Wednesday, May 4, 2011

Marathon Oil reported 11% Growth in Sales Volume Over the Same Period Last Year; Continues its Strategy of Focusing on Unconventional, Liquids-Rich Resource Plays

Marathon reported Q1 2011 sales volumes averaged 400,000 boepd, up 11% over the same period in 2010. This was primarily the result of increased liquid hydrocarbon volumes from the Droshky development in the GoM, which commenced production in mid-2010, and Norway, partially offset by the impact of the suspension of Libyan production. Natural gas sales from Equatorial Guinea were higher in Q1 2011 due to a first quarter 2010 planned turnaround at Marathon's production facilities.


Marathon’s production in Libya is currently suspended as a result of continued political and civil unrest. Marathon had expected to produce approximately 48,000 boepd from the Waha Concession during 2011. In the first quarter of 2011, production available for sale from Libya averaged 28,000 boepd, of which approximately 21,000 boepd was sold. On a cumulative basis, the underlift for Libya at the end of the first quarter was approximately 847,000 boe.
Marathon estimates Q2 2011 production available for sale is projected between 340,000 and 360,000 boepd, excluding the effect of any future acquisitions or dispositions. Anticipated full-year E&P production available for sale is between 345,000 and 365,000 boepd.

Unconventional, Liquid-rich Resource Plays
During the quarter, Marathon spud its first well targeting the Eagle Ford Shale formation in south Texas. As the Company continues its strategy of focusing on unconventional, liquids-rich resource plays, Marathon has increased its holdings in the Eagle Ford Shale to approximately 29,000 acres, with the rights to acquire an additional 61,000 acres. The Company also has reached agreements on approximately 30,000 additional acres and expects to close those transactions in the second quarter.
 In early April 2011, Marathon signed an agreement to assign a 30 percent undivided working interest in the Company's approximately 180,000 net acres in the Niobrara Shale play. The company is currently acquiring 2-D and 3-D seismic data and expects to participate in eight to 12 gross wells by year end.

Source:Derrick Petroleum E&P Transactions Database
Exploration expenses were $230 million for the first quarter of 2011, compared to $98 million in the first quarter of 2010. Included in exploration expenses for the first quarter of 2011 were dry well expenses of approximately $159 million, primarily related to the Flying Dutchman well located in the Gulf of Mexico and the Romeo well in the Pasangkayu block offshore Indonesia. In March 2011, Marathon completed an evaluation and determined the options to develop Flying Dutchman were not viable. For Romeo, the reservoir's thickness and quality confirmed pre-drill geologic models, but the well was determined to be dry.

Vero Energy 2011 May Corporate Presentation

2010 Reserve Highlights:

Increase in proved plus probable reserves: +28% to 32,941 mboe
Increases in proved reserves: +11% to 20,052 mboe
Reserves replacement of : 332% proved plus probable – 163% total proved

http://docsearch.derrickpetroleum.com/pageNav/view1/docId/12336-0000/Vero-Energy-2011-May-Corporate-Presentation.html

Crew Energy - May 2011 Corporate Presentation


Large resource of heavy oil (>900 MMB OOIP) & liquids rich gas (>500 BCF OGIP) - Production: 10,500 boepd - Reserves: Proven 23.7 MMBOE (48% liquids) - 2P 43.0 MMBOE (48% liquids)
http://docsearch.derrickpetroleum.com/files/12323/Crew%20Energy%20-%20May%202011%20Corporate%20Presentation.pdf

South Western Energy 2011 May Latest Investor Presentation

First Quarter 2011 Highlights:
Production of 115.0 Bcfe, up 28% -  2011 production guidance raised to 483 – 491 Bcf - Acreage in New Ventures outside of New Brunswick at  +620,000 net acres, up 27%
http://docsearch.derrickpetroleum.com/files/12319/SWN%202011%20May%20Latest%20Investor%20Presentation.pdf

Chesapeake hunting for JV partners for Utica and Mississippian plays.. Coming up billion dollar JVs!!

Chesapeake has reported in its Q1-2011 report that its leasehold has reached 1.2 million net acres in the Utica Shale Play in the Appalachian Basin and 1.1 million net acres in the Mississippian Carbonate Play in Northern Oklahoma and Southern Kansas. The company expects to initiate a joint venture process in the 2011 second half for both the Mississippian and Utica plays. In addition, the company has sold 180 Bcfe of reserves through ninth VPP for approximately $845 million. The sales are as part of their 25/25 plan - reduce debt by 25% and increase production by 25%.


Utica Shale Play:
In 2010, the company was the first to identify the potential of the Utica Shale and to initiate large scale leasing efforts in Ohio and western Pennsylvania for the Utica. To date, the company has drilled nine operated Utica wells and is currently drilling with three operated rigs. Chesapeake plans to increase its operated drilling activity in the Utica to six rigs by the end of the 2011 third quarter. Proved reserves are not yet booked for this acreage position.

Mississippian Play:
In 2007, the company was the first to initiate large-scale horizontal drilling in the Mississippian Carbonate play in northern Oklahoma and southern Kansas. To date, Chesapeake has drilled 53 operated Mississippian horizontal wells and has participated in the drilling of 36 non-operated Mississippian horizontal wells on its inventory of approximately 1.1 million net acres. Chesapeake is currently drilling with five operated rigs in the Mississippian play and plans to increase its operated drilling activity in the Mississippian to seven rigs by the 2011 fourth quarter.

Following is the table showing all the unconventional JV deals of Chesapeake



Total value of the package is estimated as follows -

Utica Shale (1.2 million acres):
  • Considering that Chesapeake will sell 30% interest (consistent in all Chesapeake JVs) in its Utica position, the number of acres under valuation is 360,000 acres. Chesapeake, in its Q1-2011 transcript call, disclosed that the company acquired Utica acreage for $1,500/acre. Taking a premium side, it is believed that Chesapeake would sell Utica acreage at $2,000-$2,500/acre or $720-$900 million. $2,000-$2,500/acre is also consistent with the recent Gulfport Energy's acquisition in Utica Shale ($2,300/acre).

Mississippian Play (1.1 million acres):
  • Chesapeake's Mississippian play constitutes 55% of its total Anadarko Basin acreage position. The proved and risked unproved reserves for Mississippian play are approximately taken as 50% of the total Anadarko Basin proved reserves (2,184 bcfe) and risked unproved reserves (12,900 bcfe).
  • Considering that Chesapeake will sell 30% interest in its Mississippian position, the acreage position, proved reserves and risked unproved reserves under valuation are 330,000 acres, 328 bcfe (~55 mmboe) and 1935 bcfe (~323 mmboe).


-- Value based on acreage and proved reserves: It is reported in Chesapeake’s Q1-2011 transcript call, that Utica acreage is more expensive than the Mississippian acreage. Therefore, the acreage cost for Mississippian play is taken half of the Utica acreage cost. At $1,000-$1,250/acre and $10/BOE of proved reserves, the value of the asset to be sold would be $880-$960 million.
-- Value based on acreage and risked unproved reserves: At $1,000/acre and $1.5/BOE of unproved reserves, the value of the asset to be sold would be $810-$900 million.

Hence, the total value of the assets to be sold could be in the range of $1,500 million to $1,800 million.

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