Marathon to bring new Alaska gas production online in 2006

Anchorage (Platts)--13Jul2006

Marathon Oil plans to bring three new southern Alaska natural gas
projects into production this year, a company said Thursday.

Total new production is expected to range between 20,000-30,000 Mcf/d
from five new wells, Marathon's Alaska manager John Barnes told Platts.

Some of the new production will be shared with Chevron, Marathon's
partner in one of the projects, Barnes said. The new production could increase
Marathon's net Alaska production by about 12%, since some of the gain will be
offset by declines in existing producing assets, Barnes said.

Marathon produced 67 Bcf in Alaska in 2005, an average of 183,600 Mcf/d.

New wells drilled in the Ninilchik gas field on the Kenai Peninsula, 60%
owned by Marathon and 40% owned by Chevron, would contribute to new
production. Production will begin in November from two new production pads
with two wells. The second well is now being completed.

Additional production is to come from Marathon's 100%-owned Kasilof gas
field, a new project that would begin production in the fourth quarter of the
year. Construction is nearing completion on a 4-mile, 8-inch pipeline that
is to connect the Kasilof gas field with the 12-inch Kenai-Kachemak pipeline
owned by Marathon and Unocal.

The small Kasilof field is an offshore deposit drilled with an
extended-reach well from onshore. Production will initially be through one
well, Barnes said. Marathon will assess reservoir performance before deciding
on any additional drilling, he said.

New production would also come from an old well pad redeveloped in the
Marathon-owned Cannery Loop gas field, Barnes said.

A new well was drilled earlier this year and a second well is planned
later this year, he said. First production is expected in September, he said.

Cannery Loop is a small gas field developed by Unocal, now Chevron, and
sold to Marathon in the mid-1990s as part of a larger exchange of Alaska
assets between the companies. Marathon began redevelopment the field in 2001.

--Tim Bradner, newsdesk@platts.com

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