Marathon Oil Set to Accelerate U.S. Resource Play Activity and Market North Sea Assets
Marathon Oil Corporation (NYSE: MRO), at its Analyst Day in New York today, is providing investors with a comprehensive report on the Company’s global operations, including a review of strategic plans to achieve profitable growth and competitive returns for shareholders.
The Company’s plans include:
Accelerating Eagle Ford and Bakken rig activity 20% each; 100% rig activity increase planned for Oklahoma Woodford
— 28-rig program underpinned by 2.4 billion barrels of oil equivalent (boe) of 2P unconventional resource, doubled since 2011, and over 4,500 net well locations
— Greater than 60% of 2014 $5.9 billion capital, investment and exploration budget allocated to resource plays
— Projects 2014 resource play production growth rate greater than 30% relative to 2013; forecasts overall production growth rate of approximately 4%, excluding Alaska, Angola and Libya
— For the period 2012-2017, projects resource play production compound annual growth rate (CAGR) greater than 25%; forecasts total production CAGR of 5-7% for the same period
Marketing the United Kingdom (UK) and Norway assets to continue portfolio optimization strategy
— Simplifies and concentrates portfolio
— 2012-2017 adjusted CAGR would increase to 8-10%
Increased remaining share repurchase authorization to $2.5 billion
— Includes anticipated $500 million share repurchase with sale of Angola Block 31
— Provides financial optionality heading into 2014
“When you look at the three priorities for our 2014 business plan – accelerating our rig activity in three of the highest-value domestic resource plays, marketing our North Sea assets and increasing our share repurchase authorization – we believe they definitively reinforce our stated strategy of creating long-term shareholder value and a commitment to rigorous portfolio management integrated with robust capital allocation,” said Marathon Oil President and CEO Lee Tillman.
“Our continued focus on operations and execution excellence across all our assets will help drive approximately 10 percent production growth in 2013, excluding Alaska and Libya. We believe this standard of performance, coupled with continued resource growth, fully supports an accelerated investment in our three high-quality resource plays — the Eagle Ford, Bakken and Oklahoma Woodford. This increased activity underpins our confidence in delivering approximately 4 percent year-on-year growth in overall 2014 volumes, excluding Alaska, Angola and Libya.
“Additionally, the marketing of our North Sea assets represents another example of our ongoing commitment to portfolio management. In the past three years, we have closed or agreed upon nearly $3.5 billion in non-core asset divestitures, surpassing the upper end of our stated $1.5 to $3 billion target. Our plan to market our assets in the UK and Norway provides an option to simplify and concentrate our portfolio while increasing our growth rate and accelerating cash flows. This, in turn, presents an opportunity to redeploy capital for long-term value creation for our shareholders.
“To that end and to provide financial optionality as we head into 2014, we’ve secured authorization from our board of directors to increase our remaining share repurchase authorization to $2.5 billion.
“Marathon Oil has demonstrated its ability to execute on its strategy and deliver results – an essential element to becoming the industry’s premier independent exploration and production company. With dedicated employees across the globe and a steadfast commitment to safe, responsible operations, skillful execution and delivering industry-leading results will remain our focus in 2014 and beyond,” Tillman added.
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