(RTTNews) - Thursday, integrated oil company Marathon Oil Corp. (MRO: News ) said it will allocate a larger percentage funds for exploration and production of crude and natural gas and a smaller percentage on refining and marketing of gasoline. The company also plans to cut fiscal 2010 capital expenditures by $1 billion.

At its investor day meeting in New York, the Houston-based energy company said capital spending for 2010 would be approximately $5 billion, down from $6 billion it expects to invest by the end of 2009. Spending on exploration and production is expected to be approximately $3.5 billion in 2010.

For 2008-2011, the company continues to expect an upstream production compound annual growth rate of approximately 4%, including oil sands mining, despite the earlier announced asset sales and its impact on production. For 2009, production is expected the grow 6% over the year-ago period.

In the third quarter, production available for sale rose 5% to 393,00 barrels of oil equivalent a day, from 375,000 barrels a day in the year-ago period.

Next year, Marathon plans to drill three to four "significant" wells in the Gulf of Mexico, two high-risk, high-potential wells in Indonesia, as well as activity in Norway, Libya, Angola and the onshore resource plays of the United States.

Marathon' plans to allocate more capital to its oil and gas business after comes after the company's execution of several projects including the $3.4 billion expansion of its refinery in Garyville, Louisiana.
"Now we are poised for a new wave of exploration success, certainly with the Gulf of Mexico being more of a focal point," said the company's chief executive Clarence Cazalot at an analysts meeting in New York.

Marathon has plans to invest in offshore Norway and in its Alvheim/Vilje and Volund developments, as well as oil sands mining in Canada. The company also announced plans to sell assets for about $3.5 billion, which negatively impacted production projections by about 12 thousands barrels of oil equivalent per day.

"Marathon's Upstream margins are very competitive and should remain so as production increases and we focus on reducing costs per barrel," the company said. "Downstream business has performed well throughout this challenging economic environment and we expect this to continue and strengthen as the Garyville refinery expansion comes online."

MRO declined 3.95%, or $1.37 and closed Thursday's regular trading session at $33.33 on the New York Stock Exchange amid broad weakness in energy and other stocks.

To receive FREE breaking news email alerts for Marathon Oil Corp. and others in your portfolio

by RTT Staff Writer

For comments and feedback: contact editorial@rttnews.com