Marathon Oil plans busy drilling year

Posted: Wednesday, February 25, 2004

Marathon Oil Company will have another busy year on the Kenai Peninsula in 2004, with directional drilling from Nin-ilchik to offshore targets in Cook Inlet, drilling in Kenai and possible exploration drilling in the East Swanson River prospect and in the Sterling area.

"We will not drill an additional well at Kasilof this year, but will focus on evaluating the results of the well we are currently finishing," said John Barnes, Alaska business unit manager.

Marathon, which currently employs 25 people in Kenai and a total of 50 in the state, also has scheduled drilling in the company's Kenai, Beaver Creek and Cannery Loop fields.

The company expects to have two drilling rigs active for a significant portion of 2004, according to Barnes.

In the Sterling area, Marathon has completed the acquisition portion of its seismic program and results now are being evaluated, possibly leading to exploration drilling in the area.

Marathon at a glance

Corporate headquarters: Houston, Texas

Alaska business unit manager: John Barnes

Contact number: (907) 564-6400

Number of Kenai Peninsula employees: 25 (50 in Alaska business unit)

2003 Cook Inlet production: 64 billion cubic feet of natural gas (gross)

Web site:

Company outlook: Marathon plans to maintain an active drilling program in 2004, drilling to offshore targets from Ninilchik and drilling at Marathon's Kenai, Beaver Creek and Cannery Loop fields.

Other work completed in 2003 by Marathon includes the Kenai-Kachemak pipeline and associated Ninilchik Field, which had its first natural gas production in September.

The pipeline has a capacity of about 120 million standard cubic feet of gas per day.

An extension of the pipeline has been proposed, reaching south to Unocal's Happy Valley discovery, Barnes said.

When Marathon announced the Ninilchik discovery, reserves were estimated at 90 billion cubic feet.

In 2003, Marathon produced almost 64 billion cubic feet of natural gas and expects to sell a similar amount in 2004. The company will meet its commitments to the liquefied natural gas plant in Kenai, according to Barnes.

Marathon provides 30 percent of the feed gas that goes to the ConocoPhillips LNG Plant. The other 70 percent comes from ConocoPhillips by way of its Tyonek Platform in Cook Inlet.

Marathon envisions continued activity on the Kenai Peninsula at a similar level to what it has had during the past several years, according to Barnes.

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