Analysis of Geographic Areas
Marathon Oil Corp. operates in 3 regions: United States; Equatorial Guinea; and Other international.
Area Asset Turnover
Marathon Oil Corp., asset turnover by geographic area
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| United States | 0.38 | 0.19 | 0.28 | 0.30 | 0.19 |
| Equatorial Guinea | 0.34 | 0.20 | 0.27 | 0.29 | 0.34 |
| Other international | — | — | — | 5.18 | 0.79 |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
The analysis of area asset turnover reveals divergent performance patterns across the different geographic operating segments between 2017 and 2021.
- United States Operations
- The asset turnover ratio in the United States exhibited significant volatility over the period. An initial increase from 0.19 in 2017 to 0.30 in 2018 was followed by a gradual decline, returning to 0.19 by 2020. A sharp recovery occurred in 2021, with the ratio reaching a five-year peak of 0.38.
- Equatorial Guinea Operations
- A consistent downward trend was observed from 2017 through 2020, as the ratio decreased from 0.34 to 0.20. This decline was reversed in 2021, when the ratio returned to its 2017 level of 0.34.
- Other International Operations
- This segment showed the most extreme variance in the early part of the period, with the ratio increasing from 0.79 in 2017 to 5.18 in 2018. No values are recorded for this segment for the remaining three years of the analysis.
Comparative observation indicates that 2020 served as a trough for both the United States and Equatorial Guinea segments, suggesting a widespread reduction in asset efficiency during that year, followed by a synchronized improvement in 2021.
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Area Asset Turnover: United States
Marathon Oil Corp.; United States; area asset turnover calculation
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Revenues from contracts with customers | 5,334) | 2,924) | 4,602) | 4,886) | 3,086) |
| Long-lived assets | 14,152) | 15,224) | 16,507) | 16,094) | 15,971) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 0.38 | 0.19 | 0.28 | 0.30 | 0.19 |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Area asset turnover = Revenues from contracts with customers ÷ Long-lived assets
= 5,334 ÷ 14,152 = 0.38
The financial performance within the United States region exhibits significant volatility in revenue generation, while the asset base remained relatively stable before entering a period of contraction. The overall efficiency of asset utilization, as measured by the area asset turnover ratio, peaked in 2021, coinciding with a recovery in revenues and a reduction in long-lived assets.
- Revenues from contracts with customers
- Revenue experienced substantial fluctuations over the five-year period. Following an initial increase from 3,086 million US$ in 2017 to 4,886 million US$ in 2018, a significant decline occurred in 2020, reaching a low of 2,924 million US$. However, a strong recovery was recorded by December 31, 2021, with revenues reaching a period high of 5,334 million US$.
- Long-lived assets
- The asset base showed a slight upward trend from 2017 to 2019, peaking at 16,507 million US$. From 2020 onward, a downward trend emerged, with assets decreasing to 14,152 million US$ by the end of 2021. This indicates a reduction in the capital base during the final two years of the analyzed period.
- Area asset turnover
- The turnover ratio closely mirrored the volatility of revenues. The ratio rose from 0.19 in 2017 to 0.30 in 2018, before returning to 0.19 in 2020. The most significant improvement occurred in 2021, where the ratio reached 0.38. This peak was driven by the simultaneous occurrence of the highest revenue and the lowest recorded level of long-lived assets, indicating a marked increase in the efficiency of asset utilization relative to sales generation.
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Area Asset Turnover: Equatorial Guinea
Marathon Oil Corp.; Equatorial Guinea; area asset turnover calculation
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Revenues from contracts with customers | 267) | 173) | 307) | 384) | 530) |
| Long-lived assets | 797) | 861) | 1,156) | 1,333) | 1,582) |
| Area Activity Ratio | |||||
| Area asset turnover1 | 0.34 | 0.20 | 0.27 | 0.29 | 0.34 |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Area asset turnover = Revenues from contracts with customers ÷ Long-lived assets
= 267 ÷ 797 = 0.34
Between 2017 and 2021, the financial performance in Equatorial Guinea was characterized by a significant contraction in both revenue generation and the long-lived asset base, followed by a recovery in operational efficiency in the final year.
- Revenue Trends
- Revenues from contracts with customers exhibited a consistent downward trajectory from 2017 to 2020, falling from 530 million US$ to a low of 173 million US$. A reversal of this trend occurred in 2021, with revenues increasing to 267 million US$, although this remained well below the 2017 baseline.
- Asset Base Evolution
- A continuous decline in long-lived assets is observed throughout the analyzed period. The asset value decreased annually, moving from 1,582 million US$ in 2017 to 797 million US$ by December 31, 2021. This represents a reduction of approximately 50% of the asset base over five years.
- Area Asset Turnover Analysis
- The area asset turnover ratio declined from 0.34 in 2017 to 0.20 in 2020, indicating that the reduction in revenue outpaced the reduction in assets during this interval. However, in 2021, the ratio rebounded to 0.34. This recovery suggests a marked increase in the efficiency of asset utilization, as the company generated higher revenues from a further diminished asset base.
