Marathon anticipating reduced drilling

Marathon Oil is reducing its drilling plans for Alaska.

The Houston-based major plans to drill between one and three wells per year in Alaska in 2011 and 2012, according to year-end financial filings released on Feb. 28.

In presentations made as recently as last September, Marathon said it planned to drill between two and six wells per year in the state between 2010 and 2012. After drilling nine wells in 2008 and six wells in 2009, Marathon drilled only three wells in 2010.

One of those 2010 wells, though, was an exploration well at the Sunrise prospect on Cook Inlet Region Inc. leases inside the Kenai National Wildlife Refuge. Marathon said that it “encountered a zone of interest” with the well, but did not release further details.

Historically, Marathon has been one of the most active companies in Cook Inlet. The company has ownership stakes in 10 fields, many of which it operates or owns outright.

Through the middle years of the 2000s, the company regularly drilled 10 or more wells each year in Cook Inlet, but in March 2009, in response to the economic downturn, the company announced “roughly a 40 to 60 percent” reduction in drilling for the year.

Although Marathon signed natural gas supply contracts with Enstar Natural Gas and Chugach Electric Association in 2010, the company will lose a market this spring when it mothballs a liquefied natural gas export facility on the Kenai Peninsula. Marathon owns a 30 percent interest in the facility and ConocoPhillips owns the remaining 70 percent.

—Eric Lidji