Marathon Oil closed on the Hilcorp acquisition and has added another 19,000 net acres and a gathering system to its Eagle Ford holdings. The company expects to close on another 6,800 net acres in the Eagle Ford soon. That brings Marathon’s total investment up to $4.5 billion for 167,000 net acres and additional gathering facilities. That’s a hefty price tag, but the company believes it has positioned itself in the core of one of the best shale plays in the U.S. Don’t expect development to slow down any time soon.
Early indications are well performance will exceed expectations. Current plans are to add another frack crew to the play this year and another in 2012 (total of 4) and to ramp up from 10 rigs currently to 17 by this time next year. Marathon has a strong belief in the long-term value of the Eagle Ford. That’s a win for economic development in South Texas.
Today, as Marathon Oil closes on the Hilcorp acquisition of 141,000 net acres in the Eagle Ford shale, largely in the core of the play, we already see better performance from these assets than originally anticipated. We begin this first day as operator of these key assets already producing nearly 1,000 net barrels of oil equivalent per day (boepd) more than our originally projected year-end exit rate. We also are closing on or have agreements to acquire additional acreage, also in the core of the play, that are expected to increase our total Eagle Ford position to more than 300,000 net acres by year end. Combined with our substantial positions in the Bakken and Anadarko Woodford, along with the emerging Niobrara shale play ………assets……enabling us to deliver 5 to 7 percent compound average production growth, 80 percent of which is estimated to be liquids, from 2010 to 2016.
Recent Eagle Ford transactions are expected to be funded largely from existing cash. Marathon Oil now expects its year-end acreage position across the Eagle Ford to be in excess of 300,000 net acres. Marathon Oil’s 2011 Eagle Ford exit rate is forecast to be approximately 18,000 net boepd, of which 80 percent is estimated to be liquids.
Marathon Oil is ramping up to 10 rigs by the end of the year and is scheduled to add a third crew dedicated to hydraulic fracturing in January 2012 and a fourth crew in June 2012. By this time next year, the Company expects to have 17 rigs operating in the play.
Read the full press release at marathonoil.com