Marathon Oil’s budget for 2012 is Eagle Ford heavy. The company plans to spend $4.8 billion dollars next year, with more than $1.5 billion directed to the Eagle Ford Shale. This comes less than a year after the company acquired Hilcorp and KKR assets for $3.5 billion. The company has spent more than $4.5 billion buying Eagle Ford properties in 2011 alone, so its no surprise that Marathon is putting its money where its mouth is in 2012.
Marathon’s cash resources allow the company to spend heavily and subsequently bring production forward in earlier years. More production equals more value.
The company plans to ramp up from 10 rigs now to 17 rigs in 2012. With rigs that have the capability to drill more than one well per month, that equates to more than 200 Marathon operated wells in 2012.
Approximately $3.0 billion of the capital budget is allocated to E&P growth projects, with plans to drill approximately 250 – 300 net wells (500 – 530 gross) in 2012. Of that, $2.7 billion is concentrated on four key North America liquids-rich resource plays: the Eagle Ford shale in south Texas, North Dakota’s Bakken shale, the Anadarko Woodford shale in Oklahoma and the emerging Niobrara shale formation within the DJ Basin of southeast Wyoming and northern Colorado. The Company’s substantial plans for the Eagle Ford include ramping up to 17 rigs, drilling 155 – 170 net wells (200 – 210 gross, all company operated) and adding two additional hydraulic fracturing crews, bringing the total to four by mid-year 2012. Marathon plans to drill 55 – 70 net wells (165 – 175 gross, 65 – 75 Company operated) in the Bakken; 25 – 35 net wells (75 – 80 gross, 40 – 45 Company operated) in the Anadarko Woodford; and 15 – 25 net wells (60 – 65 gross, 30 – 35 Company operated) are projected for the Niobrara.
Read the entire press release at marathonoil.com