Marathon Oil (MRO -0.45%) recently announced its plans for next year, which will include an acceleration of drilling activity across its North American operations, the sale of North Sea assets, and an increase in its share buyback program, as the company seeks to simplify its portfolio and boost shareholder returns. Let's take a closer look at what's in store for Marathon next year.

North American resource plays
Houston-based Marathon plans to spend $5.9 billion next year, with roughly 60% of that capital budget, or $3.6 billion, earmarked for North American oil and gas resource plays. Of these funds, the largest portion will be directed toward its operations in south Texas' Eagle Ford shale, where the company expects to drill more than 250 wells next year.

The next largest portion -- $1 billion -- will go toward its operations in North Dakota's Bakken shale, where it plans to drill 80 to 90 net wells next year, while the remaining $236 million will be allocated to the Woodford shale in Oklahoma, where it will drill 17 to 23 net wells.

Conventional assets, exploration, and oil sands
Marathon also plans to spend roughly $1.4 billion on its North American and international conventional assets, including projects in Norway, the U.K., the Gulf of Mexico, Equatorial Guinea, Libya, Iraq's Kurdistan region, and conventional plays in the United States. These operations will serve primarily to generate stable production, income, and cash flows, as opposed to the company's Eagle Ford, Bakken, and Woodford operations, which will be the main drivers of the company's growth.

The company has also budgeted roughly $529 million for exploration spending, with plans to conduct seismic survey and drill two to three net wells in the deepwater Gulf of Mexico, Ethiopia, Kenya, Gabon, and Iraq's Kurdistan region.

Lastly, Marathon has set aside $294 million for its operations in Canada's oil sands, where it holds a 20% stake in a mining project in the Athabasca oil sands, along with Royal Dutch Shell (RDS.A), which maintains a 60% interest and serves as the project's operator, and Chevron (CVX -0.32%), which holds the remaining 20% stake.

Asset sales and share buyback
Meanwhile, the company plans to divest its United Kingdom and Norway assets as part of its portfolio optimization strategy that seeks to streamline its asset portfolio. It also plans to buy back a lot more shares through asset sale proceeds and boosted its remaining share buyback authorization to $2.5 billion.

The company has already closed or agreed upon almost $3.5 billion worth of non-core asset sales in the past three years, exceeding its stated target of $1.5 billion to $3 billion in asset sales over the period. Several of its peers are also shedding non-core international assets in favor of accelerating activity in U.S. shale plays.

For instance, ConocoPhillips (COP -0.06%) has sold $12.4 billion worth of assets since 2012, including stakes in oilfields in Kazakhstan, Nigeria, and Algeria, in order to concentrate on high-growth operations in the Eagle Ford, Permian Basin, and the Bakken, while Occidental Petroleum (OXY 0.07%) recently announced its intentions to divest Middle East assets to focus on opportunities in North American, especially the Permian Basin, where it is a dominant operator.

The bottom line
As its 2014 capital spending program highlights, Marathon views North America as the most significant driver of its growth. The company boasts sizable stakes in both the Eagle Ford and the Bakken, where it has demonstrated industry-leading drilling performance, thanks in part to strong improvements in drilling costs and reductions in the number of drilling days.

Next year, Marathon expects production growth in excess of 30% from its North American resource plays -- a trend that is likely to continue in coming years given the company's more than 10-year remaining drilling inventory between the Bakken and Eagle Ford. With solid growth prospects for its domestic operations and stable cash flows from its international conventional assets, Marathon appears well positioned to grow companywide production at a CAGR of 5%-7% over the period 2012-2017.