Marathon to divest non-core Marcellus acreage, where the metrics run at $7,000 per acre

Scotia Waterous (USA) Inc has been retained as exclusive financial advisor by Marathon Oil Corporation for sale of the company’s non-core Marcellus Shale assets in West Virginia and Pennsylvania. The offering has been organized into two packages: the operated leasehold and the non-operated leasehold. The total acreage for the offering is 81,397 gross (51,679 net) acres.


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Investment Highlights:
-- Operated leasehold: This package is comprised of 21,961 gross (net) acres with 100% WI in West Virginia, primarily in Randolph, Preston and Tucker Counties.
-- Non-operated leasehold: This package is comprised of 59,436 gross (29,718 net) acres with 50% WI in West Virginia and Pennsylvania. The acreage is operated by Triana Energy LLC, a Morgan Stanley backed private company, and is located primarily in Fayette County, Pennsylvania and Preston and Randolph Counties, West Virginia.
-- Joint Venture with Triana in which the leasehold is included within an Area of Mutual Interest to be developed by Triana on behalf of both parties. Triana has committed to $45 million drilling carry to earn 50% of AMI leasehold. Minimum drilling commitment in 2011 to drill 4 wells.
-- Encouraging results from Marathon’s drilling activity provides valuable technical data to partnership. Nine wells drilled to date with a focus on data collection and delineation of acreage. Seven operated, frac’d vertical wells with core and fluid efficiency test data. Two OBO horizontal wells providing production data and conventional core data.
-- Additional assets enhance ability of buyer to develop the asset base. Full compliment of regional geological and engineering analysis used to define the play. 100 square miles of 3D seismic currently being acquired over core leasehold. Company owned, buried 3D micro seismic array for stimulation monitoring. Two taps on major interstate pipelines.


Metrics for recent deals in Marcellus

Year	Heading	Deal Value ($MM)	$/Acre
2010	Epsilon Energy and Chesapeake form Marcellus JV	100	17,391
2010	Atlas Energy  and Reliance to form Marcellus JV	1,699	14,158
2010	Anadarko and Mitsui form Marcellus JV	1,400	14,000
2010	Williams acquires Marcellus acreage from Alta Resources	501	11,928
2010	BG and  EXCO form Marcellus JV	950	10,215
2010	EXCO and BG acquire Marcellus assets from Chief Oil & Gas	459.4	9,188
2010	Rex Energy and Sumitomo form Marcellus JV	140.4	8,595
2010	Shell acquires Marcellus acreage from East Resources	4,700	7,230
2010	Reliance enters into Marcellus JV with Carrizo	392	6,257
2010	EQT Corp acquires additional Marcellus acreage	280	4,827
2010	Trans Energy and Republic Energy form Marcellus JV	18	4,736
2010	Magnum Hunter acquires additional Marcellus assets	39.75	4,594
2010	Atlas Energy and Reliance jointly acquire Marcellus assets	191.9	4,531
2010	Antero Resources acquires Bluestone Energy Partners	180	4,500
2010	Statoil acquires Chesapeake’s additional Marcellus acreage	253	4,325
2010	Gastar and Atinum Partners form Marcellus JV	70	4,093
2010	Williams acquires additional acreage in Marcellus Shale	31	3,875
2010	EXCO Resources acquires additional Marcellus properties	95	3,392

Source: Derrick E&P Transactions Database

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