Marathon Oil Corporation Completes Acquisition of Western Oil Sands
HOUSTON, Oct. 18 /PRNewswire-FirstCall/ — Marathon Oil Corporation announced today that it has completed its acquisition of Western Oil Sands Inc. (TSX: WTO) through a cash and securities transaction of approximately US$5.8 billion, plus Western’s outstanding debt valued at approximately US$1.1 billion, for a total transaction value of US$6.9 billion.
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Under the terms of the agreement, Western shareholders will receive CDN$3.8 billion in cash (US$3.9 billion at the current exchange rate) and shares of Marathon common stock or securities exchangeable for Marathon common stock aggregating to 34.3 million shares valued at US$1.9 billion(1).
Trading in Western common stock on the Toronto Stock Exchange will terminate as of the close of trading on Oct. 19, 2007.
Commenting on this transaction, Clarence P. Cazalot, Jr., president and CEO of Marathon said, “Marathon’s acquisition of Western will enable us to realize our fully-integrated strategy to link oil sands production with heavy oil upgrade projects at our refineries, and thereby maximize both the recovery and value of these assets. The world-class Athabasca Oil Sands Project provides access to total net resource of approximately 2 billion barrels of mineable bitumen while there is an additional 600 million net barrels of potential in-situ resource, together providing significant future growth opportunities.”
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, Texas, 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.
(1) Based upon the average closing price of Marathon common stock for the five-day period around the initial announcement of the Western acquisition.
This release contains forward-looking statements concerning the strategy to link oil sands production with heavy oil upgrade projects at our refineries, total net resource of mineable bitumen, and potential in-situ resource. This forward-looking information may prove to be inaccurate and actual results may differ materially from those presently anticipated. Factors that could affect the potential heavy oil refining upgrading projects include results of front-end engineering and design work, approval of our Board of Directors, inability or delay in obtaining necessary government and third-party approvals, continued favorable investment climate, and other geological, operating and economic considerations. The forward-looking information with respect to net resource of mineable bitumen and potential in- situ resource is based on certain assumptions, including, among others, presently known physical data, economic recoverability and other operating considerations. In accordance with “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, 2006, and in 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.
Cautionary Note to U.S. Investors: The United States Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. SEC regulations classify “mined bitumen” as mining-related and not part of conventional oil and natural gas reserves. Marathon Oil Corporation uses certain terms in this press release, such as “net resource” and “in-situ resource,” that the SEC’s guidelines strictly prohibit us from including in filings with the SEC. U.S. Investors are urged to consider closely the disclosures in Marathon’s periodic filings with the SEC, available from us at 5555 San Felipe, Houston, Texas 77056 and the Company’s Web site at http://www.marathon.com/. You can also obtain this information from the SEC by calling 1-800-SEC-0330.
Media Relations Contacts: Lee Warren 713-296-4103 Scott Scheffler 713-296-4102 Investor Relations Contacts: Ken Matheny 713-296-4114 Howard Thill 713-296-4140 Michol Ecklund 713-296-3919
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Marathon Oil Corporation
CONTACT: Media Relations, Lee Warren, +1-713-296-4103, or ScottScheffler, +1-713-296-4102, or Investor Relations, Ken Matheny,+1-713-296-4114, Howard Thill, +1-713-296-4140, or Michol Ecklund,+1-713-296-3919
Web site: http://www.marathon.com/