OREANDA-NEWS. December 12, 2012. Marathon Oil Corporation (NYSE: MRO) announced a USD 5.2 billion capital, investment and exploration budget for 2013, approximately 65 percent of which is targeted to the Company's liquids-rich growth assets, reported the press-centre of Marathon Oil.  

"Our 2013 capital budget of nearly USD 5.2 billion highlights Marathon Oil's continued focus on value growth, which we expect will generate a 6 to 8 percent year-over-year increase in total Company production, driven by our activity in liquids-rich U.S. resource plays," said Clarence P. Cazalot Jr., Marathon Oil's chairman, president and CEO. "About one-third of our overall budget, or USD 1.9 billion, is allocated to the Eagle Ford shale play in south Texas where we demonstrated our ability to deliver very strong results in 2012 and recently raised our 2013 production target there to 85,000 net barrels of oil equivalent per day (boed). The economics and well performance we're achieving in the Eagle Ford, along with our ability to drive efficiencies, make this play a focal point of our growth strategy. The Bakken shale in North Dakota and the Oklahoma resource basin are our other two critical plays in the U.S.

"We plan to spend approximately USD 1.1 billion on base assets across North America, Africa and Europe, including Oil Sands Mining. These large, stable assets are an integral part of our global portfolio and enable us to generate substantial cash flow for investing in our future growth. At the same time, we are constantly working to reduce costs and optimize the portfolio to maximize returns from our base assets.

"Additionally, our 2013 plans to participate in drilling 10 to 13 impact exploration wells in some of the most prospective basins in the world are expected to provide further upside potential," Cazalot said.

"With this budget, Marathon Oil remains committed to financial discipline, a strong balance sheet and creating and delivering value for our shareholders."

Exploration & Production (E&P)
Marathon Oil's strategy is based on three key elements: a solid portfolio of base assets that generates significant cash flow, a defined set of growth assets that provides low risk profitable growth and a balanced exploration program targeting significant value creation. The Company expects 2013 E&P net production available for sale to average 395,000 to 420,000 boed (excluding Libya).

Base Assets: The Company plans to spend approximately USD 870 million on its base 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 United Kingdom and Libya. With a continued emphasis on high operational reliability, Marathon Oil will continue to stress a disciplined investment plan and maintain a competitive cost structure for its base assets.

Growth Assets: Approximately USD 3.4 billion of the capital spending budget is allocated to E&P growth projects. Of that, USD 1.9 billion is allocated toward the Eagle Ford with plans for drilling 215 - 250 net wells (275 - 320 gross, all company operated) in 2013. Included in Eagle Ford spending is USD 190 million for central batteries and pipeline construction.

Additionally, the Company plans to spend nearly \\$800 million in the Bakken shale in North Dakota and USD 150 million in the Oklahoma resource basin. With that, Marathon Oil plans to drill 65 - 70 net wells (190 - 220 gross, 60 - 70 Company operated) in the Bakken and 15 - 19 net wells (42 - 50 gross, 12 - 14 Company operated) in the Oklahoma resource basin.

Approximately USD 540 million is allocated toward other development activities, such as Angola Blocks 31 and 32, the Kurdistan Region of Iraq and Canadian in-situ development.

Exploration: Marathon Oil plans to spend approximately USD 450 million selectively investing in a balanced exploration program. Activity will include conducting seismic surveys and drilling 3 - 5 net wells (10 - 13 gross, 3 - 4 Company operated) across the deepwater Gulf of Mexico, Ethiopia, Kenya, Gabon, the Kurdistan Region of Iraq and Norway.

Oil Sands Mining
Marathon Oil has budgeted USD 262 million for its Oil Sands Mining segment. The 2013 budget includes funds for debottlenecking projects, a carbon capture and sequestration project and other capital expenditures. 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 approximately USD 180 million, of which USD 119 million represents capitalized interest on assets under construction.

Marathon Oil Corporation is an independent international exploration and production company. Based in Houston, Texas, Marathon Oil had net proved reserves at the end of 2011 of 1.8 billion barrels of oil equivalent in North America, Europe and Africa.