Like Conoco, Marathon Oil (MRO) took the initial steps of becoming leaner by splitting its refining operations away from its E&P efforts. However, that isn’t enough for the Houston-based oil producer; Marathon has continued to shed non-core and politically unstable assets.
In the three-year period ending this year, Marathon expects to raise between $1.5 billion and $3 billion from asset sales, and recently agreed to sell its 10% working interest in offshore Angola to Sinopec for $1.5 billion. The sale marks a decided shift in MRO’s strategy, as it actually has been quite successful in Africa.
That shift — as you might guess — puts Marathon very much back into the U.S. and its vast shale resources.
With the firm looking at dumping its Canadian tar sands assets, Marathon will have adjusted its asset mix to primarily focus on drilling in onshore U.S. shale plays. MRO controls 200,000 acres in the Eagle Ford, 390,000 acres in the Bakken as well as 220,000 acres across Oklahoma’s vast shale basins.
That shale production will help MRO pay down debt, buy back shares and get more aggressive with its dividend.