Marathon’s $888 million Purchase Proved Right in STACK

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More than a year after Marathon Oil’s Regional Vice President of Midcontinent Assets, Wade Hutchings said Oklahoma’s Woodford Shale play had yet to reach its potential, the company’s efforts are supporting his belief.

Hutchings’ comments came at Hart Energy’s 2015 DUG Midcontinent conference. This month, Marathon wrapped up its $888 million acquisition of what it called “high-quality assets” in the STACK with plans to speed the work of putting more rigs into Canadian, Kingfisher and Blaine Counties in the third quarter of this fiscal year.

“Coupled with recent noncore divestitures, we’re delivering on our objective to further concentrate our capital allocation to the lower cost, higher-margin U.S. resource plays,” explained CEO Lee Tillman at a recent earnings conference call.

The comments came just a few weeks after OK Energy Today brought to light two big successful Marathon wells in the STACK.(See OK Energy Today July 21) The IRVEN John located northwest of he Chisholm Trail Technology Center west of Kingfisher produced 1,466 barrels a day along with 2,474 mcf of gas. It was completed May 29, a day after the OLIVE JUNE was completed at the same site, The OLIVE JUNE had production of 1,363 barrels of oil a day along with 1,755 mcf of gas. It was in the Meramec formation.

One report indicated the IRVEN JOHN actually had a 30-day production rate of 1,710 boe/d while the OLIVE JUNE’s 30-day rate was 1,570 barrels a day.

“Our Oklahoma asset team delivered two outstanding STACK Meramec wells with oil cuts above 70% while continuing to balance leasehold demands with acreage delineation,” said Tillman. The company also just closed its deal Aug. 1 to buy PayRock Energy Holdings, an Oklahoma city portfolio company of Encap Investments. (see OK Energy Today June 21)

The purchase of 61,000 more acres increased Marathon’s holdings in the state to 326,000 acres.

“Acquiring PayRock’s STACK position will meaningfully expand the quality and scale of Marathon Oil’s existing portfolio in one of the best unconventional oil plays in the U.S.,” said Tillman at the time of the June announcement.

And the two most recent successful wells proved his point.

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