Marathon and Unocal begin gas production from Ninilchik Unit in Cook Inlet, Alaska
Natural gas flowing at 15 million cubic feet per day through new Kenai Kachemak pipeline
ANCHORAGE, ALASKA, Sept. 10, 2003 - Marathon Oil Corporation (NYSE: MRO), through its wholly owned subsidiary Marathon Oil Company, and Unocal Corporation (NYSE: UCL) today announced the startup of natural gas production from the Ninilchik Unit in Cook Inlet, Alaska.
The companies have commenced production at a current rate of 15 million cubic feet of gas per day (mmcfd). The gas is being transported through the recently completed Kenai Kachemak Pipeline (KKPL), which connects Ninilchik to the existing natural gas pipeline infrastructure serving residential, utility and industrial markets on the Kenai Peninsula, Anchorage and in other parts of south-central Alaska.
The Ninilchik discovery, announced in January 2002, is located on the Kenai Peninsula approximately 35 miles south of the City of Kenai, Alaska. Current production is coming from two wells at the Grassim Oskolkoff (GO) location. Two additional wells at a second production location are expected to come online in October. By year end, Ninilchik production is expected to approach 40 mmcfd. Marathon operates the Ninilchik Unit with a 60-percent working interest. Unocal holds the remaining 40 percent interest.
"The successful development of the Ninilchik discovery is an important element of Marathon's ongoing Cook Inlet natural gas business," said John Barnes, Marathon's Alaska Asset Team Leader. "We are also very pleased to announce the startup of the Kenai Kachemak Pipeline that will safely and efficiently transport Ninilchik gas to help meet the region's ongoing energy needs."
KKPL is a regulated 32-mile, 12-inch diameter gas transportation pipeline. Construction of the pipeline began in January 2003 following an open season in which Marathon and Unocal committed to transport gas for a 15-year period and agency approvals were provided for the construction permits. Marathon holds a 60 percent interest in Kenai Kachemak Pipeline LLC, the company formed to build and operate the pipeline. The remaining 40 percent interest is held by GUT, LLC, a Unocal subsidiary.
"The start-up of the Ninilchik Unit and the Kenai Kachemak Pipeline is a major milestone in Unocal's efforts to commercialize its South Kenai gas position," said Charles Pierce, vice president, Unocal Alaska. "We are making significant investments to grow this business to help meet the increasing need for new sources of natural gas in south-central Alaska."
About Marathon Oil Corporation
Marathon Oil Corporation is an energy company engaged in the worldwide exploration, production and transportation of crude oil and natural gas. Through its 62 percent ownership of Marathon Ashland Petroleum LLC, the company also refines, markets and transports petroleum products in the United States.
About Unocal Corporation
Unocal is one of the world's leading independent natural gas and crude oil exploration and production companies. The company's principal oil and gas operations are located in North America and in Asia.
This release contains forward-looking statements concerning the anticipated production and transportation of natural gas resources from the Ninilchik Unit. This forward-looking information may prove to be inaccurate and actual results may differ significantly from those presently anticipated. These statements are based on a number of assumptions, including, among others, available capital, presently known data concerning size and character of reservoirs, economic recoverability, future drilling success, production experience and other operating considerations, non-Marathon operated transportation systems, the impact of severe weather and other unforeseen hazards, regulatory constraints, unanticipated changes in market supply and demand, competition with similar projects, and acts of war or terrorist acts and the governmental or military response thereto. In accordance with "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, Marathon Oil Corporation has included in its Annual Report on Form 10-K for the year ended December 31, 2002, and in subsequent Forms 10-Q and 8-K, cautionary language identifying important factors, though not necessarily all such factors, that could cause future outcomes to differ materially from those set forth in the forward-looking statements.
This news release contains certain forward-looking statements about Unocal's expected production rates and future development plans. The statements are based upon Unocal's current expectations and beliefs and are subject to a number of known and unknown risks and uncertainties that could cause actual results to differ materially from those described in the forward looking statements. Actual results could differ materially as a result of factors discussed in Unocal's 2002 Annual Report on Form 10-K and subsequent reports filed with the Securities and Exchange Commission. U.S. investors are urged to consider closely the disclosure in Unocal's 2002 Annual Report on Form 10-K (SEC File No. 1-8483).
Copies of the company's SEC filings are available from the company by calling 800-252-2233 or from the SEC by calling 800-SEC-0330. The reports are also available on the Unocal web site, www.unocal.com.
Updated: September 2003