b)	28
Total revenues and other income	6,582			(482		)		6,100
Costs and expenses:
Production	842			(122		)	(a)	720
Shipping, handling and other operating	575			(46		)	(a)	529
Exploration	289			—				289
Depreciation, depletion and amortization	2,441			(70		)	(a)	2,371
Impairments	75			—				75
Taxes other than income	299			—				299
General and administrative	394			(3		)	(a)(c)	391
Total costs and expenses	4,915			(241		)		4,674
Income (loss) from operations	1,667			(241		)		1,426
Net interest and other	(226		)	—				(226		)
Other net periodic benefit costs	(14		)	(6		)	(d)	(20		)
Income (loss) before income taxes	1,427			(247		)		1,180
Provision (benefit) for income taxes	331			(142		)	(a)	189
Net income (loss)	$	1,096		$	(105	)		$	991
Net income (loss) per share:
Basic	$	1.30						$	1.17
Diluted	$	1.29						$	1.17
Weighted average common shares outstanding:
Basic	846							846
Diluted	847							847

See accompanying notes to the unaudited pro forma consolidated financial statements.

MARATHON OIL CORPORATION
PRO FORMA CONSOLIDATED BALANCE SHEET (UNAUDITED)
As of March 31, 2019
(In millions, except par value and share amounts)	Historical			Pro Forma Adjustments				Pro Forma
Assets
Current assets:
Cash and cash equivalents	$	1,019		$	94		(f)	$	1,113
Receivables, less reserve of $12	1,086			—				1,086
Inventories	83			—				83
Other current assets	160			—				160
Current assets held for sale	428			(409		)	(g)	19
Total current assets	2,776			(315		)		2,461
Equity method investments	719			—				719
Property, plant and equipment less accumulated depreciation, depletion and amortization of $17,669	16,714			—				16,714
Goodwill	97			—				97
Other noncurrent assets	440			—				440
Noncurrent assets held for sale	664			(636		)	(g)	28
Total assets	$	21,410		$	(951	)		$	20,459
Liabilities
Current liabilities:
Accounts payable	$	1,310		$	6		(h)	$	1,316
Payroll and benefits payable	76			—				76
Accrued taxes	149			—				149
Other current liabilities	220			6			(i)	226
Current liabilities held for sale	103			(101		)	(g)	2
Total current liabilities	1,858			(89		)		1,769
Long-term debt	5,501			—				5,501
Deferred tax liabilities	192			—				192
Defined benefit postretirement plan obligations	179			—				179
Asset retirement obligations	192			—				192
Deferred credits and other liabilities	317			—				317
Noncurrent liabilities held for sale	963			(953		)	(g)	10
Total liabilities	9,202			(1,042		)		8,160
Commitments and contingencies
Stockholders’ Equity
Preferred stock - no shares issued or outstanding (no par value, 26 million shares authorized)	$	—		$	—			$	—
Common stock:
Issued – 937 million shares (par value $1 per share, 1.925 billion shares authorized)	937			—				937
Held in treasury, at cost – 117 million shares	(3,745		)	—				(3,745		)
Additional paid-in-capital	7,149			—				7,149
Retained earnings	7,808			51			(j)	7,859
Accumulated other comprehensive income	59			40			(k)	99
Total stockholders’ equity	12,208			91				12,299
Total liabilities and stockholders’ equity	$	21,410		$	(951	)		$	20,459

See accompanying notes to the unaudited pro forma consolidated financial statements.

MARATHON OIL CORPORATION

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

(a) Amounts reflect the pro forma effect of eliminating the results of operations of the U.K. business.

(b) Represents adjustment as a result of the reduction of our U.K. asset retirement obligations.

(c) Represents general and administrative costs related to the U.K. business removing the impact of corporate allocation costs.

(d) Represents pension related costs for our U.K. employees.

(e) Includes a non-cash deferred tax benefit of $18 million related to an internal restructuring for the U.K.

(f) Primarily from the sale of the U.K. business.

(g) These adjustments reflect the elimination of assets and liabilities attributable to the U.K. business which were treated as held for sale in the balance sheet.

(h) Primarily represents previously recorded intercompany balances which became third party upon completion of the sale of the U.K. business and closing costs payable by Marathon.

(i) Represents the estimated fair value of a guarantee which resulted from the disposition of our U.K. business.

(j) Primarily includes the gain on sale that would have been recorded as of March 31, 2019. Due to a tax exemption available in the U.K., no income tax was recorded on the transaction.

(k)    Primarily represents the actuarial loss in the postretirement and postemployment plans for the U.K. employees.

EX-99.2

Exhibit 99.2

Marathon Oil Closes on Sale of U.K. Business

HOUSTON, July 1, 2019 -- Marathon Oil Corporation (NYSE: MRO) announced today the company has closed on the sale of its U.K. business, which consists of the Brae area fields and Foinaven, to RockRose Energy PLC. The transaction represents a complete country exit for Marathon Oil.

Final terms of the transaction resulted in consideration payable to a subsidiary of Marathon Oil of approximately $95 million, which reflects the assumption by the buyer of the U.K. business’ working capital and cash equivalent balances of approximately $345 million on Dec. 31, 2018. The transaction has an effective date of Jan. 1, 2019.

At year-end 2018, the Company carried 21.4 million oil equivalent barrels of proved reserves in the U.K., and 2018 production averaged approximately 13,000 barrels of oil equivalent per day.

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This release 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 forward-looking statements are also affected by the risk factors, forward-looking statements and challenges and uncertainties described in the Company’s 2018 Annual Report on Form 10-K and other public filings and press releases, available atwww.marathonoil.com.

Media Relations Contact:

Lee Warren: 713-296-4103

Investor Relations Contact:

Guy Baber: 713-296-1892