Marathon Accelerates Activity in The Bakken and Other US Domestic Plays

March 26, 2014 Kirk Eggleston

Marathon's Bakken and Three Forks Acreage Map

Marathon is continuing to ramp up its presence in US domestic shale plays, with increased activity expected in the Bakken Shale through the end of 2014. In a company statement in late March 2014, officials revealed that Marathon hit its target of a 28-rig program across the Eagle Ford, Bakken and Oklahoma-Woodford Shale plays at the end of January.

“Marathon Oil’s CEO Lee Tillman said, “We continue to have high confidence in our ability to deliver on our North America long-term production growth targets underpinned by strong resource growth through downspacing and well optimization. In addition, we are progressing the evaluation and appraisal of co-development opportunities with the Eagle Ford’s Austin Chalk and the Bakken’s deeper Three Forks benches.”

Marathon Bakken Operations Update

According to Marathon, the company's Bakken acreage accounts for ~800 mmboe in proven and probable reserves and resource potential. As of March 2014, Marathon had a 6-rig drilling program, and anticipates 75 - 85 net wells across the play in 2014. The company also expects to complete 20 - 24 net wells by the end of the year. The Bakken budget for 2014 remains at approximately $1 billion and 29% of the company' 2014 capital budget.

Marathon Targeting Deeper Three Forks Benches in Myrmidon Area

The Three Forks First Bench accounts for ~23% of proven and probable reserves. 45 gross operated wells are planned for the Three Forks in 2014. Six wells are planned in the lower benches of the Three Forks between 2014 - 2015. The initial focus will be on the Myrmidon area.

WPX Energy Sets Its Bakken Capital Budget at $580-600 Million in 2014

February 18, 2014 R.T. Dukes

WPX Energy will spend between $1.420-$1.523 billion in 2014, with $580-600 million directed to Bakken and Three Forks targets in the Williston Basin.

WPX is planning to add a rig to bring its operated total to five in 2014.

The company expects the added rig will allow the company to drill 62 gross operated wells, or 25% more than the ~50 wells the company drilled in 2013.

Also read:Halcon Lowers Its 2014 Capital Budget & Holds Production Guidance

“Increased oil volumes, efficient development of our resource base and enhanced balance sheet flexibility will help drive increased cash flows and better overall results,” said Jim Bender, CEO.”

The emphasis in liquids producing areas will drive production growth in 2014. WPX expects daily oil production from the Williston and San Juan to increase ~50% from 16,000 b/d in the first quarter to more than 24,000 b/d by year-end.

In total, 85% of the company's capital budget is split between liquids producing plays in the Piceance, San Juan, and Williston basins.

WPX's capital budget:

$580-600 million in the Williston Basin (oil)
$475-495 million in the Piceance Basin (gas & ngls)
$155-180 million in the San Juan Basin (oil)
$20-30 million in the Appalachia region
$10-15 million in legacy areas like the Powder River Basin
$100-115 million on land and exploration

Read the full press release at wpxenergy.com

Emerald Acquires Bakken Acreage in the Wiliston Basin for $74.6 Million

January 29, 2014 Kirk Eggleston

Emerald Oil acquired 20,800 net acres in the Williston Basin for $74.6 million in two separate deals in early January.

The company now controls 85,000 net acres in the area.

With the closing of this deal, Emerald is now the operator for 75% of its acreage. The company's purchase includes Bakken and Three Forks producing properties and an undeveloped leasehold in McKenzie and Williams counties in North Dakota. Without valuing production of 350 boe/d, the company paid a little more than $3,500/acre.

“McAndrew Rudisill, CEO, said, “This additional acreage expands Emerald’s presence in our Low Rider and Lewis & Clark focus areas of McKenzie County, ND where we have seen strong production growth as a result of our successful operated well program.”

Roughly 19,500 of the net acres are adjacent to the company's Low Rider operating area, with 17 of the 19 drilling spacing units acquired being in this area.

Approximately 62% of the acreage acquired is already held by production, with ~350 boe/d of current net production.

Emerald Bakken Acquisition Highlights:

Emerald acquired 20,800 net acres for $74.6 million in the Williston Basin
62% of acquired acreage is held by production at 350 boe/d
Emerald's assets now include 85,000 net acres in the basin

Hot Area for Acquisitions

Emerald is not the only company expanding it's acreage in the Bakken. In August of last year, Whiting Petroleum announced the acquisition of 39,310 gross (17,282 net) acres targeting the Bakken in North Dakota and Montana for $260 million.

Whiting's acreage is located in McKenzie and Williams counties in North Dakota, and Roosevelt and Richland counties in Montana.

In total, Whiting has 714,541 net acres in the region at a cost of $643 million or less than $900/acre.

Kodiak Sets 2014 Capital Budget at $940 Million - Expects 45% Growth

December 19, 2013 R.T. Dukes

Kodiak Oil & Gas' 2014 capital budget has been set at $940 million. That's down from approximately $1 billion in 2013.

Kodiak expects to spend $890 million drilling and completing ~100 net wells to production 45%.

$50 million is budgeted for infrastructure build-out and acreage acquisitions.

Kodiak has budgeted for seven operated rigs and a dedicated frack crew in 2014. An additional completion crew will be on standby and utilized on an as needed basis.

Production in 2013 is on pace to average 29,000 boe/d and the company believes 2014 production will average 42,000-44,000 boe/d. Kodiak currently has over 26,000 b/d locked in with hedges at $93.29/bbl in 2014.

Polar & Smokey Downspacing Results Look Promising

[ic-r]Two 12-well downspacing tests have yielded promising results. The 12 wells completed in the Polar area have averaged 618 boe/d over the first 120 days and the 12 wells in the Smokey area have averaged 627 boe/d over the first 60 days.

Kodiak estimates the Polar area downspacing unit is on pace to pay out in as little as 18 months.

Marathon Oil Plans To Spend $1 Billion in the Bakken in 2014

December 18, 2013 R.T. Dukes

Marathon Oil Bakken Initial Production Improvement

Marathon Oil plans to spend $1 billion of its $3.6 billion budget in North America in the Bakken in 2014.

As a result, the company's production is expected to grow from a little less than 40,000 boe/d in 2013 to a little less than 50,000 boe/d in 2014.

Marathon will run six rigs in 2014, with one rig dedicated to recompleting Bakken wells that were stimulated with open hole completions.

The company has transitioned from open hole completions to 20-stage completions then to 30-stage completions today. Over the first 1,000 days of a wells life, Marathon's current 30-stage completions are producing 122% more than open hole completions were a short time ago.

“We believe this standard of performance, coupled with continued resource growth, fully supports an accelerated investment in our three high-quality resource plays — the Eagle Ford, Bakken and Oklahoma Woodford.”

— Lee Tillman, CEO,

Marathon Oil's 2014 Expectations and Highlights

Targeted spud to total depth of 15 days
Well costs target of $7.0-7.8 million
Testing 4 Middle Bakken and 4 Three Forks (1st bench) wells per 1,280-acre unit
Planning 6 Three Forks (2nd bench) well tests
Potential to recomplete 100 wells that were stimulated with a open hole completion (increasing reserves 280,000 boe per well)
Inventory of ~2,300 gross wells over 370,000 net acres in the Bakken and Three Forks
Probable resources of 630 million barrels
Expecting production to grow to ~70,000 boe/d by 2017

Read the company's full capital budget press release at marathonoil.com