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Marathon Oil revises 2020 spending

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Oilfield Technology,

In response to current market conditions, Marathon Oil has announced an updated 2020 capital spending budget. The revised capital budget of US$1.3 billion or less represents a cumulative budget reduction of US$1.1 billion from initial 2020 capital spending guidance. 2020 capital spending is now expected to be approximately 50% below actual capital spending in 2019.

In addition to previously announced actions to fully suspend Resource Play Exploration (REx) and Oklahoma activity, the company now plans to suspend further drilling activity in the Northern Delaware, with only a limited number of wells to sales expected through the balance of the year. The company will continue to optimise development plans in the Bakken and Eagle Ford. The revised 2020 capital budget of US$1.3 billion or less includes the implementation of 2Q20 frac holidays in the Bakken and Eagle Ford, before transitioning to a lower and more continuous drilling and completion programme over the second half of 2020 in both basins. Marathon Oil retains flexibility to adjust capital spending plans as necessary in response to a dynamic macro environment.

"In light of extreme commodity price weakness and anticipated ongoing demand impacts, we have dramatically reduced activity in REx, Oklahoma and the Northern Delaware, and plan to take frac holidays in both the Bakken and Eagle Ford during second quarter. We're maintaining our returns-first mindset with a focus on preserving value through the cycle," said Marathon Oil Chairman, President, and CEO Lee Tillman.

"We believe our high quality, multi-basin portfolio affords us ample flexibility to swiftly and appropriately respond to changing market conditions, and we currently expect to transition to a more continuous but lower level of activity in both the Bakken and Eagle Ford during the second half of the year. Against a highly volatile and uncertain environment, these decisive actions are designed first and foremost to protect our balance sheet and our hard earned financial strength. We remain investment grade at all primary rating agencies, with recent reviews by both Fitch and S&P, and maintain a strong liquidity position with no near-term debt maturities. Our financial strength, high quality portfolio, and ongoing focus on reducing our cost structure position us well to navigate this extraordinary time for our industry."

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