October 31, 2008

Marathon Oil Board Approves Two Gulf of Mexico Development Projects

Marathon Oil has announced that its board of directors has approved two Gulf of Mexico developments, the Droshky and Ozona projects. 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 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 the Green Canyon Block 244, about 140 miles south-southwest of Venice, Los Angeles, 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 Ozona discovery is located in approximately 3,000 feet of water on the 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 6,000bpd of oil and 13mmcf/d of natural gas, after royalties. Marathon holds a 68% working interest in Ozona, while Japanese trading house Marubeni holds a 32% working interest.