Marathon Oil Corp. averaged 56,000 net barrels of oil equivalent per day of production in the Bakken during third quarter 2014, up 47 percent over the year-ago average and 12 percent over the previous quarter, Lee Tillman, Marathon president and CEO said in a Nov. 4 conference call.
“We’ve shifted up a gear in the Bakken,” Tillman said. “We brought 19 new wells to sales in the Bakken, and we recompleted 16 wells in the Hector and Ajax areas of the Bakken with 13 brought to sales.”
Tillman said eight of the new wells are piloting enhanced completions, with encouraging early results.
Marathon added an incremental drilling rig in late September to provide additional capacity for high-density spacing and enhanced completion pilots in the Bakken, Tillman said.
The company reached total depth on 25 gross company operated wells in the third quarter, compared to 19 gross wells reaching total depth in second quarter 2014, and the time to drill a Bakken well, spud-to-total depth, averaged 16 days in the third quarter.
Tillman also said that three of four high-density spacing pilots have begun drilling, with each pad comprised of six Middle Bakken and six Three Forks first bench wells per drilling-spacing unit.
Production from Marathon’s U.S. resource plays, Tillman said, is up more than 40 percent from third quarter 2013.
“Marathon Oil’s U.S. resource plays delivered strong operational performance in the third quarter, and we remain on track to achieve greater than 30 percent production growth year-over-year in the resource plays,” Tillman said. “Both our Eagle Ford and Bakken net production delivered double-digit growth compared to the previous quarter.”
Enhanced completions
More than 30 percent of Marathon’s advanced completion design Bakken wells are online, according to Tillman.
Lance Robertson, Marathon vice president of North America production operations, said 17 of 45 advanced completion wells were brought online to sales to date. The company has been testing those wells since the second half of the quarter.
The group is comprised of wells testing most specifically increased proppant loading; a majority of them have had up to 6 million pounds of proppant, he said.
“We’ve also tested incremental stages in those wells, surfactants in two or three of those wells, as well as incremental stages adding for small or more finite stage delivery, and then a change in fluid volume, both a decrease and in most cases an increase of fluid volume,” Robertson said. “And I would say in the overwhelming majority of those wells, the early response of the 30 day IP has been at or above type curve.
“We’d like to see those cumulative production volumes mature a little bit but we’re very encouraged by those results and we’ll have the balance of those wells, probably two-thirds to three quarters online in sales in the fourth quarter with a few of those completion pilots trailing into the first quarter,” Robertson said.
Recompletions
Robertson said Marathon’s recompletions in the Hector area had equal success with its recompletions in the Myrmidon area.
“What you would find in terms of operational basis as we go into recomplete wells, we’re going back into a drilling unit most of the time that has one or maybe two wells in a 1,280 acre unit and we’re going in to move to higher density full field development’” he said. “Those original wells weren’t using the best available technology that we understand today and they’re three, four maybe five years on production.
“We’re re-stimulating those wells to that modern best available technology as we drill and complete the rest of the wells on that pad for efficiency, all at the same time,” he said. “Otherwise those wells and pads would have to be shut in for some period as we do the offset stimulations, so rather than having expense workover, this is an opportunity for us to re-stimulate those wells on a capital basis and bring the EURs up.”
Robertson said Marathon will continue the recompletion program through the end of the year and evaluate its capital program for about 70 more wells that are viable candidates.
Weaker pricing
In third quarter 2014, Marathon realized an average price of $82.67 per barrel of liquid hydrocarbons in the Bakken, down from $95.24 per barrel in the third quarter of 2013, and down from $90.47 per barrel in the previous quarter.
The Bakken outperformed Marathon’s North America average price realizations, which were $80.89 in third quarter 2014, $90.49 in third quarter 2013, and $86.43 in second quarter 2014.
“Certainly in our core areas in the Bakken we have a lot of confidence going forward in their ability to compete per capital allocation, even with the commodity price correction,” Tillman said. “Those are very strong wells for us.”
