Marathon Oil Corp. will spend more than half of its global capital next year in North American resource shale plays, with the rig count in both the Eagle Ford and Bakken shales increasing by 20%, and twice as many rigs working Oklahoma's Woodford Shale.

The oil major's strategy, a "portfolio simplification" unveiled for investors on Wednesday, earmarks 60% of the planned $5.9 billion budget for the United States and Canada. This year Marathon is spending about $5.2 billion worldwide. Plans also include selling estimable North Sea assets near the UK and Norway.

From the Eagle Ford, Bakken and Woodford, output is projected to increase year/year more than 30%. Global production in 2014, excluding Alaska, Angola and Libya, should grow about 4%.

By the end of this year, output should be 10% higher than it was in 2012, said CEO Lee Tillman.

"When you look at the three priorities for our 2014 business plan -- accelerating our rig activity in three of the highest-value domestic resource plays, marketing our North Sea assets and increasing our share repurchase authorization -- we believe they definitively reinforce our stated strategy of creating long-term shareholder value and a commitment to rigorous portfolio management integrated with robust capital allocation," Tillman told investors. The board of directors approved an increase in the remaining share purchase program to $2.5 billion.

The Houston-based oil giant has focused on drilling liquids-rich unconventional fields since spinning off its downstream operations in 2011 (see Daily GPI, July 1, 2011).

Between July and September, Marathon improved its drilling times and completion costs in the Eagle Ford by 20% (see Shale Daily, Nov. 5). Bakken drilling also improved during the quarter by 20%. Oklahoma output averaged 15,000 boe/d net in the period, which was 15% higher than in 2Q2013.

About $3.6 billion of the capital in 2014 would be spent in North America resource plans, with $2.3 billion allocated to the Eagle Ford in South Texas. Plans are to drill 250-260 net wells in South Texas. About $225 million would be spent in the Texas play on central batteries and pipeline infrastructure.

Close to $1 billion is set aside for North Dakota, with plans to drill 80-90 net wells. Marathon also wants to recomplete 20-24 existing net wells in the Bakken formation.

In Oklahoma's Woodford, $236 million would be used to drill 17-23 net wells -- a 100% uptick from 2013 activity.

The 28-rig program in the domestic onshore is underpinned by an estimated 2.4 billion boe of proved and probable (2P) unconventional resources, double since 2011, with more than 4,500 net well locations, Tillman noted. From 2012 to 2017, the onshore projects' compound annual growth rate (CAGR) is forecast to be more than 25%; total CAGR production is estimated at 5-7% over the period.

All of the growth is coming even as Marathon continues to jettison once promising developments, the CEO noted.

"In the past three years," he said, "we have closed or agreed upon nearly $3.5 billion in noncore asset divestitures, surpassing the upper end of our stated $1.5-3 billion target."

Expected 2014 net production available for sale from the combined North America and international exploration segments should average 405,000-435,000 boe/d, excluding Libya, according to the operator. Marathon also expects production from Canadian oilsands mining segment of 40,000-50,000 b/d of synthetic crude oil.

About $1.4 billion in the 2014 capital plan would be directed to conventional projects in North America and globally to provide stable production, income and cash flow. These conventional assets include production operations in the U.S. onshore, Gulf of Mexico (GOM) and overseas. In addition, $529 million would be used to "selectively" invest in a risk-balanced exploration program. Seismic surveys are planned, as well as drilling two to three wells in the deepwater GOM and overseas.