5 questions with Marathon VP Howard J. Thill
BY ROD WALTON World Staff Writer
Friday, February 10, 2012
2/10/12 at 5:11 AM
Howard J. Thill is vice president of investor relations and public affairs for Marathon Oil Corp. in Houston. A Bartlesville native and Oklahoma State University graduate, he previously worked for Phillips Petroleum Co. and joined Marathon in 2002.
1. You recently ranked in the top three on both the buy and sell sides for the Institutional Investor magazine awards. How do you best juggle the interests of investors on both ends?
We spend a significant amount of time with both to help them better understand Marathon Oil Corp.
We draw heavily on our public disclosures such as press releases, SEC filings and public presentations.
The distinction between the two groups is that the buy-side investors are those who own or might purchase shares in the company in the future. The sell-side analysts are individuals who generally work for a bank and publish reports on companies analyzing their future prospects. Both groups model a company's historical performance and look for insights into how that performance may change in the future.
2. What is the most challenging aspect of investor relations at a major company such as Marathon Oil?
The toughest part is what keeps it so interesting, and I'd equate it to keeping multiple balls in the air: staying up with industry developments; participating in a dozen investor conferences a year; traveling extensively to meet investors in more than 20 cities worldwide annually, some multiple times a year; staying current on the company's projects; and answering dozens of investor inquiries a month by phone and email.
3. How would one prepare academically and professionally for such a job?
There are almost as many different ways to prepare as there are investor relations professionals. An understanding of your industry, company and, importantly, financial analysis are key components needed to be successful. Accounting, finance and engineering are some of the common academic paths to investor relations in oil and gas.
4. Marathon Oil was perhaps the first major integrated energy company to spin off its refining, marketing and transportation businesses into a separate company. With Williams Cos. Inc. recently spinning off WPX and ConocoPhillips separating its upstream and downstream sides soon, what is the attraction for these splits?
It really boils down to focus. A company's board and management can better focus on developing and executing their business plan as a more concentrated entity than they can as a conglomerate or vertically integrated company.
In turn, that focus provides investors better visibility into the business that otherwise may be less obvious as a part of a larger entity. A separation can also provide the ability to tailor more efficient capital structures.
5. Marathon recently set a $4.8 billion capital budget for 2012, most of that focused on U.S. resource plays such as the Eagle Ford, Anadarko Woodford, Niobrara and Bakken shale plays. Are most U.S. companies simply downsizing foreign ventures and, if so, how long will that trend continue?
Ten years ago, the question would have been around companies looking for more international opportunities and exiting the U.S. Breaking the shale code through horizontal drilling and hydraulic fracturing has been revolutionary to developing U.S. oil and gas resources. While this will result in many years of drilling for the industry domestically, international opportunities will still play a large part in portfolio development for many oil and gas companies.
Because of the vast sums of capital required and the difficulty in replacing reserves on a consistent basis, this is an industry that works on a five- to 15-year planning cycle. We don't have the luxury of resting on past accomplishments. To grow our business, we're always looking for the next opportunity, domestic or international.
Howard Thill stands beside a scale model of the Alvheim FPSO, a project in Norway that has the capacity to produce more than 150,000 barrels of oil per day. Courtesy