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Marathon Cuts 2020 Capital Budget by 11 Percent  | Rigzone

Marathon Cuts 2020 Capital Budget by 11 Percent  | Rigzone

In its recent spending plan announcement Marathon Oil Corp. revealed a reduced 2020 total capital budget of $2.4 billion, down 11% from 2019.

“2019 was another year of differentiated execution for Marathon Oil as we comprehensively delivered on our framework for success for the second year in a row,” Chairman, President and CEO Lee Tillman said in a written statement.

“We continue to improve our underlying corporate returns, we’ve delivered positive organic free cash flow for eight consecutive quarters, and we’ve returned over 20% of our cash flow from operations back to our shareholders since the beginning of 2018. We improved our capital efficiency in 2019 through meaningful reductions in both completed well cost and unit production expense, and further optimized and simplified our portfolio. We also enhanced our resource base through success across all elements of our comprehensive resource capture framework, adding over three years of inventory through organic enhancement, Resource Play Exploration, and bolt-on acquisitions and trades.

“…This focus, along with our low organic free cash flow breakeven of $47/bbl in 2020, and even lower in 2021, will position Marathon Oil for success across a wide range of commodity price environments.”

2019 Highlights

  • Generated $410 million of organic free cash flow post-dividend in 2019; generated $110 million of organic free cash flow during fourth quarter
  • Returned $510 million of capital back to shareholders
  • Delivered annual U.S. oil production growth of 13% on $2.4 billion development capital budget; fourth quarter U.S. oil production averaged 196,000 net bopd, up 9% from prior year
  • Achieved 10% annual reduction in average completed well cost per lateral foot and 15% annual reduction in U.S. unit production expense

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