Marathon Oil Corp. CEO Lee Tillman said the company plans to sell at least $500 million in assets and has jettisoned acreage in East Africa as part of an effort to scale down conventional exploration in favor of shale.
“We’ve identified for sale non-core E&P and midstream assets that simply do not compete for capital today given the depth and breadth of our U.S. resource plays,” Tillman told investors on a conference call Thursday.
The Houston producer’s plan to get rid of conventional drilling assets comes as several other companies plan similar divestitures, including ConocoPhillips’ recent announcement it will exit deep-water exploration altogether by 2017 and sell off at least part of its 1.7 million acres in the Gulf of Mexico.
Marathon has also said it will cut capital spending by at least 29 percent next year as costs decline and its outlook on oil prices worsens, with U.S. crude hovering below $50 a barrel in recent months.
But three quarters of its $2.2 billion budget next year would be spent in the U.S. shale plays, “which offer our highest risk-adjusted returns.”Click here to read more about this.
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