"Marathon's 2010 capital program will focus on Upstream activity, with an emphasis on the development of sanctioned projects, potentially significant exploration wells and advancing our growing resource plays," said Clarence P. Cazalot, Jr., Marathon president and CEO.

"With the completion of our Garyville, La., refinery major expansion, our spending in the Downstream is budgeted to be 53 percent lower in 2010 compared to 2009," Cazalot said. "We are very proud of the effort of so many individuals across the Company in bringing the Garyville Major Expansion to completion on time. Starting in the second quarter of this year, after the major turnaround of the base facility, we anticipate this world-class, 436,000-barrel-per-day refinery will be a major earnings and cash flow contributor to Marathon.

"As previously stated, we intend to link our spending levels to cash flow and to maintain our financial flexibility. Our disciplined approach to investing is designed to create the appropriate diversification and scale for all our business segments and deliver strong returns for our shareholders," he said.

Marathon continues to expect an Upstream production compound annual growth rate of approximately 4 percent, including Oil Sands Mining, for the period 2008-2011, excluding additional asset acquisitions, divestitures or future exploration successes. This growth rate remains unchanged despite completed asset sales estimated to reduce previously projected 2011 production by approximately 12,000 barrels of oil equivalent per day (boepd).

Exploration and Production

Marathon's 2010 worldwide exploration and production budget of approximately $2.9 billion reflects an increase of 24 percent over 2009 capital spending.

Oil Sands Mining

Marathon has budgeted approximately $670 million for its Oil Sands Mining segment, down 32 percent from 2009 as Expansion 1 of the Athabasca Oil Sands Project (AOSP) approaches completion. The project is on track and anticipated to begin mining operations in the second half of 2010, with a phased start-up of upgrader operations to follow in late 2010 or early 2011.

Expansion 1 includes construction of mining and extraction facilities at the Jackpine mine, expansion of treatment facilities at the existing Muskeg River mine, expansion of the Scotford upgrader and development of associated infrastructure. Marathon holds a 20 percent interest in the AOSP, a long-life project with a stable production profile.

Under revised Securities and Exchange Commission regulations, Marathon will begin reporting Oil Sands Mining production and reserves in terms of synthetic crude production, which is bitumen after upgrading excluding blendstocks. Net synthetic crude production for 2010 is expected to be between 22,000 and 28,000 barrels per day (bpd). The 2010 forecast takes into account a planned turnaround at the existing AOSP mine and upgrader facilities beginning late in the first quarter of this year and continuing into the second quarter. Production is expected to be curtailed for approximately 60 to 70 days and completely shutdown for two-thirds of that time.

Refining, Marketing and Transportation

The 2010 budget for the Refining, Marketing and Transportation segment will decrease by more than half to $1.1 billion, largely because of the on-time completion of the Garyville Major Expansion project in the fourth quarter of 2009. With the expansion, the refinery's crude oil throughput capacity has grown from 256,000 bpd to 436,000 bpd, making it among the largest refineries in the U.S. The entire facility (base and expansion) is expected to reach full refining capacity by the second quarter of 2010 following the planned maintenance activities currently under way at the base refinery.

The 2010 Downstream budget is allocated as follows: approximately $400 million for continuation of the Detroit Heavy Oil Upgrading Project, which is targeted for start-up in the second half of 2012; approximately $300 million to address the Mobile Source Air Toxics II regulations that go into effect starting Jan. 1, 2011; and approximately $400 million for the remainder of the Company's Refining, Marketing and Transportation operations.

Corporate

During 2010, corporate spending is expected to total approximately $500 million, of which about $450 million represents capitalized interest on assets under construction.

Marathon is an integrated international energy company engaged in exploration and production; oil sands mining; integrated gas; and refining, marketing and transportation operations. Marathon, which is based in Houston, Texas, has principal operations in the United States, Angola, Canada, Equatorial Guinea, Indonesia, Libya, Norway, Poland and the United Kingdom. Marathon is the fourth-largest United States-based integrated oil company and the nation's fifth-largest refiner.