Marathon board approves GoM development projects

Marathon Oil's board of directors has sanctioned two Gulf of Mexico development projects, Droshky and Ozona.

Offshore staff

HOUSTON -- Marathon Oil's 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.

The company expects to initially book proved reserves of approximately 29 MMboe for Droshky and Ozona, with additional bookings expected upon completion and with production history.

The Droshky discovery is located in approximately 2,900 ft (884 m) of water in Green Canyon block 244 about 18 mi (29 km) 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 rigNoble Paul Romano to begin drilling in 2009, and first production is targeted for 2010. Expected net peak production is about 45,000 b/d of oil and 43 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 ft (6,459 m) and followed in 2008 by a second delineation and sidetrack. Marathon holds a 100% working interest in Droshky.

The Ozona discovery is located in approximately 3,000 ft (914 m) of water on Garden Banks block 515 about 6 mi (9.7 km) from Shell's Auger platform. Marathon has contracted the rigNoble Jim Day 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 b/d of oil and 13 MMcf/d of natural gas, after royalties. Marathon holds a 68% working interest in Ozona.

10/30/2008

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