April 29, 2002; Marathon Encounters a Surprise Offshore Nova Scotia

Drilling a deep exploratory well in the Atlantic Ocean, Marathon encountered a natural gas zone above the target structure.  Reported in a press release on April 8 as a “well control event”, a surprise influx of methane apparently caused drilling to be suspended.  Rather than undertake an expensive remedial operation, Marathon started a new well adjacent to the old one.   Operated by MRO with 30%, the well is shared with Encana (26%), Norsk Hydro (25%) and Murphy (19%).  Optimists would like to think that the natural gas in the surprise zone stems from a source that has filled the deeper structure.  Realists know the odds favor a dry hole.  Marathon stock has no expectation built into it for exploration success, in our opinion.  

Marathon was a surprise participant in a conference for independent producers.  The venue appropriately connotes the company’s new status unaffiliated with the steel company that acquired the predecessor MRO in 1980.