Marathon Plans Capital, Exploration Spending of $18.5B to 2012
Marathon Oil Corporation provided investors with a comprehensive report on the Company's global operations, including a review of strategic plans that will enable Marathon to deliver growth across each of its segments.
Projecting forward to 2012, the Company detailed its five-year operational and financial targets for upstream and oil sands mining, excluding acquisitions and divestitures, which include: maintaining competitive cash and income per BOE; compound average production growth, upstream plus oil sands mining, of 7 percent (2007 to 2012); capital and exploration spending of about $18.5 billion (2008 to 2012); average annual reserve replacement, including oil sands, of more than 150 percent (2008 to 2012); drilling 8 to 13 significant exploration wells per year with average annual resource additions of 150 million BOE at a finding cost of less than $3 per BOE.
"We have in hand today the assets and plans through our integrated business model to fulfill our mission of providing shareholders with long-term sustainable value growth," said Clarence P. Cazalot, Jr., Marathon President and CEO.
Cazalot highlighted a number of factors that will contribute to Marathon's future success: a resource base of 6.6 billion barrels of oil equivalent (BOE) -- the largest in company history; year-end 2012 proved reserves, including oil sands, projected to be approximately 15 percent higher than year-end 2007; and a growing portfolio of upstream growth opportunities beyond 2012.
At year-end 2001, Marathon had a resource base of 2.1 billion BOE and by year-end 2007, the Company had more than tripled this to 6.6 billion BOE, which includes liquid hydrocarbons, natural gas and bitumen.
"Resource growth drives future reserve additions," Cazalot said, "and we intend to further increase our resource base and convert barrels into proved reserves and production. A major contributor will be our oil sands mining business, which will be ramping up production significantly in the coming years. We're also making strategic investments in our downstream business that will lower feedstock costs as well as increase efficiency and flexibility, so we can continue providing competitive returns in an increasingly challenging market. And, importantly, we will continue to maintain financial discipline and flexibility to fund our profitable growth.
"Across all of our business segments, we will access and deploy critical technologies to differentiate Marathon from our competition. We will strive to attain top-quartile execution on major projects and employ operational excellence to ensure safe, environmentally responsible and highly reliable operations.
"Further enhancing our ability to execute our plans, we have contracts in place for most of our major projects and we have and will continue to increase technical human resources in order to meet future needs," he said.
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