Marathon Marks 50th Year in 49th State

Marathon Oil Company is celebrating 50 years in Alaska, marking five decades of energy development that began in 1954 with the signing of the company's first oil and gas lease agreement on the Kenai Peninsula.

Marathon, then the Ohio Oil Company, filed for leases in the Swanson River area in 1954, which lead to participation in the first major oil discovery in Alaska in 1957. Since the Swanson River discovery, Marathon has continued its success with major discoveries in the Cook Inlet region of Alaska, such as the Kenai, Beaver Creek, Cannery Loop gas fields, the McArthur River oil field and most recently, the Ninilchik gas field.

"We are proud to celebrate our 50th year on the last frontier," said John Barnes, Marathon Alaska production manager. "The Swanson River discovery demonstrated the economic viability of developing Alaskan energy resources and paved the way towards statehood. Natural gas introduced to Anchorage by Marathon, and other oil and gas companies, helped promote the city's development and created a foundation for expansion of the local and regional economy. Alaska is a key element of Marathon's North American operations and we look forward to continuing our mutually beneficial relationship between our company and the south central Alaska community."

Today, Marathon's Alaska operations are focused almost exclusively on natural gas. Since 1998, the company has drilled 40 gas wells in the Cook Inlet including several successful exploration wells. During 2004, 11 wells are planned in seven fields and prospects.

Marathon's key production fields are Beaver Creek, Cannery Loop, Kenai Gas, McArthur River, Wolf Lake and Ninilchik. During the first half of 2004, production from these operations averaged 168 million cubic feet per day (mmcfd) of natural gas with a peak production rate of 220 mmcfd on cold winter days. Marathon is the largest supplier of natural gas to south central Alaska utilities Enstar Natural Gas and Chugach Electric Association, and is a major supplier to industrial customers such as Kenai LNG Corporation, Agrium and the Tesoro refinery. Also, Marathon has ownership in more than 118 miles of major natural gas lines serving these Cook Inlet markets.

During the past 50 years, Marathon has made many significant achievements in Alaska including setting horizontal drilling records, developing revolutionary well completion techniques, and, along with ConocoPhillips, establishing the first and only liquefied natural gas (LNG) export facility in the United States. Throughout its time in Alaska, Marathon has been acknowledged as a leader in environmental stewardship and the company has demonstrated its position as a responsible member of the community by providing support to many charitable, educational and community programs in south central Alaska.

Timeline of Key Events

1954: Marathon, then the Ohio Oil Company, and partners file for leases in the Swanson River area

1957: Swanson River oil field discovery -- Alaska's first big oil strike

1959: Kenai gas field discovery -- the largest gas field in Cook Inlet with cumulative production to date of over 2.3 trillion cubic feet

1965: Trading Bay & McArthur River oil field discoveries -- Marathon's first offshore oil discoveries in Cook Inlet

1967: Beaver Creek gas field discovery -- located within the Kenai National Wildlife Refuge; and Dolly Varden platform installation -- part of the McArthur River field, this was the first Marathon-operated offshore platform in Cook Inlet

1969: Kenai LNG facility dedication and fist LNG cargo delivery to Japan -- the only LNG export facility in the United States, and the first source of LNG to Japanese markets

1979: Cannery Loop gas field discovery -- operated in quiet coexistence among residents near the City of Kenai

1986: Steelhead platform installation -- designed and installed by Marathon, this is the largest offshore platform in Cook Inlet

1998: Wolf Lake gas field discovery -- the first new gas discovery brought to the Cook Inlet market since 1979

2000: Glacier drilling rig commissioned -- a specially designed drilling rig for Marathon's Cook Inlet needs, designed to minimize costs and environmental impacts, the Glacier rig has drilled over 30 wells and 250,000 feet of hole

2002: Ninilchik gas field discovery -- the largest gas discovery in Cook Inlet in 20 years

2004: Marathon's 50th year on the Last Frontier