Marathon Oil Corp. reported that it replaced 262% of its worldwide crude oil and natural gas production during 2002, excluding net sales of reserves in place. Total reserves increased 237 million boe, or 23% at year-end 2002, to 1,283 million boe.

“Marathon’s reserve replacement performance was one of the company’s key achievements during 2002 and reflects our commitment to create a foundation that will fuel continued value growth,” said Clarence P. Cazalot, Jr., Marathon CEO. “This milestone puts us on track to increase our proved reserve base to approximately 1.4 billion boe by the end of 2004 at competitive finding and development costs.”

The company said that total 2002 reserves were added at a competitive cost of $4.61/boe through acquisitions, discoveries, extensions, revisions and improved recovery. Excluding sales and acquisitions, Marathon added 183 million boe of proved reserves for a replacement ratio of 123% of 2002 production at an average cost of $4.75 per boe. Acquisitions added another 207 million boe at an average cost of $4.49 per boe. Net sales of reserves in place amounted to 4 million boe.

Of the total 183 million boe of proved reserve additions, 58 million were in the United States and 125 million were international, the company said. U.S. additions were primarily in the Powder River Basin, Rocky Mountain area and Alaska. Marathon said it expanded its coalbed natural gas interests in 2002 through a property exchange, resulting in the addition of some 110 Bcf of Powder River Basin proved natural gas reserves. This brings Marathon’s total proved reserves in the Powder River Basin to 417 Bcf, or 70 million boe.

On the international front, the Houston-based company said that 103 million boe of proved reserves were added through the Equatorial Guinea phase 2A and 2B expansion projects, which received government approval during 2002. The phase 2A expansion will increase condensate production, while the Alba field phase 2B expansion will increase liquefied petroleum gas (LPG) and condensate production. Counting these projects, Marathon said its current net proved reserves in Equatorial Guinea total 300 million boe.

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