Incremental European LNG Exposure to Drive
Significant E.G. Financial Uplift Starting Jan 2024
HOUSTON, Oct.
16, 2023 /PRNewswire/ -- Marathon Oil Corporation
(NYSE: MRO) announced that through its wholly-owned
subsidiaries it has entered into a five-year firm LNG sales
agreement with Glencore Energy UK Ltd, a subsidiary of Glencore PLC
(LSE: GLEN), for a portion of its equity natural gas produced from
the Alba Field (Alba Unit, MRO 64% working interest) in
Equatorial Guinea (E.G.),
effective Jan. 1, 2024. The pricing
structure for the LNG sales agreement is linked to the Dutch Title
Transfer Facility (TTF) index, less a fixed transportation fee,
providing Marathon Oil with significant incremental exposure to the
European LNG market.
Separately, due to the expected arbitrage between LNG and
methanol pricing, Marathon Oil announced it expects to optimize its
E.G. integrated gas operations in 2024 by redirecting a portion of
Alba Unit natural gas from the local methanol facility (MRO 45%
working interest) to the LNG facility (MRO 56% working
interest).
"I'm excited to announce this new sales agreement linked to the
European LNG market, signaling the conclusion of the legacy Henry
Hub linked contract," said chairman, president, and CEO
Lee Tillman. "The timing of this new
sales agreement, EG LNG's track record of reliable operations,
and the plant's proximity to Europe resulted in tremendous demand and an
extremely competitive process. At recent forward curve pricing, we
expect to realize an approximate year-on-year EBITDA increase of
over $300 million next year across
our E.G. integrated gas business, reflecting our differentiated and
increasing exposure to the global LNG market. This success
positions us strongly for the next phase of opportunities to
advance the E.G. Gas Mega Hub, including up to two infill
development wells in the Alba Unit and the potential tie-in of the
third-party Aseng gas cap monetization."
Alex Sanna, Head of Oil and Gas
Marketing, Glencore PLC, said: "We are delighted to further expand
our cooperation with Marathon Oil. This deal reconfirms our
commitment to the growth and diversification of our LNG portfolio
as we continue to support producers and end users as a reliable and
responsible off-taker and supplier."
About Marathon Oil
Marathon Oil (NYSE: MRO) is an
independent oil and gas exploration and production (E&P)
company focused on four of the most competitive resource plays in
the U.S. - Eagle Ford, Texas;
Bakken, North Dakota; STACK and
SCOOP in Oklahoma and Permian in
New Mexico and Texas, complemented by a world-class
integrated gas business in Equatorial
Guinea. The Company's Framework for Success is founded in a
strong balance sheet, ESG excellence and the competitive advantages
of a high-quality multi-basin portfolio. For more information,
please visit www.marathonoil.com.
About Glencore
Glencore is one of the
world's largest global diversified natural resource companies and a
major producer and marketer of more than 60 commodities that
advance everyday life. Through a network of assets, customers and
suppliers that spans the globe, we produce, process, recycle,
source, market and distribute the commodities that support
decarbonisation while meeting the energy needs of today.
With around 140,000 employees and contractors and a strong
footprint in over 35 countries in both established and emerging
regions for natural resources, our marketing and industrial
activities are supported by a global network of more than 40
offices.
Glencore's customers are industrial consumers, such as those in
the automotive, steel, power generation, battery manufacturing and
oil sectors. We also provide financing, logistics and other
services to producers and consumers of commodities.
www.glencore.com
Forward-looking Statements
This release
contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. All statements, other than statements of
historical fact, including without limitation statements regarding:
future optimization of E.G. integrated gas operations;
expected EBITDA uplift across our E.G. integrated gas business;
future exposure to the global LNG market; advancement of the
Gas Mega Hub, including future development activity in the Alba
Unit and potential future tie-in of the third party Aseng gas cap
blowdown, and other statements regarding management's plans and
objectives for future operations, are forward-looking statements.
Words such as "anticipate," "believe," "continue," "could,"
"estimate," "expect," "forecast," "future," "guidance," "intend,"
"may," "outlook," "plan," "positioned," "project," "seek,"
"should," "target," "will," "would," or similar words may be used
to identify forward-looking statements; however, the absence of
these words does not mean that the statements are not
forward-looking. While Marathon Oil believes its assumptions
concerning future events are reasonable, a number of factors could
cause actual results to differ materially from those projected,
including, but not limited to: conditions in the oil and gas
industry, including supply/demand levels for crude oil and
condensate, NGLs and natural gas and the resulting impact on price;
changes in expected reserve or production levels; changes in
political or economic conditions in the U.S. and Equatorial Guinea, including changes in
foreign currency exchange rates, interest rates, inflation rates
and global and domestic market conditions; actions taken by the
members of the Organization of the Petroleum Exporting Countries
(OPEC) and Russia affecting the
production and pricing of crude oil and other global and domestic
political, economic or diplomatic developments; capital available
for exploration and development; risks related to Marathon Oil's
hedging activities; voluntary or involuntary curtailments, delays
or cancellations of certain drilling activities; well production
timing; liabilities or corrective actions resulting from
litigation, other proceedings and investigations or alleged violations of law or permits; drilling and
operating risks; lack of, or disruption in, access to storage
capacity, pipelines or other transportation methods; availability
of drilling rigs, materials and labor, including the costs
associated therewith; difficulty in obtaining necessary approvals
and permits; the availability, cost, terms and timing of issuance
or execution of, competition for, and challenges to, mineral
licenses and leases and governmental and other permits and
rights-of-way, and our ability to retain mineral licenses and
leases; non-performance by third parties of contractual or legal
obligations, including due to bankruptcy; administrative
impediments or unexpected events that may impact dividends or other
distributions, or the timing thereof, from our equity
method investees; changes in our credit ratings; hazards such
as weather conditions, a health pandemic (including COVID-19), acts
of war or terrorist acts and the government or military response
thereto; the impacts of supply chain disruptions that began during
the COVID-19 pandemic and the resulting inflationary environment;
security threats, including cybersecurity threats and disruptions
to our business and operations from breaches of our information
technology systems, or breaches of the information technology
systems, facilities and infrastructure of third parties with which
we transact business; changes in safety, health, environmental, tax
and other regulations, requirements or initiatives, including
initiatives addressing the impact of global climate change, air
emissions, or water management; our ability to achieve, reach or
otherwise meet initiatives, plans, or ambitions with respect to ESG
matters; our ability to pay dividends and make share repurchases;
our ability to secure increased exposure to the global LNG market;
impacts of the Inflation Reduction Act of 2022 and our assumptions
relating thereto; the risk that the Ensign assets do not perform
consistent with our expectations, including with respect to future
production or drilling inventory; other geological, operating and
economic considerations; and the risk factors, forward-looking
statements and challenges and uncertainties described in Marathon
Oil's 2022 Annual Report on Form 10-K, Quarterly Reports on Form
10-Q and other public filings and press releases, available at
https://ir.marathonoil.com/. Except as required by law, Marathon
Oil undertakes no obligation to revise or update any
forward-looking statements as a result of new information, future
events or otherwise.
Media Relations Contact:
Karina Brooks: 713-296-2191
Investor Relations Contacts:
Guy Baber: 713-296-1892
John Reid: 713-296-4380
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SOURCE Marathon Oil Corporation