Marathon Oil Issues Update on First Quarter E&P Progress

Marathon Oil on Thursday released information on market factors and operating conditions that occurred during the first quarter 2006 and could impact the company's quarterly financial results.

The exploration and production market indicators and company estimates noted below may differ significantly from the actual first-quarter results, which Marathon will report on April 27.

Production sold during the first quarter is estimated to be between 365,000 and 370,000 barrels of oil equivalent per day (boepd). Revenues are reported based on production sold during the period and can vary from production available for sale primarily as a result of the timing of international crude oil liftings. Oil and natural gas production available for sale during the first quarter is expected to be approximately 415,000 boepd, exceeding the previous guidance of 395,000 to 410,000. During the first quarter of 2006, approximately half of the difference between the available for sale and production sold volumes are a result of underlifted quantities associated with Libya, with the remainder from Equatorial Guinea and the United Kingdom.

Crude oil and natural gas market price indicators have remained strong during the first quarter. For the months of January and February 2006, Marathon's worldwide crude oil realizations were slightly higher than those realized during the fourth quarter 2005. U.S. natural gas realizations for January and February 2006 were $1.25 per million cubic feet less than those realized in the fourth quarter 2005, while international natural gas realizations for these two months were relatively flat with the fourth quarter 2005. Marathon's actual crude oil and natural gas price realizations vary from market indicators primarily due to product quality and location differentials.

Estimated first quarter exploration expense is expected to remain unchanged from previous guidance of between $70 and $95 million. U.S. exploration expense is estimated to be between $35 and $50 million, while international exploration expense is estimated to be $35 to $45 million.