Marathon Oil (MRO) Sells Interest in Corrib Natural Gas Development to Vermilion Energy

June 24, 2009 9:27 AM EDT

Marathon Oil Corporation (NYSE: MRO) has entered into a definitive agreement with Vermilion Energy Trust, under which Vermilion will purchase Marathon's wholly owned subsidiary, Marathon International Petroleum Hibernia Limited, which holds Marathon's 18.5% interest in the Corrib natural gas development offshore Ireland. The companies expect to close the transaction, subject to Government and regulatory approvals, during the second half of 2009.

The final sale proceeds will range between $235 million and $400 million, subject to the timing of first commercial gas at Corrib. An initial payment of $100 million will be made at closing, with the remaining balance due at the time of first commercial gas. The Operator expects first gas to occur between late 2010 and late 2011. Pursuant to the agreement, Vermilion will assume its share of future capital expenditure obligations in order to reach first gas, which are anticipated to range up to $300 million net to the acquired interest. These capital costs are primarily for the completion of the facilities necessary to bring this gas on-stream. The transaction will have an effective date of Jan. 1, 2009.

Marathon is an integrated international energy company engaged in exploration and production.[SM]

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