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Permalink Reply by Bluejack Farms on February 21, 2015 at 9:58pm

Paul Matinelli, you may be on to something. From a MI forum:

"
The only other thing that interests me in Michigan right now is that I saw a GasFrac Energy Services truck west bound on I96 in Novi Michigan last week and didn't know where it was going"

Posted today

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Permalink Reply by James Vanderink on February 27, 2015 at 5:47am

Houston-based player returns to area to amass a sizeable land position
Houston-based Marathon Oil is amassing a huge land position in the US state of Michigan through a series of transactions with other shale players who are leaving the area, allied with the aggressive leasing of state-controlled lands.

The move marks the active return for Marathon to an area it had largely abandoned more than a decade ago. The US independent now appears to control well over 400,000 acres of land.

The cornerstone of the new position is 230,000 acres and about a dozen wells in central Michigan that Marathon bought from Encana in late 2014.

Sources at both Encana and Marathon confirmed the deal but declined to give a purchase price.

The Encana position is centred around a six-county area including Kalkaska, Crawford, Cheboygan, Missaukee, Charlevoix and Roscommon counties.

Encana had actively tested the Ordovician Collingwood Shale across its acreage position with mixed results.

The best of the wells, the Beaver Creek 1-23 in Crawford County, had initial production as high as 4300 barrels per day of oil but the liquids content was 20%.

The wells were drilled on 30,000 acre units, allowing Encana to hold 146,000 acres by production, but some of the remaining acreage is likely nearing expiry, according to local sources.

Since the Encana deal, Marathon has added acreage from other Michigan players, including taking some leases from Devon Energy, which has been unwinding its original 220,000-acre Michigan position over the last year, where it is partnered with China’s Sinopec.

Devon transferred a series of leases in Roscommon County to Marathon in a transaction that closed in mid-February.

The company began marketing the Michigan acreage, about half of which has impending lease expirations, last year and carried out a series of transactions there after disappointing exploration results from both the Collingwood and the A-1 Carbonate. Finally, based on county land records, Marathon appears to be taking some acreage originally leased by Chesapeake Energy, via its subsidiary Northern Michigan Exploration and various leasing companies that helped the US shale giant amass around 450,000 net acres in the state.

Chesapeake is still fighting charges brought by the Michigan attorney general that it illegally tried to suppress lease prices in the state and rejected some leases without reason when it was no longer interested in the play.

While that dispute goes through the courts, Chesapeake is unable to sell the leases in question, but other holdings in the state appear have been eventually transferred to Marathon, according to land records.

In addition to buying cast-off acreage from competitors, Marathon began aggressively leasing land controlled by the state in late 2014.

The company dominated the state’s autumn lease sale, paying about $2.6 million for more than 148,300 acres of the roughly 152,600 acres that were awarded for lease.

Michigan hosts a variety of both conventional and unconventional drilling targets, but Marathon’s exact strategy is not yet clear.

The acreage it has picked up has potential for both the Collingwood Shale — a stratigraphic equivalent to the prolific Utica Shale in Ohio — as well as the A-1 Carbonate, which has drawn comparisons to the Middle Bakken carbonate that operators target in North Dakota. In either formation, Marathon is likely looking to apply new completion techniques it has perfected in developing the Bakken and the Eagle Ford Shale in Texas, where the company has aggressively tested different fluids composition, stage spacing and proppant loading strategies.

“As we’ve tested stage spacing, proppant loading perforation clusters and rate, we found a better completion design,” Marathon US onshore head Lance Robertson said of its Eagle Ford operations during a conference call. “As you would imagine we’re out testing additional enhancements to that design for future improvement.”

Marathon has not filed for new drilling permits yet, according to state regulators, but holds 15 active permits for new horizontal wells that were transferred from Encana, according to state records.

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