Marathon Oil grabbed headlines with its $3.5 billion (almost $25,000 per acre without consideration for production) acquisition of acreage in the Eagle Ford Shale in June of 2011 from Hilcorp Resources. The company was active in the oil window of the play prior to the acquisition and increased its holdings to over 285,000 net acres through the transaction. At the beginning of 2012, the company had further supplemented its acreage to more than 300,000 acres. The added acreage provides a drilling inventory that includes wells in the mature oil, volatile oil, condensate, and dry gas windows of the Eagle Ford Shale.
Marathon will be drilling in South Texas for many years to come and the Eagle Ford is now a core to the company’s production growth plans. Expect Marathon to utlize horizontal drilling with multi-stage completion across its entire acreage position.
The new Marathon Oil (NYSE: MRO) is the upstream unit of what was an integrated oil and gas company that is now both Marathon Oil and Marathon Petroleum. Marathon Oil will now solely pursue upstream growth. Marathon is active is several liquids rich areas including North Dakota’s Bakken Shale, Oklahoma’s Woodford Shale, and Colorado’s Niobrara Shale. The company headquarters is in Houston, TX. The company services its Eagle Ford operations through field offices in Pleasanton and San Antonio.
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Counties Where Marathon is Active
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- Atascosa County
- DeWitt County
- Frio County
- Gonzales County
- Karnes County
- Lavaca County
- Live Oak County
- Wilson County
Marathon Oil Eagle Ford Shale Quarterly Commentary
February 1, 2012
Marathon Oil closed on multiple Eagle Ford transactions in the fourth quarter, bringing its total acreage in the trend to more than 300,000 acres. Marathon’s operated rig count in the play is now 14, with plans to have 18 rigs operating in the play by the third quarter of 2012. The Company has four hydraulic fracturing crews under contract for 2012, with eight wells currently awaiting completion. Exit rates for 2011 were lower than anticipated, largely because of stricter choke management and a number of wells being offline for the installation of production tubulars. Currently the Company is producing approximately 15,000 boed net and reaffirms the full-year 2012 guidance of 30,000 boed net for the Eagle Ford.
December 7, 2011
Marathon’s 2012 Budget is Eagle Ford Directed
November 1, 2011
Marathon Oil is closing on agreements for the previously announced 141,000 net acres from Hilcorp in the Eagle Ford shale in south Texas, additional interests of approximately 19,000 net acres and a gas gathering system. Also, during the fourth quarter, the Company expects to close on another 6,800 net acres from previously announced tag-along rights. The total acquisition cost for these nearly 167,000 acres and the gathering system is expected to be approximately $4.5 billion, including projected closing adjustments and future costs carried by the Company. These 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.
August 2, 2011
On Marathon Oil’s existing acreage, four wells have been drilled and are being tested. During the second quarter, Marathon Oil announced an agreement to acquire Eagle Ford shale assets in south Texas for $3.5 billion, subject to closing adjustments. The transaction is expected to close Nov. 1 with an effective date of May 1. Including this transaction, Marathon Oil’s 2011 exit rate from the Eagle Ford is expected to exceed 13,000 net boepd.
June 1, 2011
“Marathon has captured a top-five acreage position in the core of the premier resource play in the U.S. since first entering the Eagle Ford in November 2010. This transaction enhances our already strong North America position focused on unconventional, liquids-rich resource plays that provide low-risk, scalable and profitable growth,” said Clarence P. Cazalot Jr., Marathon president and CEO. “This and other projects under development serve as a catalyst for Marathon to increase our projected Upstream production growth to 5 – 7 percent on a compound average annual growth rate (CAGR) during the period 2010 – 2016.
“In addition to establishing our position in the highest value oil and condensate core area of the Eagle Ford shale, these assets will deliver immediate production and reserve additions, an active Company-operated drilling program, significant resource potential, as well as solid economic returns and profitability that are immediately accretive to earnings and operating cash flow, and expected to be self-funding by 2014.”
Read the full press release at marathonoil.com
