Marathon to join Africa Oil at East African exploration sites

According to Africa Oil, Marathon will acquire a 50 per cent interest in Block 9, Kenya, with Africa Oil holding onto a 50 per cent stake as operator of the block. Marathon Oil will assume the right to operatorship of the block if a commercial discovery is made.

Marathon will also pick up a 15 per cent interest in Block 12A, Kenya, with Tullow Oil holding a 65 per cent stake and Africa Oil retaining a 20 per cent interest in the block.

Africa Oil president and chief executive officer Keith Hill remarked, “We look forward to working [with Marathon Oil] to expand on the success we have had in our East Africa exploration programme to date.

“The consideration to be received from Marathon Oil will allow us to both accelerate the exploration in the blocks that Marathon Oil is farming into, as well as provide additional funding to the company for the accelerated exploration programme on the Tertiary rift trend, which will be executed in partnership with Tullow Oil.”

Africa Oil and Marathon Oil have also agreed to jointly pursue exploration activities on an additional exploration area in Ethiopia. Marathon Oil will pay Africa Oil an entry payment of US$35 million and fund Africa Oil’s working interest share of future joint venture expenditures over the next three years up to a maximum of $43.5 million.

“East Africa is rapidly becoming the most prospective oil and gas province in the world and the large, strategic land portfolio we hold ensures we will be at the centre of industry activity,” Hill remarked.

In addition to its deals with Marathon, Africa Oil has also completed a farmout transaction with Tullow, which saw Tullow pay Africa Oil $759,000 to acquire an additional 15 per cent interest in Block 12A, Kenya.

According to Africa Oil, Tullow will fund Africa Oil’s working interest share of costs related to the acquisition of 520km of 2D seismic until an expenditure cap of $3.1 million net has been met.