Marathon Oil's Bakken Production Holds Flat in Q3 - Drilling Faster

Marathon Oil Bakken Map

Marathon Oil's Bakken production held flat at 38,000 boe/d in the third quarter as the company shut in production to complete adjacent wells. Compared to the third quarter of 2012, production is up 27%.

Flat production from one quarter to the next isn't a knock on Marathon, it's going to happen with the expanded use of pad drilling. Unless operators stagger their pad drilling perfectly (near impossible), we'll see lumpy production additions going forward.

“Marathon Oil achieved strong financial results in the third quarter, delivering $1.44 billion in operating cash flows before working capital changes, and adjusted net income of $617 million, 29 percent higher than the second quarter,” said Lee M. Tillman, CEO. “All three business segments performed well, capturing the higher liquid hydrocarbon realizations both domestically and internationally, compared to the second quarter.”

Marathon hit total depth on 21 gross wells and brought 21 gross wells to production during the quarter. The 2013 exit rate for production is estimated at 40,000 boe/d.

The company's average drilling time for each well fell from 15 days in the second quarter to 14 days in the third quarter. That's 20% faster than one year ago.

Marathon also discussed successful results in the Three Forks. The company is targeting the upper portion of the play and expects to explore the lower benches in 2014. Marathon has drilled 58 Three Forks wells to date and the formation accounts for more than 20% of the company's production in the region.

Read the full release at marathonoil.com

Marathon Oil's Bakken Drilling Speed Improves 10% In The Second Quarter

Marathon Oil Bakken Map

Marathon Oil averaged 25 days from spud to spud in the first quarter and that time improved to 22 days in the second quarter. The company's spud to total depth for each well fell to 15 days.

Marathon hit total depth on 22 wells and brought 16 wells to production. That compares to 18 wells drilled and 22 wells brought to production in the first quarter.

The company's Bakken production grew 5% from 37,000 boe/d to 39,000 boe/d in the second quarter.

“Marathon Oil’s Bakken production averages approximately 90 percent crude oil, 5 percent NGLs and 5 percent natural gas. ”

The company noted average realized prices in the Bakken of:

• 88.65/bbl of oil
• $35.92/bbl of NGLs
• $4.47/mcf of gas sold

Read the full press release at marathonoil.com

Kodiak Nearing Completion Of Two 12 Well Pads

Kodiak Oil & Gas Bakken Three Forks Well Placement

Kodiak Oil & Gas is nearing completion of two well pads that will test six wells in the Bakken and six wells in the Three Forks. If successful, you might see a lot of development across the area shift to this strategy.

The Bakken and Three Forks wells are spaced approximately 800-850 ft apart. The wells in the Bakken and Three Forks are not stacked, but offset from each other to minimize interference. Not all six wells in the Three Forks are being drilled in the same zone either. Three are targeting the Upper Three Forks and three are targeting the middle Three Forks.

On one pad in the Polar area, 10 of the planned 12 wells had been drilled and on the other pad in the Smokey area 8 of the 12 planned wells had been drilled as of the beginning of May. The Polar area pad is expected to be completed and producing by late July.

“Kodiak had a solid first quarter and we are making progress towards the milestones that we set out for the year.”

— James Catlin, EVP

Other highlights from the first quarter included:

• Kodiak dropped one completion crew in March & April, but plans to add them back in May
• Production Averaged 21,700 boe/d in the first quarter
• Spending 20 days from spud to total depth
• Oil & gas infrastructure and salt water disposal infrastructure near 12-well pads is nearly complete
• Running seven rigs currently with plans to drop one later in the month

Bakken Opportunities Abound - Sioux Falls Seminar

Williston ND to Sioux Falls SD map

Bakken Shale opportunities are plentiful. That was the theme of a seminar held in Sioux Falls earlier in the week. South Dakota businesses are looking to capitalize on the opportunity in the oilfield in ND. To date, most oilfield services are fulfilled by companies from oil producing states on the coasts.

Highlights from the meeting include

• Bakken Shale development makes a $20 billion impact on the ND economy, alone
• The ND gross state product was $38 and the SD gross state product was $40 billion
• Over 9,600 mining workers live in Williams County, ND - The population was only 19,761 in 2000
• Housing developers are attempting to judge if there will be a resell market in five years - They've been asking that question for about five years.....
• Drilling times are 30% of what they once were and have fallen from 90 days to less than 30 days