Marathon Oil Lays Out 2014 Plans Including Investment, Sales, Buybacks

Marathon Oil (NYSE: MRO  ) announced plans today for 2014, which include a nearly $6 billion investment in its assets to grow production capabilities, the potential divestment of certain noncore European assets, and increasing its share repurchase authorization to $2.5 billion.

More than 60% ($3.6 billion) of the company's $5.9 billion 2014 capital, investment, and exploration budget would be dedicated to what it called "high-growth, liquids-rich North America resource play assets," including $2.3 billion for the Eagle Ford in south Texas, $1 billion in the Bakken shale in North Dakota, and $236 million in the Oklahoma Woodford.. The company noted these are "assets that provide low-risk, profitable growth," with the ultimate target being "significant value creation." It anticipates these investments will allow for resource play production rate growth of 30% year over year.

Of its more traditional operations, Marathon noted it will spend approximately $1.4 billion to develop its conventional assets, and expected its overall production rate to grow by 4% next year after excluding Alaska, Angola, and Libya. From 2012 to 2017, Marathon anticipates a total production growth of 5%-7% per year, and for its resource play growth rate to stand at 25% per year.

In move to both simplify and concentrate its portfolio, Marathon said it would begin marketing its assets in the United Kingdom and Norway. This follows divestments totaling nearly $3.5 billion over the last three years. It anticipated this move would allow the adjusted production growth rate to increase to 8%-10%, while also allowing for better cash flow into the company.

Finally, the company announced it would up its share repurchase authorization to $2.5 billion, which included a previously announced $500 authorization resulting from the sale of its Angola Block 31.

"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," said Lee Tillman, Marathon Oil's president and CEO, in a press release. "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."

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9/28/2016 4:01 PM
MRO $15.18 Up +1.12 +7.97%
Marathon Oil CAPS Rating: *****