Marathon Oil Corp Earnings Call Nuggets: Bakken and Eagle Ford Wells, Budget Number
Bakken and Eagle Ford Wells
Doug Leggate – Bank of America Merrill Lynch: I have got a couple of quick ones hopefully on the operational questions I guess it dates on the call the Bakken and Eagle Ford well results stay a fair bit better than perhaps your underlying guidance had previously reflected so I am curious on those areas are you now ready to basically change your type curve specifically on the Eagle Ford 1,650 barrels per day I think was the condensate window that you had originally targeted. Are those numbers still good, I am hoping if you could talk a little bit about how much activity you likely had in the condensate window to run that out that’d be great?
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David E. Roberts Jr. – EVP and COO: Sounds like terrible questions. I’ll see if I can get to them all Doug, first all on the Bakken we are going to stick with where we are, we are pretty much consistently on where we said we are going to be type curve wise with the 30-stage fracs in the core area of the field as we start getting results from the Diomedes area, which is the western area of the field, which won’t occur until later this month when we actually get some pump equipment out there. We’ll take another look at those. Now with respect to Eagle Ford, a lot of chatter both from wells that we put out there and some of our partners have put out there and what we can say is that the high GOR area is generally exceeding our type curve expectations. We have not yet shifted our curves up. We are seeing some variability across the play. There are some areas that are little bit lower. In majority, the wells are behaving better and these are in areas that although we classify them as the high GOR areas, typically are falling at the low end of those GOR boundaries, 500 to 1,000. From an activity perspective, in the first quarter, we would have added approximately 20 to 25 wells and all of them would’ve been in the high GOR area, so all of our activity was essentially in that area, and so what we’ve been able to do since then in terms of our Q2 expectations is again we are largely still focused on the high GOR area, but importantly, our cadence has improved markedly. I would expect that we would be able to double the number of wells that we are going to add to our portfolio in the second quarter, and of that number, 25% are going to be in the condensate area. We are currently running six rigs in the condensate area. So we should start seeing some results from that area very quickly, but based on the fact that the high GOR wells are performing at or better than expectations, I have no reason to doubt that our type curves for the condensate wells are going to perform as well. So we are looking forward to seeing those results some time during this month.
Doug Leggate – Bank of America Merrill Lynch: Dave, my follow-up is a real quick one. The guidance for this current year is still a good number and if you could comment on the contribution from the acquisition? And I will leave it at that. Thank you.
David E. Roberts Jr. – EVP and COO: We are not moving off of our numbers in terms of what our guidance for existing acreage that we have is. I think critically in the earnings release we feel very good about what happened to us in April in terms of our ability to essentially add 1,200 barrels a day net on a weekly basis. Now that we are running 18 rigs across the portfolio with fully subscribed four frac crews, we believe that we are going to be able to add the 16 to 20 wells a month to the portfolio. So that guidance remains intact. We understand that we got a lot of work to do there. With respect to Paloma we have characterized – or that acreage position we characterized it as something that we will pick up 7,000 barrels a day when it comes into our portfolio hopefully in August. My view is that will the number that we get and you can look for that position to grow slightly over towards the end of year to may be 9,000 or 10,000 barrels a day. We will see, once we get a hold of it, we are going to be very careful with it. But on an annualized basis I guess that puts us in being able to talk about our overall Eagle Ford at between 32,000 plus barrels a day.
Arjun Murti – Goldman Sachs: Apologies if you just said this, but the 767 is not in the updated budget number for this year, the acquisition?
Clarence P. Cazalot Jr. – Chairman, President and CEO: That excludes that – correct. It excludes all acquisitions.
Janet F. Clark – EVP, Treasurer and CFO: It does include some follow-on capital for that acquisition
Arjun Murti – Goldman Sachs: Got it. I appreciate that. Can you comment at all on what you are seeing in terms of well costs in the Bakken and the Eagle Ford and then just any update on your Niobrara drilling?
David E. Roberts Jr. – EVP and COO: Arjun, we are still pretty comfortable with this 8.5 range for our Bakken well and that’s what we kind of anticipated once we got to a 30-stage frac. Any increases that we are seeing there are really ones that we’re driving in terms of me getting a little bit more fluid to the completions and whatnot. We are actually seeing some of the heat come off of the pressure pumping market across the U.S. and so that’s going to help us hold our costs then as far as that goes. In the Eagle Ford, we are still very comfortable with this $8.5 million again well cost there. We have fixed contracts, and so we are not seeing as much price relief potentially as we would like in that part of the basin. But one other thing, I would say is that we are seeing a lot of pressure on GOR pricing in South Texas, because of the hot activity, and our commitments I think are going to allow us to remain outside of some of that inability to get products. So, we feel pretty good about what our pricing is in terms of our key hot basins. We are running two rigs in the Niobrara. We are really in an important phase right now. We have got seven wells that we are doing completions on. We’ve done most of these with cementless completions. It’s a change from what we have done a little bit earlier. We brought one online this week. It’s very early days, but its flowing at little bit less than 500 barrels a day. We are typically seeing 200 barrels a day out of these wells on pumps, but we will see if this cementless completion actually works for us. We will know a little bit more towards the beginning part of June. But again our big issue there is we still are concerned with the fact that these in our view are 250,000 to 300,000 EUR wells. We are still drilling these wells for a little bit north of $5 million we’ve got to get that cost down to $4 million and get that completions. So as we said consistently this is an interesting exploration project, that’s how I characterize it, but we’ll get some more interesting data in the next 30 to 60 days.