Marathon Oil will cut more than $1B from 2015 budget

HOUSTON — Marathon Oil Corp. will spend about 20 percent less looking for and producing oil next year, the company said Thursday.

The Houston-based exploration and production company said it expects to spend between $4.3 billion and $4.5 billion in 2014, down from a budget of about $5.7 billion in 2014.

The company said it would tailor its budget to favor high-return investments in the U.S. and pare back exploration spending. Marathon said it expects annual production growth to be in the high single digits in 2015.

Marathon also left open the possibility that its budget could shift before being finalized in February 2015.

“The continuing dynamic change in crude oil markets together with the expected impacts to oilfield service costs warrants additional time before finalizing the 2015 budget,” the company said in a statement. “The 2015 capital program will be scalable higher or lower depending on market conditions.”

In 2014, Marathon boosted production in the Eagle Ford and Bakken. The company didn’t immediately specify where the cuts would come from in 2015.

Marathon is not the only producer to announce budget cuts in response to falling crude prices. Earlier in December, ConocoPhillips said it would cut its budget by 20 percent to $13.5 billion.

Most recently, Rosetta Resources said it would cut its 2015 budget to roughly $750 million from $1.1 billion last year.

Several analysts have predicted that capital budgets will be slashed by roughly 20 percent in 2015 compared to 2014. Crude oil prices have fallen by about 45 percent since this summer. On Wednesday, U.S. benchmark crude closed at $56.47.