Marathon Oil’s 2015 production guidance unchanged

By The Bakken Magazine Staff | June 18, 2015

Marathon Oil believes its U.S. unconventional oil production guidance for the Bakken, Eagle Ford and Oklahoma Resource Basins will remain despite the exploration and production company’s activity and capital spending reduction plans. From the first quarter of 2014 to Q1 2015, the company has reduced production and other operating costs by roughly 25 percent. According to Lee Tillman, Marathon CEO, operation-related cost reductions come simply from hardwork. “There is no one magic bullet,” he said.

To reduce operations costs, the Marathon team has worked to coordinate deployment of contract labor, focus on compressor utilization, aggregate water systems and optimize its chemical programs. Savings from each area are durable, Tillman said, and can be made possible in any oil price scenario. The oil price environment has guided the team to adjust activity levels based on cash flows, Tillman also said. Such focus could bring the sale of roughly $500 million worth of noncore assets. “Our plan is to hold this activity level for the remainder of the year,” he said.

In the Bakken, Marathon is now incorporating its new fracture designs to all new wells. Its enhanced completion design is based on optimizing proppant loading, frack fluid volumes and stage density. The first 23 wells using the new design have recorded a 30 percent uplift in cumulative production volumes over the first 90 days. In 2015, Marathon expects to bring 53 to 63 gross operated wells to sale. The company’s rig count in the Williston Basin for the rest of the year should average two drilling rigs.