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 Tess.Stynes@dowjones.com
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