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Area Asset Turnover: Other international
Marathon Oil Corp.; Other international; area asset turnover calculation
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Revenues from contracts with customers | —) | —) | 154) | 632) | 757) |
| Long-lived assets | —) | —) | —) | 122) | 959) |
| Area Activity Ratio | |||||
| Area asset turnover1 | — | — | — | 5.18 | 0.79 |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Area asset turnover = Revenues from contracts with customers ÷ Long-lived assets
= 0 ÷ 0 = —
The financial performance of the other international geographic area is characterized by a substantial contraction in both revenue generation and the asset base between 2017 and 2019.
- Revenue Trends
- Revenues from contracts with customers exhibited a consistent downward trajectory. A decrease from 757 million USD in 2017 to 632 million USD in 2018 was followed by a more precipitous drop to 154 million USD by the end of 2019, representing a significant reduction in the scale of operations within this segment.
- Long-Lived Asset Base
- A sharp reduction in long-lived assets occurred between 2017 and 2018, falling from 959 million USD to 122 million USD. This drastic contraction suggests a major divestment of assets or significant impairment charges within the international portfolio during that period.
- Area Asset Turnover Analysis
- The area asset turnover ratio increased markedly from 0.79 in 2017 to 5.18 in 2018. This spike is not indicative of improved operational efficiency or revenue growth, as revenues actually declined during the same period. Instead, the increase is mathematically driven by the aggressive reduction in the asset denominator, indicating that the remaining assets were supporting a disproportionately larger share of the remaining revenue.
Following 2019, there is an absence of reported financial metrics for this specific geographic area, suggesting a potential complete exit from these international operations or a restructuring of how these assets are reported.
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Revenues from contracts with customers
Marathon Oil Corp., revenues from contracts with customers by geographic area
US$ in millions
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| United States | 5,334) | 2,924) | 4,602) | 4,886) | 3,086) |
| Equatorial Guinea | 267) | 173) | 307) | 384) | 530) |
| Other international | —) | —) | 154) | 632) | 757) |
| Total | 5,601) | 3,097) | 5,063) | 5,902) | 4,373) |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
Total revenues from contracts with customers exhibited significant volatility between 2017 and 2021, characterized by a sharp contraction in 2020 followed by a robust recovery in 2021. There is a pronounced shift in the geographic composition of revenue, moving from a diversified international profile toward an almost exclusive reliance on United States operations.
- United States Revenue Trends
- Revenue within the United States showed a general upward trajectory over the five-year period, rising from 3,086 million US$ in 2017 to 5,334 million US$ in 2021. While a substantial decline occurred in 2020, where revenue dropped to 2,924 million US$, the subsequent recovery in 2021 represents the highest revenue level recorded for the domestic market during this timeframe.
- Equatorial Guinea Performance
- Revenues from Equatorial Guinea experienced a consistent downward trend from 2017 through 2020, falling from 530 million US$ to 173 million US$. A partial recovery was observed in 2021, with revenues increasing to 267 million US$, although this remains significantly below the levels seen at the start of the period.
- Other International Operations
- Revenues from other international sources declined sharply from 757 million US$ in 2017 to 154 million US$ in 2019. No revenues were reported for these geographic areas in 2020 or 2021, indicating a complete phase-out of revenue generation from these regions.
- Geographic Revenue Concentration
- A significant increase in domestic revenue concentration is observed. In 2017, United States operations accounted for approximately 70% of total revenue. By 2021, this proportion increased to approximately 95%, reflecting a strategic shift or operational contraction in international markets.
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Long-lived assets
Marathon Oil Corp., long-lived assets by geographic area
US$ in millions
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |
|---|---|---|---|---|---|
| United States | 14,152) | 15,224) | 16,507) | 16,094) | 15,971) |
| Equatorial Guinea | 797) | 861) | 1,156) | 1,333) | 1,582) |
| Other international | —) | —) | —) | 122) | 959) |
| Total | 14,949) | 16,085) | 17,663) | 17,549) | 18,512) |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
Between 2017 and 2021, total long-lived assets experienced an overall decline, falling from 18,512 million US$ to 14,949 million US$. This contraction is characterized by a steady reduction in international holdings and a more recent decrease in domestic assets following a peak in 2019.
- United States Asset Trends
- Domestic assets represent the vast majority of the total asset base. Values increased slightly from 15,971 million US$ in 2017 to a peak of 16,507 million US$ in 2019. Subsequently, a downward trend emerged, with assets decreasing to 15,224 million US$ in 2020 and further to 14,152 million US$ by the end of 2021.
- Equatorial Guinea Asset Trends
- A consistent year-over-year reduction in assets is observed in Equatorial Guinea. From a 2017 valuation of 1,582 million US$, assets declined steadily each year, reaching 797 million US$ by December 31, 2021. This represents a decrease of approximately 50% over the analyzed period.
- Other International Asset Trends
- Assets classified as other international experienced a sharp decline between 2017 and 2018, dropping from 959 million US$ to 122 million US$. No values were reported for this category from 2019 through 2021, indicating a complete exit or reclassification of these assets.
- Geographic Concentration
- The proportion of total long-lived assets concentrated in the United States increased over the five-year period. While the absolute value of US assets declined after 2019, the more rapid depletion of international assets resulted in a higher relative dependency on domestic operations.
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