Unconventional resource plays

  

Unconventional oil and natural gas resources with outstanding potential are a strategic growth area for Marathon. Since acquiring its first shale assets onshore the U.S. in 2006, the Company has developed specific competencies to address environmental, infrastructure, regulatory, geologic, drilling and completion challenges in shale plays. Its portfolio of U.S. unconventional holdings represents a total of 700 million barrels of oil equivalent (mmboe) net mean resource potential.

The North Dakota Bakken Shale oil play is Marathon's centerpiece unconventional resource and will be a top priority for its North America capital investment program in coming years. Within three years of entering the area, Marathon significantly increased and consolidated its initial position to approximately 336,000 net acres in high value areas.

The Company has set itself apart in the Bakken by cutting drilling time in half and implementing proactive environmental practices in sensitive areas located on federal and tribal lands. Net Bakken production has exceeded expectations and was 9.6 mboepd in 2009, up from 5.8 mboepd in 2008.

The Company is building a new core area in the Marcellus Shale in Pennsylvania and West Virginia. In the Oklahoma Woodford and Texas/Louisiana Haynesville areas, the resource plays have grown up under Marathon's existing conventional acreage positions. Marathon drilled its first shale gas wells in the Marcellus and Haynesville areas in 2009, and will expand drilling operations over the next several years.

Marathon is ready to transfer its expertise and repeat these shale oil and gas successes outside of the U.S. The Company was an early entrant in promising potential shale gas plays in Poland, where attractive commercial opportunities exist. In 2009 and January 2010, the Company was awarded a 100 percent working interest and operatorship in three concessions totaling 814,000 acres. The Lower Paleozoic shale gas objective is similar to many North American plays.