Marathon Turns More Eagle Ford Wells to Sales in Q2

Tillman: Double-Digit Eagle Ford Production Growth Expected Through Remainder of 2014
Marathon Eagle Ford Drilling

Marathon Eagle Ford Drilling | Click to Enlarge

In Marathon Oil’s second quarter report released on Tuesday, higher density pad drilling and improved execution techniques were credited for a 55% quarter-on-quarter increase in gross operated wells turned to sales. The average time to drill an Eagle Ford well in the second quarter of 2014, spud-to-total depth, was 13 days – the company’s goal for the year is 11 days.

Marathon’s average net Eagle Ford production was 102,000 boe/d, representing an increase of 26% year-over-year and 6% quarter-on-quarter. Approximately 66% of net production was crude oil/condensate, 16% was natural gas liquids (NGLs) and 18% was natural gas.

Recently, Marathon sold its Norwegian assets for $2.7 billion to re-focus capital investments in the Eagle Ford Shale and other U.S. domestic assets. At the end of the second-quarter, Marathon had approximately $1.1-billion in E&P capital expenditures across its North American asset portfolio.

Read more: Marathon Oil Sells Norwegian Business to Focus on U.S. Assets

Marathon Eagle Ford Enhanced Completion Design

According to company officials, enhanced Eagle Ford completion design is delivering strong preliminary results. Wells with 180-day cumulative production are yielding on average 25%  improvement relative to modeled type curves.

Marathon CEO Lee Tillman said, “we have high confidence in Eagle Ford volumes growth as our well results continue to outperform modeled type curves and deliver strong economics. This quarter we brought 76 gross operated Eagle Ford wells to sales. We expect that momentum to carry forward, generating double-digit production growth quarter-on-quarter in the Eagle Ford for the remainder of 2014.”

Marathon Austin Chalk/Upper Eagle Ford Update

Marathon Oil continued its successful delineation of the Austin Chalk/Upper Eagle Ford for co-development with an initial 15,500 net acres now delineated. During the second quarter, the company brought online three Austin Chalk/Upper Eagle Ford wells, including two in the condensate window: the Children Weston 4H and the Franke well, which had a 30-day initial production (IP) rate of approximately 1,650 boe/d (73% liquids). The third well with a 30-day IP rate of 600 boed (90% liquids) was the first in the black oil window. Nine additional Austin Chalk/Upper Eagle Ford wells are currently being drilled, completed or awaiting first production.

Read more at MarathonOil.com

Warwick Energy Closes Deal for 7,300 Net Eagle Ford Acres

Acquired Acreage Has Current Production of ~1,200 Net boe/d in Live Oak, Atascosa and Karnes Counties
ConocoPhillips Eagle Ford Map

ConocoPhillips Eagle Ford Map | Click to Enlarge

Oklahoma-based Warwick Energy announced in June of 2014 that the company closed its purchase of R/C Sugarkane LLC, an Eagle Ford upstream oil and gas company, last month.

At closing, Warwick Energy gained R/C Sugarkane’s 7,300 net Eagle Ford acres, with current production of ~1,200 net boe/d in Live Oak, Atascosa and Karnes counties. The deal also included R/C Sugarkane’s gathering and other related midstream infrastructure in the play. In April of 2014, Warwick announced it agreed to purchase R/C Sugarkane from affiliates of a New York-based private equity firm, Riverstone Holdings LLC, for an undisclosed amount.

Read more: Warwick Energy Buys Eagle Ford’s R/C Sugarkane for Undisclosed Amount

According to Warwick officials, the operators of the acquired acreage are ConocoPhillips, Marathon and BHP Billiton. Warwick officials say they are encouraged by downspacing results and optimizations being achieved by these operators.

Warwick CEO Katherine Richard, said in a company statement, “the Eagle Ford Shale is a world class, liquids-rich resource play and through this acquisition we have acquired a multi-year drilling inventory that is both substantially de-risked and held by production.

Warwick was founded in 2010, and manages non-operated oil and gas interests across the country, with interests in over 5,000 wells in 13 states. The R/C Sugarkane acquisition will be funded by ArcLight Capital Partners affiliated equity investors.

Read more at warwick-energy.com

Marathon Oil Sells Norwegian Business to Focus on U.S. Assets

Marathon to Net ~$2.1 Billion at Closing
Marathon Oil Eagle Ford Acreage

Marathon Oil Eagle Ford Acreage | Click to Enlarge

Houston-based Marathon Oil Corporation announced in June of 2014 that it is selling its Norway business for $2.7 billion to re-focus capital investments in the Eagle Ford Shale and other U.S. domestic assets.

The buyer, Norwegian-based Det Norske Oljeselskap ASA, will take on ~700-million of Marathon’s debt from the deal, leaving Marathon with approximately $2.1 billion in proceeds at closing.

