HOUSTON, Oct. 30 /PRNewswire-FirstCall/ -- Marathon Oil Corporation (NYSE:
MRO) announced today that its Board of Directors has sanctioned two Gulf of
Mexico development projects, Droshky and Ozona. The Board approved a total
project cost of $1.3 billion for the Droshky development and $300 million for
the Ozona development.
"As we continue to strengthen Marathon's Gulf of Mexico portfolio, the
Droshky development will add profitable production and contribute
significantly to our near- and long-term growth," said Clarence P. Cazalot,
Jr., Marathon president and CEO.
The Company expects to initially book proved reserves of approximately 29
million barrels of oil equivalent (BOE) for Droshky and Ozona, with additional
bookings expected upon completion and with production history.
The Droshky discovery is located in approximately 2,900 feet of water in
Green Canyon Block 244, about 140 miles south-southwest of Venice, La., and
about 18 miles southeast of Shell's Bullwinkle platform. The project will
consist of four development wells, which will be tied back to Bullwinkle.
Marathon has secured the Noble Paul Romano rig to begin drilling in 2009, and
first production is targeted for 2010. Expected net peak production is about
45,000 barrels per day (bpd) of oil and 43 million cubic feet per day (MMcf/d)
of natural gas, after royalties.
The initial Droshky discovery well and two sidetracks were drilled in 2007
to a total depth of 21,190 feet and followed in 2008 by a second delineation
and sidetrack. Marathon holds a 100 percent working interest in Droshky.
The Ozona discovery is located in approximately 3,000 feet of water on
Garden Banks Block 515, about 175 miles southeast of Sabine, Texas, and about
six miles from Shell's Auger platform. Marathon has contracted with the Noble
Jim Day rig to complete one previously drilled appraisal well, which will be
tied back to the Auger platform. First production is expected in 2011, with an
anticipated net peak rate of about 6,000 bpd of oil and 13 MMcf/d of natural
gas, after royalties. Marathon holds a 68 percent working interest in Ozona.
Marubeni holds a 32 percent working interest.
Marathon is an integrated international energy company engaged in
exploration and production; oil sands mining; integrated gas; and refining,
marketing and transportation operations. Marathon, which is based in Houston,
has principal operations in the United States, Angola, Canada, Equatorial
Guinea, Gabon, Indonesia, Ireland, Libya, Norway and the United Kingdom.
Marathon is the fourth largest United States-based integrated oil company and
the nation's fifth largest refiner.
Unlike capital expenditures reported under generally accepted accounting
principles, the projected costs for the Droshky and Ozona projects discussed
in this release do not include capitalized interest. Capitalized interest is
budgeted at the corporate level.
This release contains forward-looking statements with respect to, the two
Gulf of Mexico development projects, proved reserves of liquid hydrocarbons
and anticipated future development and drilling activity. Some factors that
could potentially affect the two Gulf of Mexico development projects include
necessary regulatory and third-party approvals, transportation logistics,
availability of materials and labor, unforeseen hazards such as weather
conditions, and other risks customarily associated with construction projects.
The forward-looking statements related to proved reserves of liquid
hydrocarbons are based on certain assumptions including, among others,
presently known physical data concerning size and character of reservoirs,
economic recoverability, technology development, future drilling success,
production experience, industry economic conditions, levels of cash flow from
operations and operating conditions. Anticipated future development and
drilling activity may be affected by a number of factors or are based on a
number of assumptions including, among others, pricing, supply and demand for
petroleum products, amount of capital available for exploration and
development, regulatory constraints, timing of commencing production from new
wells, unforeseen hazards such as weather conditions, acts of war or terrorist
acts and the governmental or military response thereto, and other geological,
operating and economic considerations. The foregoing factors (among others)
could cause actual results to differ materially from those set forth in the
forward-looking statements. In accordance with the "safe harbor" provisions of
the Private Securities Litigation Reform Act of 1995, Marathon Oil Corporation
has included in its Annual Report on Form 10-K for the year ended December 31,
2007, and subsequent Forms 10-Q and 8-K, cautionary language identifying other
important factors, though not necessarily all such factors, that could cause
future outcomes to differ materially from those set forth in the
forward-looking statements.
Media Relations Contacts: Lee Warren 713-296-4103
Paul Weeditz 713-296-3910
Investor Relations Contacts: Howard Thill 713-296-4140
Chris Phillips 713-296-3213
