Seeking Alpha
Oil & gas, small-cap, growth at reasonable price, hedge fund analyst
Profile| Send Message|
( followers)  

Marathon (MRO) has been increasing the number of stages it uses in Bakken well completions. This seems to be the new standard for several companies. I covered this in a recent article about Continental (CLR). Although it uses mostly short laterals, EOG Resources (EOG) is also increasing the number of stages. Whiting (WLL) is also increasing stages without increasing water volumes, or amounts of proppant.

Although Marathon's Eagle Ford acreage is its flagship play, it is working the middle Bakken and upper Three Forks hard. Bailey Field has been one of its most active areas. Here are some of Marathon's completions in this field.

2011 Bailey Field Results
NameDateChokeStagesWaterProppant60Day IP120Day IP
Trinka 41-18H3/1116/6420226872519600297213
Tim Eckelberg 44-22H12/1120/6430296442683840505339
Ella Guenther 21-29H7/1120/6420237902611720498374
Anderson 44-23H10/1115/6420278792781020535414
T Kupper USA 34-11H4/1124/6420259602488493342240
Marlin 44-12H6/1120/6420249572703640336247
Rosa Benz 44-23H4/1116/6415241342656420312244
Gertrude Tuhy 34-24H3/1120/641413623194874010582
Wardner 24-35H5/1118/6420231672988660390296

Bailey Field is located in the central portion of Dunn County. This is not the best acreage in the basin, but it is still very economic. Marathon's 2011 results are characterized by a low number of stages, low volumes of water and moderate amounts of proppant. These variables reinforce Marathon's below average results to date when compared to the competition. Marathon's Eagle Ford program is going quite well, so it is my belief its acreage in the Williston Basin has taken a little longer to develop as it is second on the priority list. It is making changes to its Bakken program in 2012, which should improve initial production rates and estimated ultimate recoveries or EURs. The table below illustrates these changes.

2012 Marathon Bailey Field Results
NameDateChokeStagesWaterProppantIP Rate(Bo/d)
Scheralee Dolezal USA 14-10H1/1228/643021454234030060Day=255
Paulson 34-9TFH1/1228/642024923221239060Day=239
Eckelberg 14-23H3/1224/643019862223022060Day=441
Eckelberg 14-23TFH3/1222/643020092235182853Day=370
Ben Reckard 44-22H2/1228/643020566233740060Day=658
Ben Reckard 41-27H2/1221/642720416201422060Day=569

With two exceptions in Bailey Field, Marathon used 30 stage fracs. It also lowered the amount of water and proppant. Less restrictive chokes were also applied to its new completion technique. Marathon has been clear in its intent to move to 30 stage fracs. This move has also prompted an increase in EURs from 400 MBoe to 500 MBoe in the Bailey Field area. Just two years ago that EUR was under 200 MBoe.

In summary, the current changes being made by Marathon have been positive. How positive is a little deceiving as the use of a less restrictive choke is allowing crude to flow with less restriction. Ben Reckard 44-22H was an excellent result given the geology of the area and compared to wells completed last year. Look for continued improvements as the year goes on. I would guess we will see Marathon increasing the amounts of water and proppant going forward.

Source: Bakken Update: Marathon Is Adopting 30 Stage Fracs In The Williston Basin