Following the lead of other producers verifying proved reserves and replaced production, Marathon Oil Co. said Wednesday it replaced 124% of its oil and gas production last year, excluding dispositions, at a finding and development cost of $8.78/boe.

Reserve additions, excluding acquisitions and dispositions, totaled 106 MMboe, resulting in a reserve replacement ratio of 76%. Of the reserve additions, approximately 62 MMboe were international, equivalent to 113% of 2003 international production, and 44 MMboe were added in the United States, equivalent to 52% of 2003 U.S. production.

At year-end, Marathon had estimated proved reserves of 1,042 MMboe. During 2003, Marathon sold 274 MMboe of proved reserves as part of the company’s plan to sell non-core assets and added 67 MMboe of proved reserves with an acquisition in Russia.

The Houston-based producer said that in 2003, approximately 35% of its total proved reserves were “prepared, reviewed or validated by third-party petroleum engineering consultants and the results were consistent with Marathon’s proved reserves.” Of the approximate 300 MMboe of proved undeveloped reserves at year-end 2003, only 10% were included as proved reserves for more than two years, the company noted.

This year, Marathon expects to replace approximately 180% of production at a finding and development cost of under $5/boe, which would result in a projected three-year average of approximately 190% at a cost of less than $6.00/boe.

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