Tickers in this Article: MRO, XOM, CVX, NXY, ROSE
Marathon Oil (NYSE:MRO) plans to spend $4.8 billion in capital in 2012 with the majority of the funds devoted towards the company's growth assets. This spending will also be weighted towards plays that produce crude oil and other liquids. (To know more about oil and gas, read Oil And Gas Industry Primer.) Investopedia Markets: Explore the best one-stop source for financial news, quotes and insights.

2012 Capital Spending
Marathon Oil's $4.8 billion capital budget will be spread across many different types of oil and gas properties in the company's portfolio. The company classifies these assets in the growth, base or exploration category and expects this capital to help it meet the goal of 5 to 7% annual production growth established for the 2010 to 2016 period.

Base Assets
Marathon Oil has budgeted $900 million in exploration and production spending on base assets across the globe, including properties in the United States, Africa and Europe. The company hopes to maintain stable production and cash flows from the base asset portfolio.

Growth Assets
Marathon Oil has allocated $2.7 billion, or 56% of the company's capital budget to four plays that are expected to help generate future production growth for the company. These plays are all located in the onshore United States and include the Eagle Ford Shale, Woodford Shale, Bakken and Niobrara.

Marathon Oil's main focus in the growth portfolio will be the Eagle Ford Shale in Texas, where the company will ramp up to operate 17 rigs next year. The company will also add two dedicated hydraulic fracturing fleets here and expects to drill from 155 to 170 net wells in the Eagle Ford Shale in 2012.

Other companies active in the Eagle Ford Shale include Rosetta Resources (Nasdaq:ROSE), which is operating four rigs here and plans to complete 60 wells in 2012 in this play. Rosetta Resources has allocated more than 90% of its $640 million capital budget for this play.

Marathon Oil has budgeted for 95 to 130 net wells in the Woodford Shale, Bakken and Niobrara formations in 2012. The company will also spend an additional $300 million on growth plays outside these four areas. These include offshore Angola, Canada and two non-operated projects in the Gulf of Mexico. (Find out how to invest and protect your investments in this slippery sector. For more, see What Determines Oil Prices?)

Exploration Portfolio
Marathon Oil has also allocated $430 million in capital spending on exploratory projects in the company's portfolio. These projects will be used to generate long-term growth in production for the company. Marathon Oil will use the funds to drill up to 10 exploration wells in various areas including Kurdistan, Poland and the Deepwater Gulf of Mexico.

One promising exploration area for Marathon Oil is in Poland, where the company has 11 concessions and 1.2 million acres to explore. Marathon has a 51% working interest here and is involved with partners Nexen (NYSE:NXY) and Mitsui.

Poland has seen strong interest from the energy industry looking for shale and other unconventional resource basins. The Polish government has awarded more than 100 concessions to various oil and gas companies including Exxon Mobil (NYSE:XOM) and Chevron (NYSE:CVX)

The Bottom Line
Marathon Oil is not missing a beat as it starts its first full year as an upstream only oil and gas company. The company plans to spend almost $5 billion in capital in 2012 to develop higher-return crude oil and liquids opportunities on its acreage in the United States. (For additional reading, check out A Guide To Investing In Oil Markets.)

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At the time of writing, Eric Fox did not own shares in any of the companies mentioned in this article.

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