"Marathon is very pleased with this opportunity to return to Russia where the company played a pioneering role in developing the oil and gas fields offshore Sakhalin Island," said Clarence P. Cazalot, Jr., Marathon president and CEO. "This acquisition forms the basis for a new core area with substantial near and medium term growth, and is consistent with our strategy of upgrading Marathon's upstream portfolio to achieve superior long-term value growth."
Current net production is approximately 14,500 barrels of oil per day with production from known hydrocarbon accumulations expected to grow to more than 60,000 net barrels of oil per day within five years. Marathon expects to book approximately 85 million barrels of proved reserves in 2003, with planned capital spending of approximately $35 million for the remainder of 2003.
Based on the purchase price and expected development of 250 million barrels of proved and probable reserves in the currently producing fields, full cycle finding and development costs are anticipated to be under $3.00 per barrel.
The licenses acquired in the transaction hold total potential resources in excess of 900 million barrels of oil and further development of the non-producing discovered fields is anticipated.
Marathon's intention to acquire KMOC was announced on April 22nd. With the merger, a wholly owned Marathon subsidiary was merged with and into KMOC, with KMOC continuing as the surviving corporation and a wholly owned subsidiary of Marathon.
Most Popular Articles