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By Saabira Chaudhuri

Marathon Oil Corp. (MRO) has sold part of its stake in two blocks in the Kurdistan region of Iraq to Total S.A. (TOT, FP.FR) as the two companies look to better evaluate the region's potential.

Total's subsidiaries have acquired 35% working interest in the two blocks, from Marathon subsidiary Marathon Oil KDV B.V. for an undisclosed amount.

"This partnership combines the extensive exploration, drilling and completion experience of Marathon Oil and Total to fully evaluate the potential of these two blocks," Marathon Oil Global Exploration Vice President Annell R. Bay said.

Marathon spun off its refining business last year to focus its drilling efforts on unconventional U.S. oil shales, which also include the Bakken Field in North Dakota and Anadarko Woodford in Oklahoma.

Marathon has inked a series of deals of late as the energy company looks to expand its operations. Last week, it signed an agreement with Africa Oil Corp. (AOIFF, AOI.V) to jointly develop two onshore exploration areas in northwest Kenya, underscoring East Africa's increasing attractiveness for oil prospectors. And in May, the company agreed to acquire Paloma Partners II LLC for around $750 million in cash, a move that helps expand operations in the oil-rich Eagle Ford shale in Texas.

On Tuesday, Marathon revealed that it now has a reduced working stake in the Harir and Safen blocks of 45%, while remaining operator of the Harir block and exploration operator of the Safen block. A subsidiary of Total will become the operator of any development of the Safen block. The Kurdistan Regional Government continues to have a fully carried 20% interest in each of the blocks.

The Harir block is about 705-square kilometers and the Safen block is about 424-square kilometers. Both blocks are located northeast of Erbil.

Marathon also said a 2-D seismic program on both blocks is ongoing and expected to be completed by the end of the third quarter of this year. The first exploration well on the Harir block began drilling Monday and will be exploring Mesozoic fractured carbonates with main reservoir objectives in the Cretaceous, Jurassic and Triassic formations. The first exploration well on the Safen block is planned for the first half of 2013.

In May, Marathon reported its first-quarter earnings fell from a year-ago quarter that included contributions from its former refining business.

Shares of Marathon closed at $26.90 Monday and were inactive premarket. The stock is down 13% in the past 12 months.

Write to Saabira Chaudhuri at saabira.chaudhuri@dowjones.com

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