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Pennaco Powder River CBM operator on the block
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| Pennaco CBM rig. |
(6/9/2004 - OGI: Houston) Marathon Oil reported today that it intends to
sell its Powder River Basin coalbed methane operator Pennaco Energy as part
of its asset portfolio alignment. The company said, "The business approach
demands that the company continually evaluate the value of existing
operations against the value of new or emerging opportunities. Strong
natural gas prices and recent sales transactions in the Rocky Mountains
indicate that now is the appropriate time to solicit potential offers for
these interests."
Marathon is the largest coalbed natural gas acreage holder in the Powder
River Basin with more than 650,000 net acres in northeast Wyoming and
southeast Montana. Production from these operations averaged approximately
72 net million cf/d during the first quarter of 2004. At yearend 2003,
Marathon's total resource base in the Powder River Basin exceeded 2 Tcf of
natural gas, of which 388 bcf were booked as proven reserves. Although
Marathon has a major presence in the Powder River Basin, the company's
production from these operations represents only approximately 10% of its US
natural gas production.
The marketing and potential sale of Pennaco does not include any of
Marathon's conventional oil and natural gas exploration and production
operations in Wyoming or Montana. The company said it plans to conclude the
bidding process in the third quarter of this year. If an acceptable offer
for Pennaco is received, Marathon would anticipate closing the transaction
during the fourth quarter.
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