Marathon Oil Corp. executives have said they would make the Eagle Ford Shale a focal point of their strategy this year.
Now the Houston-based company’s fourth quarter 2012 report to investors gives more detail on its plans.
The Eagle Ford will make up an increasing share of the company’s domestic production, from about 18 percent last year to about 40 percent in 2013.
Here are some of the key takeaways from a recent call with analysts:
- The company ended 2012 producing more than 65,000 barrels of oil equivalent (which includes the mix of crude oil, natural gas liquids and dry natural gas that comes up from wells) per day in the Eagle Ford. In January it was averaging 70,000 barrels a day, and that number keeps increasing. Marathon’s target for this year is 85,000 barrels per day.
- Marathon is running 18 drilling rigs in South Texas. It also has five hydraulic fracturing crews, which come in after the well is drilled and pump a mix of water, sand and chemicals at high pressure down the hole to break the rock and let the oil and gas flow out of the tight shale rock.
- Marathon is getting faster thanks to multi-well pads. The company drills multiple wells on the same site, which means less travel time for crews and equipment. It’s taking 19 days from the start of one well to the start of the next. That means Marathon may be able to reduce down to 16 drilling rigs in the field this year.
- That means it’s costing Marathon less to complete a well in the Eagle Ford. The cost is dropping from around $8.5 million to around $8.1 million. (Its wells in the Bakken Shale in North Dakota cost $8.5 to $8.8 million).
- Marathon has nine pilot wells in the field, which it will report on later this year.
- It plans 290 to 295 wells in the Eagle Ford this year.
CEO Clarence Cazalot said, “We could have a decade of drilling out here at current drilling levels … I think at this time, I think we see tremendous upside for this play. We’re going to be in this play for a long period of time …”
Marathon has 230,000 acres in the core of the Eagle Ford field.