Marathon To Acquire Western Oil Sands For US$6.2 Billion

Marathon Oil Corp., Houston, (NYSE: MRO) plans to acquire Western Oil Sands Inc., Calgary, (Toronto: WTO) in a deal valued at approximately C$6.5 billion (US$6.2 billion). The upstream assets feature a 20% interest in the 300,000-gross acre Athabasca Oil-Sands project (AOSP) in Alberta, which includes the operating Muskeg River Mine and the Scotford upgrader. Net production is approximately 31,000 barrels of bitumen per day, increasing to 130,000 barrels bitumen per day by 2020. Net proved reserves are 436 million barrels bitumen and a total net resource of approximately 2.6 billion barrels of combined mined bitumen and in-situ recovery. Marathon also will take ownership in both operated and nonoperated in-situ leases. The company will gain a 60% interest and operatorship in a 26,000 gross acre project along with 20% working interest in 75,000 gross acres in the Ells River project operated by Chevron Corp., San Ramon, Calif. (NYSE: CVX). Collectively, these in-situ leases will add an estimated 600 million barrels of net resource.