Update: Marathon Oil grows capital spending 24 percent

Marathon Oil has announced a $4.8 billion capital spending budget for 2012, a 24 percent increase from its 2011 budget.

About one-third of the planned spending will target operations in the Eagle Ford shale, the Houston-based company said Wednesday. Marathon Oil plans to build up its presence in the south Texas shale play, operating 17 rigs and doubling its number of hydraulic fracturing crews to four by mid-year.

Another third of the capital budget will funnel into other U.S. shale operations, including the Bakken in North Dakota, the Woodford in Oklahoma and the Niobrara in Wyoming and Colorado. The company’s 2011 capital budget also emphasized shale formations heavy in oil and natural gas liquids, which currently command higher prices than dry natural gas.

In total, 70 percent of total capital spending — or $3.3 billion — will pay for finding and producing oil and natural gas in the United States, the company said.

The company has also slated $430 million for exploration activities in the deepwater Gulf of Mexico, Indonesia, the Kurdistan region of northern Iraq, and Poland.

Marathon’s refining operations spun off into an independent Ohio-based company called Marathon Petroleum this summer. The company had devoted about 23 percent of its original $5.3 billion 2011 capital spending budget to the refining, marketing and transportation segment before the split.

After the spin off, Marathon Oil announced that it had reduced the company’s 2011 budget to $3.9 billion, reflecting that it no longer funded refining operations.