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

| About: Marathon Oil (MRO)

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
Name Date Choke Stages Water Proppant 60Day IP 120Day IP
Trinka 41-18H 3/11 16/64 20 22687 2519600 297 213
Tim Eckelberg 44-22H 12/11 20/64 30 29644 2683840 505 339
Ella Guenther 21-29H 7/11 20/64 20 23790 2611720 498 374
Anderson 44-23H 10/11 15/64 20 27879 2781020 535 414
T Kupper USA 34-11H 4/11 24/64 20 25960 2488493 342 240
Marlin 44-12H 6/11 20/64 20 24957 2703640 336 247
Rosa Benz 44-23H 4/11 16/64 15 24134 2656420 312 244
Gertrude Tuhy 34-24H 3/11 20/64 14 13623 1948740 105 82
Wardner 24-35H 5/11 18/64 20 23167 2988660 390 296

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
Name Date Choke Stages Water Proppant IP Rate(Bo/d)
Scheralee Dolezal USA 14-10H 1/12 28/64 30 21454 2340300 60Day=255
Paulson 34-9TFH 1/12 28/64 20 24923 2212390 60Day=239
Eckelberg 14-23H 3/12 24/64 30 19862 2230220 60Day=441
Eckelberg 14-23TFH 3/12 22/64 30 20092 2351828 53Day=370
Ben Reckard 44-22H 2/12 28/64 30 20566 2337400 60Day=658
Ben Reckard 41-27H 2/12 21/64 27 20416 2014220 60Day=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.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.