Marathon sells stake in Polish shale to Nexen

By Edward Klump
Bloomberg News

Marathon Oil Corp., the U.S. oil and gas producer that plans to spin off its refining operations this year, agreed to sell Nexen Inc. a 40 percent interest in 10 concessions in Poland’s Paleozoic shale.

Marathon has an interest in 11 concessions comprising 2.3 million acres, the Houston-based company said today in a statement. The shales are at depths of 8,000 feet (2,438 meters) to 13,000 feet in the Lower Paleozoic formation. A concession is a grant from a government to allow exploration for petroleum.

The company, which will remain operator of its 11 concessions, said it may drill one to two wells in the fourth quarter of this year and as many as eight wells in 2012. Marathon is among the U.S. companies looking to natural-gas projects in Poland to help boost production in coming years.

“This partnership provides not only financial risk mitigation but combines the extensive unconventional drilling and completion experience of Marathon and Nexen to fully evaluate the potential of these concessions,” Annell Bay, a senior vice president at Marathon, said in the statement.

John Porretto, a Marathon spokesman, declined to provide financial terms of the transaction. Patti Lewis, a spokeswoman for Nexen, said the company plans to give more information on the deal in its upcoming earnings statement.