"Marathon's reserve replacement performance was one of the company's key achievements during 2002 and reflects our commitment to create a foundation that will fuel continued value growth," said Clarence P. Cazalot, Jr., Marathon president and CEO. "This milestone puts us on track to increase our proved reserve base to approximately 1.4 billion boe by the end of 2004 at competitive finding and development costs." The projected increase excludes any future acquisitions or dispositions.
Excluding sales and acquisitions, Marathon added approximately 183 million boe of proved reserves for a replacement ratio of 123 percent of 2002 production at an average cost of $4.75 per boe. Acquisitions added another 207 million boe at an average cost of $4.49 per boe. Net sales of reserves in place amounted to approximately 4 million boe.
Of the total 183 million boe of proved reserve additions, excluding sales and acquisitions, approximately 58 million were in the United States and 125 million were international. The U.S. additions were primarily in the Powder River Basin, Rocky Mountain area and Alaska. During 2002, Marathon expanded its coalbed natural gas interests through a property exchange, resulting in the addition of some 110 billion cubic feet (bcf) of Powder River Basin proved natural gas reserves. This brings Marathon's total proved reserves in the Powder River Basin to 417 bcf, or approximately 70 million boe.
Internationally, approximately 103 million boe of proved reserves were added through the Equatorial Guinea phase 2A and 2B expansion projects, which received government approval during 2002. The phase 2A expansion will increase condensate production, while the Alba field phase 2B expansion will increase liquefied petroleum gas (LPG) and condensate production. With the approval of the these two expansion projects, Marathon's current net proved reserves in Equatorial Guinea total approximately 300 million boe.
(millions of barrels of oil equivalent)
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