Marathon to Ramp Up US Shale Activity, Market North Sea Assets

Company officials reports that Marathon has achieved an accelerated learning curve in its capital-intensive U.S. unconventional plays, with a more than 50 percent improvement in its time from the spudding of a well to reaching total depth in its Eagle Ford drilling. The number of days from spud to total depth has declined from 24 days in fourth quarter 2011 to 12 days in this year’s third quarter. In the Bakken, the company has seen an improvement of more than 32 percent in the number of days from spud to total depth, from 21 days in fourth quarter 2011 to 15 days in third quarter 2013.

Marathon’s plan to delivery on its 5 to 7 percent CAGR target, with acceleration of higher margin resource plays, will offset its pending exit from Angola, company officials noted.

As a result of its plans, Marathon anticipates 2014 net production from its North America and international exploration and production segments to average 405,000 to 435,000 barrels of oil equivalent per day, excluding Libya.

Marathon’s plan to sell its North Sea assets will allow the company to simplify and concentrate its portfolio while increasing its growth rate and cash flows. Marathon has closed over the past three years almost $3.5 billion in non-core asset divestitures, surpassing the upper end of Marathon’s stated $1.5 to $3 billion budget.

The sale of its North Sea assets would result in an increase in Marathon’s adjusted (CAGR) from 5 to 7 percent to 8 to 10 percent for 2012 to 2017. The company’s current UK North Sea holdings include the Marathon-operated Brae complex and the Foinaven field. Marathon operates 10 licenses on the Norwegian Continental Shelf, including Alvheim, Boyla, Vilje, Viper/Kobra and Volund.

The company will spend approximately $1.4 billion on North American conventional and international exploration and production assets in Norway, the Gulf of Mexico, U.S. conventional oil and gas plays, Equatorial Guinea, the United Kingdom, Libya and Kurdistan, to provide stable production, income and cash flow.

Marathon also will spend $529 million in 2014 on seismic and exploration activity in its deepwater U.S. Gulf, Ethiopia, Kenya, Gabon and Kurdistan operations. These plans include the drilling of eight to 10 gross wells, including two operated by Marathon.

The company will spend $294 million on its oil sands operations, and expects production from its oil sands business of 40,000 to 50,000 net barrels of synthetic crude per day in 2014.

Marathon will also increase its remaining sharing repurchase authorization to $2.5 billion, including an anticipated $500 million share repurchase with Marathon’s sale of Angola Block 31. It also provides financial optionality heading into 2014.


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