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Marathon Oil Corp. announced that its subsidiary Marathon Ethiopia Ltd. B.V. has entered into a sale and purchase agreement with Agriterra Ltd. to acquire their 20% working interest in the South Omo concession in Ethiopia with an effective date of Aug. 17, 2012. The companies expect to close the transaction, subject to completion of the necessary Ethiopian government approvals, before the end of the year.
Tullow Oil is the operator of the South Omo concession with a 50% working interest, and Africa Oil holds the remaining 30% working interest. The concession has an area of approximately 7.2 million gross acres (29,465 gross sq km). An exploration well is anticipated to spud in South Omo in the fourth quarter of 2012.
In consideration for the assignment of these interests, Marathon Oil will pay Agriterra $40 million, before closing adjustments, with an additional payment of $10 million due upon Marathon Oil's participation in a declaration of a commercial discovery.