With about 1.0 million net acres across four unconventional plays in North America, Marathon Oil Corp. has a resource base that should provide more than 1.0 billion barrels of incremental reserve bookings over the years, said James Bowzer, vice president, North American production operation, Marathon.

“In a very short period of time, we’ve assembled about 1.0 million acres of leases. We’ve got over 7,000 well locations over these plays. It’s 80% liquids and will require capex spending somewhere around $3.5 billion per year,” he told participants at Hart Energy’s DUO Conference in Denver, CO, on May 15.

The company’s longest-standing resource play is in the Bakken, which the firm entered in 2006. “We’ve built our position to a little over 400,000 acres. It’s got a resource base of about 350 million barrels. Currently, our production rate has built up to about 27,000 barrels per day (b/d) net,” he noted.

There are four core areas within the Bakken where Marathon is focused. Prospects within those areas include Hector, Ajax, Mermidon, Aeneas and Diomedes, the latter of which just started drilling in 2012.

Marathon assembled about 300,000 acres in the Eagle Ford with a potential resource base of about 500 million barrels.

The Eagle Ford “is our most active program,” Bowzer emphasized. “We’re running four full-time frac crews and 18 drilling rigs. We had no production a year ago, and now we’re up to 20,000 b/d net.”

The Woodford is an expanding play for the company with about 160,000 acres. “There are about 300 million barrels of resource. It is currently producing about 5,000 b/d, which is set to ramp up in the future. We’re actively pursuing this play with six workover rigs as we move into developing the rest of the Woodford,” he continued.

The company entered the Niobrara about 18 months ago. “We picked up about 200,000 acres in this play. We have about 144,000 acres net to Marathon, although we operate the acreage on a gross basis.

“We’ve been fortunate enough to bring in a good friend of ours -- Marubeni -- into the play with us in a 70/30 joint venture,” he said.

Its Niobrara resource base is relatively small compared to the other plays primarily because the company is in the exploration phase with the play.

“We’ve got two rigs running right now. We are focusing largely in Weld County, CO, at this point in time. We’re looking at additional spacing tests during 2012.

“For us, we have consistently said that school is still out on the Niobrara. There is no doubt there are going to be sweet spots. The Wyoming portion of the play in the northern portion of the basin doesn’t look as good. There are portions of the Colorado play that look really good.

“As you go further into the Wattenburg field, it gets pretty gassy,” he explained. “Given where gas and NGL prices are in the Rockies, that’s not our target.”

The real issue is going to be how to find the sweet spots, he emphasized. “We haven’t eliminated or defined anything. I think it took us over a year in the Bakken to get that kicked off.

“There are quite a few targets to test here. Clearly, there is not as much oil in place as in the Bakken. But, you don’t need a Bakken to make a good play. So, we don’t let that fool us in making our decisions,” he added.

Marathon has developed a new approach for making those decisions. Play execution allows the company to take what is has learned in one play and transfer it to the other plays.

The company has created three groups within the company for each play. It is how the company is able to integrate learning into all of its operations to increase the value of overall execution, Bowzer noted.

“In each play, we’ve set up a group of scientists, engineers, geoscientists and log analysts that are assigned specifically to execute what we have in front of us. They design procedures and approaches so that the company can get its work done effectively and efficiently,” he stated.

A massive amount of data comes out of the work of the first group. “We have a separate group of people to mine this data and go through the history to feed continuous changes into the team that is executing,” he continued.

The third group of people is looking at how the changes compare across the plays and where else these changes should be applied across other plays to improve overall execution and shale performance.

Another aspect of its implementation of new technology is called “sleeve maps” for improved recovery. “It is sequenced through time. It is really both areal -- how tight you’re getting in spacing -- and vertical,” he said.

Concerning the vertical section, “we know many of these formations communicate vertically, and there are some target formations that are close to each other. We know these can communicate. We are, in fact, trying to get these formations to do that to maximize recovery,” he added.

Stage alignment is also critical to maximum recovery. It is also important to minimize the instantaneous interference that occurs during stimulation.

The sleeve maps are designed to maximize recovery and minimize real-time interference.

Contact the author, Scott Weeden, at sweeden@hartenergy.com.

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