Scoop & Stack

Marathon Ramps up Activity in Oklahoma

Marathon Oil allocated $1.15 billion to activity in North America for 2016 with the majority focused on the Company’s three U.S. resource plays where it plans to bring 157-169 gross Company-operated wells to sales. While the Eagle Ford remains the company’s most important development asset, Marathon sees the largest resources potential in the SCOOP and STACK areas in Oklahoma.

In the Oklahoma Resource Basins, approximately $200 million will support 20-22 gross Company-operated SCOOP and STACK wells to sales. The Oklahoma program includes $195 million for drilling and completions, including an estimated $55 million for outside-operated activity. Marathon drilled five and brought on three gross wells in the Oklahoma resource plays during Q1,

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(Source: Marathon Oil, May 2016)

An average of two rigs in 2016 will focus primarily on lease retention in the STACK and delineation of the Meramec. The Company expects to be approximately 70 percent held by production (HBP) in the STACK by year end. While strengthening its position in the STACK, Marathon has also focused on the efficient South Central Oklahoma Oil Province, or SCOOP, where already more than 90 percent of its acreage is HBP. This portion of the Woodford shale play is considered as a liquid-rich area, which contains an estimated 70 billion barrels of oil. It has multiple pay zones of NGLs and oil, which could help the company to improve its production performance.

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(Source: Marathon Oil, May 2016)

Marathon’s capital allocation is small when measured by other operators’ combined spending. The leaders in the play – Newfield Exploration (NYSE:NFX), Devon Energy (NYSE:DVN) and Continental Resources (NYSE:CLR) – have much larger programs underway in STACK, with industry activity densely surrounding Marathon’s leases.

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(Source: Marathon Oil, May 2016)

The company has ~55,000 net acres in the Meramec and ~67,000 net acres in the Woodford in STACK already delineated by its own well results and offset operator activity.

Brandon Mikael, a U.S. Lower 48 upstream analyst for Wood Mackenzie, expects the Anadarko Basin’s SCOOP, Stack and Cana-Woodford production to exceed 1 MMboe/d by 2020, with about a fourth of that being oil and condensate.

Last 30 Days of Regulatory Filings – Spacing & Poolings

The past 30 days of regulatory filings indicate that Marathon is preparing to drill new wells in the most active counties in Oklahoma, Blaine, Grady, and Kingfisher counties.

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Credit: Oseberg

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