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."
Fool contributor Patrick Morris has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
More from The Motley Fool
4 Things Marathon Oil Corporation's CEO Wants You to Know About What Lies Ahead
The overarching theme is that the oil company can excel at current oil prices.
Oil and Gas Stock Roundup: Oil, Strong Earnings Sent Stocks Soaring
Several shale drillers blew past expectations, which sent their stocks up double digits.
Marathon Oil Corporation Blows Off Harvey to Post Expectation-Beating Results
The shale driller expects to exit the year producing as much as 30% more from its U.S. resource plays even as it lives within cash flow.