A healthy slice of Marathon Oil Corp.'s $4.8 billion capital, investment and exploration budget for next year is targeted at the Eagle Ford Shale play in South Texas as the company continues to focus on liquids-rich assets in the United States.
Liquids-rich plays are seen as providing the greatest amount of the company's projected 5-7% compound average production growth from 2010 to 2016, said CEO Clarence P. Cazalot Jr.
"Approximately two-thirds of our 2012 capital spending next year is allocated to our growth assets, and nearly half of that amount is designated to substantially ramping up our operations in the Eagle Ford Shale," he sad. "A large portion of our planned spending on these growth assets will also allow us to build on our substantial positions in the Bakken and Anadarko Woodford shale plays and continue to establish our business in the emerging Niobrara shale play of the DJ [Denver-Julesburg] Basin."
About $3 billion of the capital spending budget is allocated to exploration and production growth projects. Of that, $2.7 billion is concentrated on the Eagle Ford, Bakken, Anadarko Woodford and the Niobrara formations. The company's "substantial plans" for the Eagle Ford include ramping up to 17 rigs, drilling 155-170 net wells (200-210 gross, all company-operated) and adding two additional hydraulic fracturing crews, bringing the total to four by mid-2012.
Marathon started this year with an agreement to pay $3.5 billion to acquire the Eagle Ford Shale assets of Hilcorp Resources Holdings LP. Combined with other transactions during the year, the company set out to more than double its Eagle Ford position to 285,000 net acres. Some analysts at the time of the Hilcorp deal estimated that Marathon was paying as much as $25,000/acre (see Shale Daily, June 2). It was a transaction during late 2010 that brought Marathon to the Eagle Ford (see Shale Daily, Nov. 30, 2010).