Marathon Sells Russian Businesses to LUKOIL

Marathon Oil Corporation has entered into a definitive agreement with OAO LUKOIL, acting through its subsidiary OOO LUKOIL Western Siberia (LUKOIL), under which Marathon will sell its oil exploration and production businesses in the Khanty Mansiysk Region of Western Siberia to LUKOIL. Under the terms of the agreement, LUKOIL will pay approximately $787 million plus working capital and other closing adjustments. The transaction is expected to close in mid-July of this year, subject to government approvals and other closing conditions.

"Since acquiring these assets almost three years ago, Marathon has doubled oil production to more than 30,000 barrels per day, resulting in the creation of substantial value," said Clarence P. Cazalot, Jr., Marathon president and CEO. "We have elected to monetize the value of these particular assets, while continuing to evaluate other attractive opportunities in the Russian Federation."

Assuming a mid-July closing of this transaction, Marathon estimates its production available for sale during 2006 will average approximately 360,000 to 380,000 barrels of oil equivalent per day (boepd), excluding the effects of any further acquisitions or dispositions, compared to the earlier estimate of 365,000 to 395,000 boepd.

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Posted 16/05/06

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