Marathon Agrees To Jointly Explore Kenya Areas With Africa Oil

   By Tess Stynes 
 

Marathon Oil Corp. (MRO) signed an agreement with Africa Oil Corp. (AOIFF, AOI.V) to jointly develop two onshore exploration areas in northwest Kenya, a deal that gives the U.S. exploration and production company entry into a position that fits in with its focus on liquids-rich plays.

Marathon and Africa Oil--a Canadian company with assets in Kenya, Ethiopia, Mali and Somalia--also agreed to jointly explore an additional area in Ethiopia.

Marathon agreed to an entry payment of $35 million, which includes prior expenditures, and also agreed to fund Africa Oil's share of joint venture expenditures--estimated at up to $43.5 million--over the next three years.

The deal includes a 50% working interest in the Block 9 area, in which Africa Oil will be the operator in the exploration phase. The agreement also includes a 15% interest in Block 12A, where Tullow Oil PLC (TWL.LN, TUWOY)--which has a 65% interest--is the operator. Africa Oil has a 20% interest.

Marathon Oil in May reported that first-quarter earnings fell 58% from a year-earlier period that included contributions from its former refining and marketing business, missing analysts' expectations. The company expects to report its second-quarter financial results Aug. 1.

Shares closed Friday at $26.54 and were inactive premarket. The stock is down 9.3% this year.

Write to Tess Stynes at [e-mail]

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