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U.S. RESOURCE PLAYS KEY TO DRIVING GROWTH

To drive profitable production growth, Marathon Oil is developing strategic assets around the globe, particularly in U.S. unconventional liquids-rich plays, Canadian in-situ resources and deepwater Angola. Production from these assets is expected to increase at approximately 50 percent compound annual growth rate through 2016, with liquids accounting for an average of 80 percent of the mix.

The development of these liquids-rich resource plays provides a more predictable and lower risk opportunity set and is the primary source of growth. In 2011, Marathon Oil increased its position in U.S. unconventional liquids-rich plays to more than 1 million net acres. Holdings at year-end included approximately:

• 300,000 net acres in the Eagle Ford Shale in South Texas
• 400,000 net acres in the North Dakota Bakken oil play
• 160,000 net acres in the core of the Anadarko Woodford play in western Oklahoma
• 151,000 net acres in the emerging Niobrara Shale in the DJ Basin in northern Colorado and southeastern Wyoming

By year-end 2011, Marathon Oil had 28 drilling rigs and eight hydraulic fracturing crews operating primarily in U.S. resource plays.

Of the $3 billion in capital spending budgeted for E&P growth projects in 2012, $2.7 billion is allocated for the Eagle Ford, Bakken, Anadarko Woodford and Niobrara shale plays. Worldwide, the Company plans to drill a total of 250-300 net wells (500-530 gross, of which Marathon Oil will operate 335-365) across its growth assets during the year.

The Company established a top-tier position in the core liquids part of the Eagle Ford Shale, the premier U.S. resource play, through acquisitions in 2011. Marathon Oil holds an average working interest of 80 percent in its Company-operated assets. The Company expects to increase its Eagle Ford rig count from 14 at year-end 2011 to 18 by the end of 2012 and dedicated pressure pumping crews from two to four over the same period. It expects to drill 160-185 net wells (200-230 gross) and to produce 30,000 net average boed in the Eagle Ford during 2012. Production is targeted to grow to more than 100,000 net boed in 2016.

In the Bakken oil play, Marathon Oil uses state-of-the art automated rigs to reduce cycle times and improve safety and energy efficiency. Milestones in 2011 included upgrading to 30 stage completions, improving initial production rates and establishing a new production area (Aeneas). Plans for 2012 are to continue drilling in the core areas and expand development of two new areas, Aeneas and Diomedes. Marathon Oil expects to add its eighth drilling rig by mid-year, and drill 53 net wells (69 gross) in 2012. Production is expected to increase from an average of 17,000 net boed in 2011 to 33,000 net boed in 2016.

Seven net wells (13 gross) were drilled in the liquids-rich Niobrara Shale in 2011 to test the viability of the play. The Company plans to participate in 17-24 net wells (50-70 gross) in 2012 to delineate successful prospects and identify development areas.

Marathon Oil is active in Gulf of Mexico development projects. Appraisal activity began in late 2011 at the non-operated deepwater Gunflint prospect. The Company is also a participant in the Shenandoah discovery where plans are to drill an appraisal well mid-year 2012.

On the Company’s Birchwood in-situ acreage in Alberta, Canada, appraisal drilling of approximately 100 wells was completed in March 2011. Based on the results, a regulatory application will be filed in 2012, with first production anticipated in 2016.

First production from the Angola Block 31 PSVM Development is expected in mid-2012, with a net plateau rate of 14,000 bpd projected during 2013 through 2016 from an FPSO. Marathon Oil owns a 10 percent working interest in Block 31 and Block 32, where more than 30 successful exploration wells have been drilled. The Company and its partners are evaluating additional development opportunities on both blocks.