Marathon Oil Corporation reported first quarter 2010 net income of $457 million, or $0.64 per diluted share. Net income in the first quarter of 2009 was $282 million, or $0.40 per diluted share. For the first quarter of 2010, net income adjusted for special items was $315 million, or $0.44 per diluted share, compared to net income adjusted for special items of $240 million, or $0.34 per diluted share, for the first quarter of 2009.

Exploration and Production (E&P) segment income totaled $502 million in the first quarter of 2010, comparedto $83 million in the first quarter of 2009. The increase was primarily a result of higher liquid hydrocarbonprice realizations.

E&P sales volumes during the quarter averaged 361,000 barrels of oil equivalent per day (boepd), comparedto 393,000 boepd for the same period last year. E&P production available for sale in the first quarter of 2010averaged 364,000 boepd, in line with previous guidance, compared to 419,000 boepd in the same period lastyear. The decrease from the prior year was primarily the result of a planned turnaround in Equatorial Guinea,the sale of a portion of the Company’s Permian Basin assets in the second quarter of 2009 and normalproduction declines. The difference between production volumes available for sale and recorded sales volumeswas due to the timing of international liftings, primarily in the U.K.

United States E&P reported income of $109 million for the first quarter of 2010, compared to a loss of $52million in the first quarter of 2009. The increase is primarily related to a 98 percent increase in liquidhydrocarbon realizations. Partially offsetting the increase were lower liquid hydrocarbon sales volumes fromthe Gulf of Mexico due to normal production declines and lower natural gas and liquid hydrocarbon salesvolumes realized due to the Permian Basin divestitures. Depreciation, depletion and amortization (DD&A)expense decreased approximately $35 million as a result of lower sales volumes.

International E&P income was $393 million in the first quarter of 2010, compared to $135 million in the firstquarter of 2009. This increase in income is primarily related to an 80 percent increase in liquid hydrocarbonrealizations and increased liquid hydrocarbon sales volumes from Europe. Partially offsetting the impact ofrealizations were increased exploration expenses.

In the North Dakota Bakken Shale play, the Company added approximately 14,000 net acres during the quarter, bringing its total acreage holdings to approximately 350,000 net acres. Marathon currently has four drilling rigs operating in the play, with plans to add a fifth during the second quarter. Current net production amounts to approximately 11,000 boepd, compared to 8,500 boepd at the end of the first quarter 2009.

Marathon was awarded three additional onshore exploration licenses with shale gas potential in Poland during the first quarter of 2010, and another in April, bringing its total number of licenses to seven and increasing its total acreage position to approximately 1.4 million net acres. Marathon has a 100 percent interest and is operator of all seven blocks. As previously stated, the Company is pursuing additional licenses in Poland. Marathon plans to begin geologic studies in Poland during 2010 followed by the acquisition of 2D seismic in 2011.

In March 2010, Marathon completed a reservoir study which resulted in a portion of its Powder River Basin field being removed from plans for future development. As a result, an after-tax impairment of $262 million was recognized in the first quarter of 2010.