Marathon Oil working to reduce Wyoming acreage

by The Associated Press

Due to recent acquisitions, Marathon Oil Co. has more than twice the amount of leased federal drilling acreage in Wyoming allowed by law and company officials say they are working to reduce their oil and natural gas holdings.

Marathon told the Wyoming office of the U.S. Bureau of Land Management in March 2001 that it had exceeded the legal limit of 246,080 federal lease acres in the state. The company holds leases to about 680,000 acres in Wyoming.

Companies normally have six months to determine how much they have exceeded the limit and sell the excess. Marathon was granted an extension until October 2003 to research its holdings.

“Marathon has worked with the BLM in following the bureau’s general practices to address exceeding lease acreage in Wyoming since its acquisition of Pennaco,” said Christian Carrell, a spokeswoman for the Houston, Texas-based company.

Reviewing federal acreage after a merger and gaining an extension to sort out the hundreds of thousands of acres involved is common practice, she said.

Marathon bought Pennaco Energy in March 2001, gaining entry into the Powder River Basin coalbed methane play, then added to its Wyoming holdings in May 2002 when it bought CMS Energy through a three-way deal with XTO Energy.

The latter deal allowed Marathon to acquire about 280,000 acres, bumping its total acreage to about 680,000 and leaving it as the largest developer in the basin.