August 1, 2007

U.S. refiner acquires Canadian oil sands company

Houston, Texas – Marathon Oil Corporation, the fifth-largest refiner in the U.S., has reached an agreement to purchase Western Oil Sands, Inc., in a transaction valued at $6.5 billion.

Under the terms of the agreement, Western shareholders will receive $3.8 billion in cash and 34.3 million shares of Marathon common stock and securities, exchangeable for Marathon common stock, valued at $2.0 billion. Marathon will also assume Western’s debt at closing, which was approximately $700 million as of June 30. The transaction is expected to close early in the fourth quarter of 2007.

The acquisition includes 20 per cent interest in the Athabasca Oil Sands Project, which includes the operating Muskeg River Mine north of Fort McMurray, Alberta, and Scotford Upgrader, located near Edmonton, Alberta. The move will give Marathon an immediate net production of approximately 31,000 barrels per day (bpd) of bitumen, increasing to more than 130,000 bpd by 2020, with net proved mining reserves of 436 million barrels of bitumen.

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