North American resource plays a big part of Marathon's 2010 drilling program

While Marathon Oil Corp.’s (NYSE: MRO) $5.1 billion 2010 CAPEX budget is 17% lower than last year, the company plans to advance its resource plays, including those in the Marcellus, Woodford, and Haynesville, and Bakken shales.

"Marathon's 2010 capital program will focus on upstream activity, with an emphasis on the development of sanctioned projects, potentially significant exploration wells and advancing our growing resource plays," said Clarence P. Cazalot, Jr., Marathon president and CEO.

In the company’s May report for the UBS Global Oil & Gas Conference, Marathon Oil focused partly on the North American resource plays and identified the areas as “core areas” for its 2010 exploration drilling program.

Marcellus
Marathon currently holds 78,000 net acres–70% operated, with net resource potential of 200-300 MMboe.

The company commenced its first well in the Marcellus play in West Virginia in the third quarter of 2009 and drilled three additional wells by year-end. In 2010, Marathon plans to drill three to five wells averaging 90% to 100% working interest, targeting the Marcellus shale reservoir at a 50% mix of horizontal and vertical tests.

Woodford
In 2009, Marathon participated and operated in a successful 13-well appraisal program in the Brickyard (Woodford) prospect, located in the northeast area of the Anadarko Basin, targeting the Woodford Shale resource play in Canadian County, Okla.

Year-end 2009 production from completed Woodford wells totals 6 million cubic feet of natural gas equivalent per day (MMcfed) net, with the company holding an average 35% working interest. Initial production ranges from 2.5 to 5.5 MMcfd. The company currently holds 52,000 net acres in the play.

Through 2010, Marathon plans to participate in 10 to 15 gross wells in the Woodford. With the successful development of the program, the company expects the play could yield an additional 200 to 300 net locations, with net resource potential of 170 to 270 MMboe.

Haynesville
In the Haynesville shale, Marathon holds more than 25,000 net legacy acres, with net resource potential of 100 to 150 MMboe. The company drilled one gross well in 2009.

In 2010, Marathon plans to drill one to two Haynesville wells, holding a 100% working interest. Activity will focus in central and southwest Shelby County, Tex.

North Dakota Bakken
“Exceeding expectations” is how the company phrased its results in the North Dakota Bakken in the May report.
The company holds 350,000 net acres, with an average working interest of 83%. The acreage is mostly held in the Williston Basin in Dunn, McKenzie, McLean, Mountrail and Williams counties in North Dakota.

In 2010, the company plans to increase rigs in the area from 4 to 6.

Marathon anticipates drilling approximately 264 gross wells over the next five years (61 during 2010, including four technology project wells), with the potential to have approximately 22 mboepd of net peak production by 2013.

Net sales for the 12 months ended December 2009 averaged 9 mbpd of liquid hydrocarbons and 4 mmcfd of natural gas, representing 14 percent and 1% of Marathon’s total US liquid hydrocarbon and natural gas sales, respectively.

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