Marathon Awarded Second Indonesian Offshore Exploration Block

Marathon Awarded Second Indonesian Offshore Exploration Block

Marathon Oil Corporation announced that its subsidiary, Marathon Indonesia New Ventures Limited, has been awarded a 49 percent interest and operatorship in the Bone Bay Block offshore Indonesia.

The Bone Bay Block is approximately 1.23 million acres (or equivalent to 213 Gulf of Mexico lease blocks) and is located predominantly offshore southern Sulawesi Island, in the Bone Bay region. It is a high potential, under-explored area with water depths ranging between 165 to 6,500 feet.

“Marathon is pleased to be awarded the Bone Bay block and we are looking forward to commencing exploration activities in 2009,” said Annell R. Bay, Marathon senior vice president of Worldwide Exploration. “Marathon is committed to a strong exploration program in Indonesia and this block is part of a continued effort to grow our portfolio of large-scale, high-potential blocks in the country.”

Marathon expects to enter into a Production Sharing Contract (PSC) with the Indonesian Government before the end of 2008. Current exploration plans call for the acquisition of 2D seismic starting in 2009, followed by drilling in 2011. Kaizan Oil and Gas LLC, a subsidiary of Black Gold Energy LLC, was awarded the remaining 51 percent interest in the Bone Bay Block.

The Bone Bay Block is about 200 miles southeast of Marathon’s Pasangkayu Block, which was awarded in 2006. Marathon subsidiary Marathon International Petroleum Indonesia Limited holds a 70 percent interest and operatorship in the PSC for the Pasangkayu Block, a 1.2 million acre block located predominantly offshore the island of Sulawesi in the Makassar Strait, directly east of the prolific Kutei Basin oil and gas production region. Water depth of the block ranges up to 7,200 feet.

At Pasangkayu, Marathon and partner Talisman (Pasangkayu) Ltd. (30 percent) have a work commitment of four wells. The Company completed 3D seismic acquisition in 2008, and led a consortium of six companies to secure a two-year rig contract for drilling in Indonesia. Transocean’s ultra-deepwater drillship Global Santa Fe Explorer will commence operations in Indonesia in 2010. The consortium has the option to extend this rig contract as needed.

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