Marathon Oil Corp. will increase investment in its U.S. shale drilling activity and market UK and Norwegian North Sea assets for sale in 2014, company officials reported at Marathon’s analyst day in New York Wednesday.
The company will increase rig activity in its Eagle Ford and Bakken assets by 20 percent each, and increase rig activity by 100 percent in its Oklahoma Woodford operations, resulting in a 28-rig increase in its North America rig count. Marathon’s 2014 rig program is underpinned by 2.4 billion barrels of oil equivalent of 2P unconventional resource, which has doubled since 2011, and over 4,500 net well locations.
The company projects 2014 resource play production growth of greater than 30 percent in relation to 2013, and anticipates overall year-on-year production growth of approximately 4 percent, excluding Alaska, Angola and Libya. Marathon forecasts an estimated resource production play compound annual growth rate (CAGR) over more than 25 percent for the 2012 to 2017 time period.
“Our continued focus on operations and execution excellence across all our assets will help drive approximately 10 percent production growth in 2013, excluding Alaska and Libya,” said Marathon Oil President and CEO Lee Tillman in a Dec. 11 press release. “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.”
More than 60 percent of Marathon’s $5.9 billion budget for 2014 will fund the company’s North American operations. Marathon has earmarked approximately $3.6 billion of its capital spending to unconventional resource plays, including $2.3 billion in the Eagle Ford play in South Texas, just over $1 billion in the Bakken shale in North Dakota and $236 million in the Oklahoma Woodford.
Marathon plans to drill 385 to 405 gross wells, including 340-355 operated by Marathon in the Eagle Ford in 2014; its spending plans there include $225 million for central batteries and pipeline construction. The company also plans to drill 200 to 220 gross wells, including 75 to 85 operated by Marathon in the Bakken and 80 to 100 gross wells, including 18 to 24 operated by Marathon, in the Oklahoma Woodford. Marathon also plans to complete 22 to 26 existing gross wells in the Bakken.
Since first quarter 2012, the company has achieved growth of over 300 percent growth in the amount of oil and gas production from its U.S. shale operations that is available for sale, company officials noted in the presentation Wednesday.
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