According to Marathon CEO Lee M. Tillman, the company is focused on simplifying and concentrating its business, with a primary focus on its U.S. resource plays, including the Eagle Ford. This divestiture is one of several deals Marathon has made in the past few years. Since 2011, the company has divested $6.2 billion in assets.

In a corporate statement, Tillman said, “Marathon Oil has a deep inventory across three high-quality U.S. resource plays with expanding opportunities to further accelerate activity. Such organic growth will be our first priority for additional capital allocation.”

Currently, Marathon has 211,000 net Eagle Ford acres. During the first-quarter of 2014, the company averaged 96,000 net boe/d, which was an increase of 7% over the previous quarter.

Read more at MarathonOil.com 

Marathon Increases Its Eagle Ford Resource Estimate to 1 Billion Barrels

Co-development of the Austin Chalk and Eagle Ford Planned
Marathon Eagle Ford and Austin Chalk Development Plan

Marathon Eagle Ford & Austin Chalk Development Plan

Marathon Oil has increased its total resource estimate for the Eagle Ford from 469 million barrels initially to ~1 billion boe today.

The company will run 18 rigs throughout 2014 in the the Eagle Ford.

In addition, Marathon will pursue developing both the Austin Chalk and Eagle Ford in the area. [Read more...]

Marathon Oil Expects to Exit 2013 Producing 100,000 boe/d from the Eagle Ford

Drilling & Completion Costs Are Down More Than 20% Since Q3 2012
Marathon Oil Eagle Ford Acreage Map & Improving Well Performance

Marathon Oil Eagle Ford Acreage Map & Improving Well Performance | Click to Enlarge

Marathon Oil’s Eagle Ford production averaged more than 90,000 boe/d at the end of October and is on pace to eclipse more than 100,000 boe/d by year-end 2013. Another important note is that more than 70% of oil production is now being transported by pipelines. [Read more...]

Marathon Oil’s Eagle Ford Acquisition Includes 4,800 Acres – $97 Million

Marathon Oil Eagle Ford Acreage Map & Improving Well Performance

Marathon Oil Eagle Ford Acreage Map & Improving Well Performance | Click to Enlarge

Marathon Oil announced three significant items on September 10th. The company plans to repurchase $1 billion in common stock, sell an interest in Angola for $590 million, and complete an acquisition of 4,800 acres in the Eagle Ford for $97 million. [Read more...]

Magnum Hunter Resources Completes Sale To PVA – Still Targeting Eagle Ford & Pearsall

Pearsall Well Produces Almost 600 Boe/d
Magnum Hunter Resources Acreage Map

Magnum Hunter Resources Acreage Map | Click to Enlarge

Magnum Hunter Resources (MHR) completed the sale of 19,000 net acres in the Eagle Ford to Penn Virginia for approximately $400 million in the second quarter. The deal was for the majority of the company’s Eagle Ford holdings.

Magnum Hunter retained approximately 7,000 net acres prospective for the Eagle Ford and Pearsall Shale formations in Atascosa, Fayette, and Lee counties. Two wells were completed and the company plans to explore and develop its acreage further. [Read more...]

Marathon Oil Writes Down Eagle Ford Acreage, But Grows Production 22%

Eagle Ford Properties Realize A $340 Million Impairment
Marathon Oil Core Eagle Ford Acreage

Marathon Oil Core Acreage | Click to Enlarge

Marathon Oil is writing down $340 million in unproven acreage in Bee, DeWitt, Lavaca, and Wilson counties.

The acreage isn’t necessarily bad, but it either doesn’t compete with the rest of Marathon’s acreage or lease expirations are simply coming quicker than the company can deploy rigs (capital).

After making several acquisitions over the past few years, it really comes as no surprise. [Read more...]

Typical Eagle Ford Well Start to Finish Video – Marathon Oil

Watch As 100s of Contractors and Employees Move On and Off Location

This is a great time lapse video of a typical Eagle Ford well captured from start to finish by Marathon Oil. The video was shot over a period of a few months.

[Read more...]

Marathon Oil’s Capital Budget Favors the Eagle Ford in 2013

South Texas Gets 40% of Marathon's 2013 Capital Budget
Marathon Oil Core Eagle Ford Acreage

Marathon Oil Core Acreage | Click to Enlarge

M arathon Oil’s Eagle Ford assets will be the beneficiary of $1.9 billion in spending in 2013. Marathon released plans to spend $5.2 billion in 2013, with almost 40% of the total earmarked for South Texas.

Approximately 65% of the company’s budget is allocated to “Growth” assets and you guessed it. The Eagle Ford is a “Growth” asset for the company. That’s why $1.9 billion is allocated toward the Eagle Ford. Current plans call for the drilling of 275-320 gross (215-250 net) operated wells in 2013. [Read more...]

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