Marathon Acquires Globex Energy
Marathon Oil Corporation has signed a definitive agreement to acquire Houston-based Globex Energy, Inc. in a transaction valued at $155 million. The acquisition will strengthen Marathon's exploration and production asset base, primarily in Equatorial Guinea, with the addition of 38 million barrels of oil equivalent (BOE) in proven reserves. These new assets will complement Marathon's integrated gas strategy, which is designed to create sustainable value growth through the integrated development of natural gas resources. The acquisition is subject to the approval of the Australian Foreign Investment Review Board and closing of the sale, which are expected before the end of June.
- 38 million BOE of proven reserves, 35 million of which are located offshore Equatorial Guinea in the Alba Field, with the remaining in the Stag Field on the Northwest Shelf offshore Australia. (Note: An additional 12 million BOE of proven Equatorial Guinea reserves will be booked upon approval of an Equatorial Guinea expansion project.)
- An additional 10.9 percent interest in Alba Production Sharing Contract, bringing Marathon's total interest in the Alba field to 63.3 percent
- A 12.5-percent interest in the Stag Field
- Current net daily production of 6,200 BOE, 4,000 of which is from the Alba Field, and 2,200 from the Stag Field
- An additional nine percent interest in the Bioko Island, Equatorial Guinea, liquefied petroleum gas (LPG) processing facility, raising Marathon's interest in this LPG plant to 52.2 percent
- A 9.4-percent interest in exploration Block D offshore Equatorial Guinea raising Marathon's interest in Block D to 47 percent
- A 19-percent interest in one exploration block and a 15-percent interest in two additional exploration blocks in the Carnarvon Basin on the Northwest Shelf of Australia
Commenting on the acquisition, Marathon President and CEO, Clarence P. Cazalot, Jr., said, "This acquisition provides an excellent strategic fit to Marathon's existing world-class exploration and production portfolio in Equatorial Guinea where we established a new core area earlier this year. These high quality assets will enhance the value of our Equatorial Guinea interests by providing expanded opportunities to commercialize the significant natural gas resources of the region as part of Marathon's integrated gas strategy."
Following the expected approval of an Equatorial Guinea expansion project later this year, Marathon's Equatorial Guinea net proven reserves will total 300 million BOE.
The Alba field, which began producing in 1991, is estimated to contain producible resources of 5 trillion cubic feet of dry gas and 300 million barrels of condensate. Currently, 250 million cubic feet per day (MMCFD) gross of wet gas is produced, from which approximately 17,000 barrels per day (BPD) gross of condensate and 2,400 BPD gross of LPG are recovered through the Bioko Island LPG facility. Approximately 120 MMCFD of the remaining lean gas is then fed to a methanol plant in which Marathon owns a 45-percent interest. This facility produces an average of 2,500 metric tons of methanol per day. With the acquisition of the Globex assets, Marathon's net share of Equatorial Guinea production is expected to average 21,000 BOE per day in 2002.
The Alba PSC Partners have submitted a plan of development to the Government of Equatorial Guinea to increase gross production capacity to approximately 800 MMCFD and approval is anticipated in the third quarter of 2002. This is expected to result in Marathon's net production increasing to 40,000 to 45,000 BOE per day by 2004. Additionally, it is anticipated that a companion plan of development will be submitted to the Government of Equatorial Guinea to expand the condensate recovery and LPG facilities to significantly increase liquids processing capabilities.