US-based oil and natural gas company Marathon Oil is planning to sell its business in the North Sea and increase drilling in the US, which — along with a 13% boost in spending and $2.5 billion share-repurchase program in 2014 — will aid the company in growing both its production and shareholder returns. Besides the US, its main exploration activities are in Norway, Guinea, Poland, Angola and Iraqi Kurdistan.
Of the company’s capital spending for 2014 — an estimated $5.9 billion — $3.6 billion will be used for drilling in North America.
The company is set to spend billions in Oklahoma, Texas and North Dakota, the latter two housing some of the largest shale formations in the US. For Texas, Marathon is investing $2.3 billion in the Eagle Ford Shale Formation located in South Texas, which is expected to have at least 400 new wells drilled in the coming months. For North Dakota, the company is investing $1 billion in the Bakken Formation, and $236 million in the Woodford Basin in Oklahoma.
Other US energy companies are also moving their businesses back home. LA-based Occidental Petroleum Corp. is planning to sell some of its Middle East business and increase its presence in West Texas’ Permian Basin. Houston-based Apache Corp. sold some of its natural gas business in Egypt in order to concentrate on North America. Houston-based ConocoPhillips is looking to sell some of its Nigerian and Kazakhstan assets for a move back home, as well.
Around 70% of Marathon Oil’s profits originate from manufacturing oil and natural gas; the company projects that it’s oil and gas output will rise by 4% in 2014.
It is very positive for both the US economy and energy independence that US energy companies are now investing more in US oil and gas properties.
Developed and Written by Dr. Subodh Das and Tara Mahadevan
January 7, 2014
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