Marathon Oil Corp., an international oil and natural gas exploration and production company, will cut more than one billion U.S. dollars from its 2015 budget amid falling crude prices, the Houston-based company said Wednesday.
Marathon made the announcement in a statement released on its official website Wednesday. The company said it expects to spend between 4.3 billion and 4.5 billion U.S. dollars in 2014, down from a budget of about 5.7 billion U.S. dollars in 2014.
The company said it would tailor its budget to favor high-return investments in the United States and pare back exploration spending. Marathon said it expects annual production growth to be in the high single digits in 2015.
"We remain confident in our investment opportunities in the three U.S. resource plays. Our 2015 capital program is not opportunity constrained but will reflect sound discipline in managing cash flows in the current price environment," said Lee M. Tillman, Marathon Oil president and CEO.
According to the company's website, Marathon had net proved reserves at the end of 2013 of 2.2 billion barrels of oil equivalent in North America, Europe and Africa. The company's principal exploration activities are in the United States, Norway, Equatorial Guinea, Poland, Angola and Iraq.
Marathon is not the only U.S. producer to announce budget cuts in response to falling crude prices. Earlier in December, ConocoPhillips, the third-largest U.S. oil producer behind ExxonMobil and Chevron, said it would cut its budget by 20 percent to 13.5 billion U.S. dollars.
Crude oil prices have fallen by about 45 percent since this summer. On Wednesday, U.S. benchmark crude closed at 56.47 U.S. dollars on the New York Mercantile Exchange.