operator presentation

Key points from Marathon (operator) presentation:
- Very cost and completion design optimisation focused
- of $3.8bn capex budgeted allocated to Marathon's resource play interests, over half is being applied to Eagle Ford interests (18 rigs and 4 frac crews by year end)
- production growth forecasts are based upon production histories from Eagle Ford as at acquisition from Hilcorp;
- production since taking over as operator has met and is increasingly beating these forecasts
- well completion design is seeing material economic improvement through a combination of; centralisation of operations management through centralised facilities and monitoring (=lower operating costs and lower redundancy); longer well laterals by using sliding sleeves (now up to 8000ft lateral i/o 5000ft previously) = higher initial production rates and likely EURs; use of sliding sleeves has capacity to reduce 'cycle times' ie time
taken to drill, complete and tie-in, by up to 60% = drastically lower well costs thus improving NPV
- well spacing will be tested from this month (40, 60, 70acre); Marathon indicated that this will be implemented in 2013 full field development drilling plan