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Marathon Reports Increase production, profits in the Bakken and Eagle Ford

March 2, 2015

Drilling in the Bakken, North Dakota. (Photo courtesy of Marathon Oil)

Marathon reports increased production, profits in the Bakken and Eagle Ford

Marathon Oil Corp. (NYSE: MRO) reports that its production from its U.S. operations increased by 35 percent overall with an average net production of 181,000 barrels of oil equivalent per day (boe/d). Production in the Bakken shale play grew by 31 percent and production in the Eagle Ford increased by 38 percent.

The production increase in the Bakken formation is attributed to higher density pad sites and when the wells were brought to sale. The company reached total drilling depths on 23 gross wells and had 17 gross operated wells brought to sale, 15 of which were enhanced pilot completions. These enhanced completion designs resulted in 42 or 55 tests being brought online. In a recent earnings report, the company stated that 18 of these pilot completion wells averaged more than 30 percent increases in overall production within the first 60 days. Production during the fourth quarter averaged about 55,000 net barrels of oil per day.

Marathon’s production in the Bakken averaged 88 percent crude oil, six percent natural gas liquids and six percent natural gas. The average time to drill a Bakken well from spud to total depth averaged about 16 days during the fourth quarter. Recently, the company finished drilling two high-density spacing pilots with six wells per horizon that are currently awaiting completion. A third well is currently being drilled.

Related: Despite oil price decline, Marathon Petroleum saw 19% profit growth in 2014

In a recent earnings report, Marathon Oil President and Chief Executive Officer Lee M. Tillman said, “Our North America [exploration and production] operations added net proved reserves of 288 million boe – mainly due to downspacing, drilling activity and improved well performance – amounting to a 37 percent increase over the prior year’s ending balance.” He added, “Though our U.S. resource plays generate competitive returns at current pricing, we’re taking action to materially reduce our 2015 capital program relative to 2014 to protect our financial flexibility.”

The company’s production in the Eagle Ford formation averaged 131,000 net boe/d, a 42 percent increase from the past year and a 12 percent increase from the previous quarter. Of the extracted minerals, 65 percent was crude oil and condensate, 18 percent natural gas and 17 percent natural gas liquids. The company reached total depth on 96 of its gross operated wells and brought 98 to sale during the fourth quarter. The time from spud to total depth for these wells averaged around 12 days and the high-density drilling sites average about four wells per pad.

Tillman said, “We are not opportunity limited and in fact, the current environment simply serves to underscore the importance of subsurface quality and execution at scale – advantages that are common to our positions in the Eagle Ford, Bakken and [other basins]. Our deep, multi-year drilling inventory is robust across a broad range of pricing scenarios and positions us strongly for a commodity price recovery. In the interim, we intend to pursue all options to expand our margins during this period of uncertainty – capital efficiency, investment high grading, early capture of service cost reductions, expense management and operational reliability.”