Annual Report and Proxy
Dear fellow shareholders,
2018 was a year of differentiated execution for Marathon Oil. While many in our industry talked about capital discipline, we delivered.
We budgeted conservatively in 2018, and never wavered. We drove significant improvement to our corporate returns and cash flow per debt adjusted share. Our teams meaningfully beat our initial oil production growth guidance through impressive capital efficiency gains across our portfolio, and achieved remarkable success in organically improving the quality of our inventory base through core extension efforts, especially in the Eagle Ford and Bakken.
Through improving capital efficiency we delivered more oil growth, generated $865 million of organic free cash flow post-dividend, and returned most of that cash back to you, our shareholders, via share repurchases. Over 25% of our 2018 net operating cash flow was returned to shareholders through the combination of our dividend and repurchases.
We know investors today are looking for companies that have the right portfolio of assets and the right strategy: putting returns first, generating sustainable free cash flow at conservative oil prices and sharing that cash flow with investors. You want to see companies that maintain a strong balance sheet to weather potential volatility, and companies that have the capability to execute on their commitments consistently. Our company priorities not only align with these criteria, but our performance in 2018 stands as our proof point.
As we turn to 2019 and beyond, Marathon Oil remains committed to this same framework for success. With the foundation of a peer leading balance sheet and the competitive advantages of our multi-basin portfolio, our 2019 capital program will drive improving corporate returns and generate organic free cash flow above $45 WTI post dividend. Importantly, while our 2019 free cash flow is robust across a broad range of commodity prices, we believe our outlook only improves into 2020.
We would like to thank all of our dedicated employees and contractors who made 2018 a year of such differentiated execution for our company. Our future has never been brighter since becoming an independent E&P.