Marathon to Provide Processing & Transportation Services to Seven Heads

Marathon International Petroleum Ireland Limited has entered into an agreement with the Seven Heads group to provide gas processing and transportation services, as well as field operating services, to the group through Marathon's existing Kinsale Head facilities in the Celtic Sea. As part of the agreement, the Seven Heads group, led by Ramco Oil & Gas Limited (operator), will share in the costs of operating the Kinsale Head facilities. The agreement is subject to the approval of Ireland's Minister of Communications, Marine and Natural Resources.

The Seven Heads field, estimated to contain proven and probable natural gas reserves of approximately 300 billion cubic feet, is located some 35 kilometers to the southwest of Marathon's Kinsale Head field and processing infrastructure in the Celtic Sea off the southern coast of Ireland. Under the terms of the agreement, Marathon will provide firm capacity to process and transport 60 million cubic feet per day (MMCFD) of Seven Heads gas, with the ability to increase that up to 100 MMCFD subject to agreement between the parties.

The agreement provides for enhanced utilization of Marathon's infrastructure, while ensuring that both the capital investment required for the Seven Heads field development and the time to first production are minimized. The development also increases Ireland's indigenous gas production capacity.

Commenting on the agreement, Fergal Murphy, President of Marathon International Petroleum Ireland Limited, said, "This agreement enhances the value and useful life of Marathon's Kinsale Head infrastructure by providing the means to bring nearby gas fields in the Celtic Sea into commercial production. It also complements Marathon's strategy to utilize existing infrastructure to build an integrated gas business in Ireland and Europe."

Marathon's Kinsale Head facilities consist of two production platforms, Alpha and Bravo, located 5 kilometers apart and approximately 50 kilometers southeast of Cork. The facilities are currently capable of processing 220 MMCFD of wet gas and this will be increased to 280 MMCFD as a consequence of the agreement with the Seven Heads group. Dry gas is transported through a 56 kilometer, 24-inch (600 mm) pipeline to a receiving and metering station at Inch, County Cork. From the Inch Terminal, the gas is transferred to the Bord Gais Eireann transportation system for distribution throughout Ireland.

The Seven Heads group is comprised of Ramco Oil & Gas Limited, a subsidiary of Ramco Energy plc, Duke Energy Services Ireland Ltd. (in the process of transferring its interest in the Seven Heads Field to Ramco Energy plc), Island Petroleum Developments Limited, Northern Exploration Limited (recently acquired by Ramco) and Sunningdale Oils (Ireland) Ltd.