Marathon Announces First Oil from Deepwater Droshky Development in Gulf of Mexico

Marathon Oil Corporation announced that its Droshky development in the deepwater Gulf of Mexico has begun production on time and under budget. This marks the first new deepwater production since the Obama Administration halted drilling after the Deepwater Horizon accident. The new well had already been drilled at the time of the incident.

Marathon owns a 100% working interest in Droshky, which is expected to produce approximately 50,000 net barrels of oil equivalent per day at its peak, consisting of approximately 45,000 barrels per day of liquid hydrocarbons and 30 million cubic feet per day of natural gas.

Located in approximately 3,000 feet (914 meters) of water in Green Canyon Block 244, about 160 miles (258 kilometers) southwest of New Orleans, Droshky is a major subsea project consisting of four development wells tied back to the third-party Bullwinkle platform with dual, 18-mile flowlines.

At a final development cost of less than $900 million, the initial stage of development is expected to produce 35 million of the estimated 60 million barrels of oil equivalent (boe) net resource. Future expansion of the project and ultimate total recovery will largely depend upon well performance. At year-end 2009, Droshky had booked proved reserves of approximately 26 million boe.

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