Marathon Oil announce 2014 Capital, Investment and Exploration Budget

Marathon Oil announce 2014 Capital, Investment and Exploration Budget

The Company announced a $5.9 billion capital, investment and exploration budget for 2014, more than 60 percent of which is directed toward the Company’s high-growth, liquids-rich North America resource play assets.

Marathon Oil’s capital allocation seeks to fund the highest-value opportunities within the portfolio. Organic reinvestment to profitably grow volumes and focused exploration to capture new resource for future growth are the primary uses of capital. Within these two broad categories, Marathon Oil has a solid portfolio of conventional oil and gas and oil sands mining assets that generates significant cash flow; a defined set of North America resource play assets that provide low-risk, profitable growth; and a risk-balanced exploration program targeting significant value creation. From this disciplined capital allocation, the Company expects 2014 net production available for sale from the combined North America and International Exploration & Production (E&P) segments to average 405,000 to 435,000 barrels of oil equivalent per day (boed), excluding Libya. Marathon Oil also expects production from the Oil Sands Mining segment of 40,000 to 50,000 net barrels of synthetic crude oil per day in 2014.

Conventional Assets: The Company plans to spend approximately $1.4 billion on its conventional North America and International E&P assets to provide stable production, income and cash flow. These assets include production operations in Norway, the Gulf of Mexico, U.S. conventional oil and gas plays, Equatorial Guinea, the UK, Libya and developments in the Kurdistan Region of Iraq. With a continued emphasis on high operational reliability and expense management, Marathon Oil will continue to stress a disciplined investment plan that generates competitive returns.
Resource Play Assets: Approximately $3.6 billion of the capital spending budget is allocated to North America E&P resource play projects. Of that, $2.3 billion is allocated toward the Eagle Ford in south Texas, with plans for drilling 250-260 net wells (385-405 gross, of which 340-355 are Company operated) in 2014. Included in Eagle Ford spending is $225 million for central batteries and pipeline construction.

Additionally, the Company plans to spend just over $1 billion in the Bakken shale in North Dakota and $236 million in the Oklahoma Woodford. With that, Marathon Oil plans to drill 80-90 net wells (200-220 gross, of which 75-85 are Company operated) in the Bakken and 17-23 net wells (80-100 gross, of which 18-24 are Company operated) in the Oklahoma Woodford. In the Bakken, the Company also plans to recomplete 20-24 existing net wells (22-26 existing gross wells).

Exploration: Marathon Oil plans to spend $529 million selectively investing in a risk-balanced exploration program. Activity will include conducting seismic surveys and drilling 2-3 net wells (8-10 gross, of which two are Company operated) across the deepwater Gulf of Mexico, Ethiopia, Kenya, Gabon and the Kurdistan Region of Iraq.

Oil Sands Mining

Marathon Oil has budgeted $294 million for its Oil Sands Mining segment. The 2014 budget includes funds for numerous smaller projects that represent sustaining capital. Marathon Oil holds a 20 percent outside-operated interest in the Athabasca Oil Sands Project.

Corporate and Other

The corporate budget is expected to total $105 million, of which $49 million represents capitalized interest on assets under construction.


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