Marathon Oil Provides Third Quarter 2006 Interim Update

Marathon Oil Corporation (NYSE: MRO) is providing information on market factors and operating conditions that occurred during the third quarter 2006 that could impact the Company's quarterly financial results. The market indicators and Company estimates noted below and in the attached schedule may differ significantly from actual results. The Company will report third quarter results on October 31, 2006.

Exploration and Production

Production sold during the third quarter is estimated to be approximately 360,000 barrels of oil equivalent per day (boepd). Revenues are reported based on production sold during the period and can vary from production available for sale primarily as a result of the timing of international crude oil liftings (sales).

Oil and natural gas production available for sale during the third quarter is expected to be approximately 350,000 boepd, within the previous third quarter guidance of 340,000 to 360,000 boepd.

The difference between the 350,000 boepd available for sale and the 360,000 boepd of estimated sales was primarily a result of the timing of international crude oil liftings. During the third quarter 2006, the Company lifted approximately 900,000 barrels in excess of third quarter production available for sale, primarily from West Africa. As a result, at the end of the third quarter, the Company was relatively balanced in its lifting position on a worldwide basis.

The West Texas Intermediate (WTI) crude oil market price indicator was relatively flat during the third quarter 2006 when compared to the second quarter 2006. Liquid hydrocarbon price realizations for July and August 2006 increased compared to second quarter realizations. While the Henry Hub natural gas market price indicators weakened during the third quarter, Marathon's domestic natural gas price realizations showed a small improvement in the first two months of the quarter. International gas realizations declined in the first two months of the quarter primarily reflecting seasonally lower spot natural gas prices in Europe. Marathon's actual crude oil and natural gas price realizations vary from market indicators primarily due to product quality and location differentials.

Estimated third quarter exploration expense is unchanged from past guidance, and is expected to be between $75 and $110 million. However, U.S. exploration expense is now estimated to be between $35 and $45 million, while international exploration expense is estimated to be $40 to $65 million.

Refining, Marketing and Transportation

Due to seasonality in the refining and marketing business, comparisons to the same period in the previous year provide the best indication of this business's profitability.

The Company currently projects that refined products sales volume will average about 1,435,000 barrels per day (bpd) in the third quarter 2006.

Effective April 1, 2006, Marathon adopted EITF Issue No. 04-13, "Accounting for Purchases and Sales of Inventory with the Same Counterparty." As a result, certain types of purchase and sales transactions previously reported separately in revenues and cost of revenues will be reported prospectively on a net basis in cost of revenues. As a result, Marathon's sales volumes in the current quarter are lower than the sales volumes reported for the same quarter last year. This change in reporting has no impact on reported income.

Market indicators for refining margins (crack spreads) in the Midwest (Chicago) and Gulf Coast weakened during the third quarter 2006, when compared with the third quarter 2005. However, primarily due to the fact that crude oil prices decreased in the third quarter 2006 versus increased in the same quarter last year, the Company projects its refining and wholesale marketing gross margin will be stronger during the third quarter of 2006 than the same quarter last year. The Company estimates its refining and wholesale marketing gross margin for the third quarter 2006 will be approximately the same as the gross margin realized during the second quarter 2006.

Crude oil refined during July and August 2006 averaged 1,029,000 bpd and is expected to be at approximately that level for the entire third quarter 2006. Total refinery throughputs for the third quarter 2006 are expected to be approximately the same as the 1,240,000 bpd average for July and August 2006. Speedway SuperAmerica LLC's gasoline and distillate gross margin averaged approximately $0.121 per gallon during July and August of 2006 and is expected to average approximately that level for the third quarter 2006.

Unallocated Administrative Expense and Other Information

Total pre-tax unallocated administrative expense for the quarter is expected to be approximately $80 to $90 million.

The overall corporate tax rate is expected to be approximately 46 to 48 percent. The tax rates for the Exploration and Production (E&P) and Refining, Marketing and Transportation (RM&T) segments are expected to be relatively in- line with those realized during the second quarter 2006; E&P is expected to record approximately a 50 to 52 percent tax rate, with RM&T and Integrated Gas both estimated to record approximately 38 to 39 percent tax rates.

The Company continued its $2 billion share repurchase program during the quarter, reducing the quarterly average fully diluted share count to an estimated 360 million common shares outstanding for the period. The Company purchased approximately 7.1 million shares of its common stock during the third quarter, at a cost of approximately $600 million. Year-to-date, the Company has repurchased approximately 14.7 million shares at a total cost of approximately $1.2 billion.