Marathon Oil Corp. is stepping up activity in Oklahoma and in the Eagle Ford Shale. The company said it also will resume drilling in the Bakken Shale during the fourth quarter.

"We're increasing our rig count by 50% in the fourth quarter while remaining within our existing $1.3 billion capital program," said CEO Lee Tillman. "This acceleration will have us well positioned to resume sequential production growth in the resource plays by the second half of 2017. Our planning process continues, but the preliminary five-year view for the resource plays supports a compounded annual growth rate of 15 to 20% within cash flows at flat $55 WTI."

North America production available for sale averaged 216,000 net boe/d for the third quarter compared to 224,000 net boe/d in the second quarter. On a divestiture-adjusted basis, production was up 3% over the prior quarter and down 7% from the year-ago period. Third quarter North America production costs were 12% lower than the previous quarter and 37% lower than the year-ago period. Unit production costs were $5.70/boe, down 9% and 23% for the previous and year-ago quarters, respectively.

"With our ongoing noncore asset sales and recent STACK [Sooner Trend of the Anadarko Basin, mostly in Canadian and Kingfisher counties] acquisition [see Shale DailyAug. 5], our commitment to concentrating and simplifying our portfolio to the U.S. resource plays is clear," Tillman said during a conference call Thursday. "Couple that with the $5.3 billion of liquidity, including $2 billion of cash, we have on our balance sheet, along with outstanding operational execution and a very competitive cost structure, we're poised to continue our execution momentum in 2017 and achieve profitable growth within cash flow at moderately higher prices."

Marathon Oil's unconventional Oklahoma production averaged 41,000 net boe/d during third quarter, an increase of 52% compared to 27,000 net boe/d in the prior quarter and up 78% compared to 23,000 net boe/d in the year-ago quarter. During third quarter, Marathon Oil brought online 10 gross company-operated STACK Meramec wells and two SCOOP (South Central Oklahoma Oil Province) Woodford wells. The Marjorie and Lloyd volatile oil wells, both extended lateral Meramec wells in eastern Blaine County, achieved 30-day production rates of 2,845 boe/d (69% oil) and 2,010 boe/d (73% oil), respectively. Both wells were completed with 2,900 pounds of proppant per lateral foot. The Firestone well, a standard lateral black oil well in Kingfisher County, achieved a 30-day production rate of 1,810 boe/d (47% oil). In Canadian County, the Hardy single lateral well had a 30-day rate of 1,870 boe/d (56% oil). The company is further increasing activity from four to five rigs in the fourth quarter, with activity focused in the STACK.

Eagle Ford Shale production averaged 97,000 net boe/d, compared to 109,000 net boe/d in the prior quarter and 128,000 net boe/d in the year-ago quarter. The sequential production decrease was in line with expectations due to base declines and activity levels. During the third quarter, the company brought 36 gross (24 net) operated wells to sales, of which 20 were lower Eagle Ford, 15 upper Eagle Ford and one Austin Chalk. The unbounded Hausmann Lower Eagle Ford oil well, completed with a more intense stimulation and 200-foot stage spacing, averaged 2,285 boe/d (81% oil) over 30 days. The Bailey Retzloff 508 Upper Eagle Ford condensate well achieved a 30-day rate of 2,345 boe/d (50% oil). Third quarter completed well costs were below $4 million, down approximately 20% from the year-ago quarter. The company expects to increase Eagle Ford activity from four to six rigs in the fourth quarter.

In the Bakken Shale, Marathon Oil averaged 54,000 net boe/d of production in the Bakken during third quarter 2016, compared to 53,000 net boe/d in the prior quarter and 61,000 net boe/d in the year-ago quarter as strong well productivity from the Clarks Creek pad and high reliability continued supporting the base production. Three gross wells in East Myrmidon were brought to sales in the third quarter, all performing at or above expectations with completions ranging from 600 to 1,500 pounds per lateral foot of proppant and 45 to 50 stages per well. The Rufus well in the first bench of the Three Forks achieved a 30-day production rate of 2,635 boe/d (80% oil), and the Hannah Three Forks first bench well achieved 2,100 boe/d (80% oil). Additionally, the Maggie Middle Bakken well achieved 2,190 boe/d (80% oil) over 30 days. Completed well costs averaged below $6 million per well. The company said it plans to return to drilling in the Bakken with one rig to be added in the fourth quarter.

Marathon Oil said it expects fourth quarter North America production available for sale to average 205,000 to 215,000 net boe/d. Fourth quarter international production available for sale (excluding Libya) is expected to be within a range of 120,000 to 130,000 net boe/d. The company raised the low end of its full-year 2016 Exploration and Production unit production guidance range, resulting in a new range of 335,000 to 345,000 net boe/d.

Marathon Oil reported a third quarter net loss of $192 million (minus 23 cents/share) compared with a net loss of $749 million (minus $1.11/share) in the year-ago quarter. The adjusted net loss for the third quarter was $97 million (minus 11 cents/share) compared with an adjusted net loss of $138 million (minus 20 cents/share) in the year-ago quarter.