Marathon Board Approves Deepwater Gulf of Mexico Droshky and Ozona Development Projects

Marathon Board Approves Deepwater Gulf of Mexico Droshky and Ozona Development Projects

Marathon Oil Corporation announced 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.

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