SAN ANTONIO—There are certainly bigger and more talked about plays than the Eagle Ford, but Marathon Oil’s vice president of resource plays south, Todd Abbott, said that asset that stretches across a part of south Texas is a power player, too.
“The industry talks a lot about the Permian and rightfully so, it’s a tremendous resource out there,” Abbott said during his discussion Outperforming the Type Curve at DUG Eagle Ford Sept. 20. “What the industry doesn’t talk enough about is how commercially attractive the Eagle Ford is. I can put the returns of this asset up against anything in our portfolio and it compares favorably.
“We are completing wells quicker than we ever have, we are drilling wells faster than we ever have and that comes into the bottom line. It’s high oil productivity. The position we have has a really high oil cut. The LLS pricing is fantastic compared to some of the other basins.”
The Eagle Ford Shale has certainly been good to Marathon since it entered the play in 2011. Six years later, Marathon transitioned from rapid growth to efficient development and capturing cash flow from existing wells.
And the Eagle Ford is delivering while other plays are eating up cash flow.
“So when you put all of that together the returns are absolutely fantastic,” Abbott said. “I do believe the industry sleeps on the Eagle Ford a little bit because it doesn’t have the big headline potential of some of the other basins. But there is a reason we put more capital here than a lot of our other basins. It compares favorably.
“We believe there is a lot of running room left in the Eagle Ford for Marathon and the rest of the industry,” he said.
Abbott, who oversees the operations in the Eagle Ford and Permian Basin, said Marathon’s expectation of the Eagle Ford is to hold production relatively flat with as an efficient capital program as possible and then deliver free cash flow back to the company in order to grow the other assets like the Oklahoma Stack and Permian.
“So while they are consuming free cash flow, [The Eagle Ford] is generating free cash flow,” he said. “This fuels a lot of the other stuff.”
Abbott praised the Marathon team in the Eagle Ford, which as of the end of 2016 had 300 employees based in the region. The gains have been modest but consistent. The barrels of oil equivalent per day (boe/d) rose 2% between Q1 and Q2 in 2018 from 104,000 boe/d to 106,000 boe/d.
“Every year with more and more challenging set of circumstances this team has delivered better wells every year,” Abbott said. “Our 2018 90-day accumulative performance is 50% better than what we were drilling in 2015. That’s an acreage we would not have prioritize when we first entered back in 2011 when we came in and planted our flag in the Eagle Ford.
“So they are delivering more production, they are delivering better wells and they are giving capital back to us. It’s an absolute great story.”
While Abbott attributes a lot of the success to the team, he also said innovation and technological advances by the people of Marathon have made a significant difference as well.
Abbott pointed to drilling innovation which has led to more efficiency in drilling wells.
“That’s larger pads, that’s offline cementing, that’s higher spec rigs,” he said. “That’s really good crews that are out there understanding what they are doing and the repeatability of a stable program. Look at the technology and how it’s affecting our completions.
“We are completing wells in a quarter of the time it took us to complete them in 2012. That’s phenomenal. That’s just not crews getting better at their work but that’s also a lot of technology driving being smarter about how we stimulate those wells.”
A centralized digital oilfield model has allowed Marathon to offset being leaner on the surface than the company has ever been before. The digital oilfield model allows the company to remotely monitor and operate the wells from a digital nerve center.
That allows Marathon to use workers precisely where they are needed and can get better utilization out of their skillset, which makes the company really efficient in the basin.
“So when you put all of that together from the drilling side, completions, productions and the efficiencies it really tells the story about on all fronts we are trying to get smarter about how we do our business,” he said. “That’s something we are very intentional about at Marathon is making sure that people have the right mindset, have the right entrepreneurial process to say `Hey, how can I challenge what we are doing?’
“Sometimes it’s technical, sometimes it’s nontechnical. Good ideas come in a lot of different flavors.”
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