Marathon Oil (MRO)

7. Dispositions

Outside-operated Norwegian properties – On October 31, 2008, we closed the sale of our Norwegian outside-operated properties and undeveloped offshore acreage in the Heimdal area of the Norwegian North Sea for net proceeds of $301 million, with a pretax gain of $254 million as of December 31, 2008.

Pilot Travel Centers – On October 8, 2008, we completed the sale of our 50 percent ownership interest in PTC. Sale proceeds were $625 million, with a pretax gain on the sale of $126 million. Immediately preceding the sale, we received a $75 million partial redemption of our ownership interest from PTC that was accounted for as a return of investment.

Operated Irish properties – On December 17, 2008, we agreed to sell our operated properties located in Ireland for proceeds of $180 million, before post-closing adjustments and cash on hand at closing. Closing is subject to completion of the necessary administrative processes.

As of December 31, 2008, operating assets and liabilities were classified as held for sale, as disclosed by major class in the following table:

8. Discontinued Operations

On June 2, 2006, we sold our Russian oil exploration and production businesses in the Khanty-Mansiysk region of western Siberia. Under the terms of the agreement, we received $787 million for these businesses, plus preliminary working capital and other closing adjustments of $56 million, for a total transaction value of $843 million. Proceeds net of transaction costs and cash held by the Russian businesses at the transaction date totaled $832 million. A gain on the sale of $243 million ($342 million before income taxes) was reported in discontinued operations for 2006. Income taxes on this gain were reduced by the utilization of a capital loss carryforward. Exploration and Production segment goodwill of $21 million was allocated to the Russian assets and reduced the reported gain. Adjustments to the sales price were completed in 2007 and an additional gain on the sale of $8 million ($13 million before income taxes) was recognized.

The activities of the Russian businesses have been reported as discontinued operations in the consolidated statements of income and the consolidated statements of cash flows for 2006. Revenues applicable to discontinued operations were $173 million and pretax income from discontinued operations was $45 million for 2006.

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Table of Contents

Index to Financial Statements

MARATHON OIL CORPORATION

Notes to Consolidated Financial Statements

7. Dispositions

Outside-operated Norwegian properties – On October 31, 2008, we closed the sale of our Norwegian outside-operated properties and undeveloped offshore acreage in the Heimdal area of the Norwegian North Sea for net proceeds of $301 million, with a pretax gain of $254 million as of December 31, 2008.

Pilot Travel Centers – On October 8, 2008, we completed the sale of our 50 percent ownership interest in PTC. Sale proceeds were $625 million, with a pretax gain on the sale of $126 million. Immediately preceding the sale, we received a $75 million partial redemption of our ownership interest from PTC that was accounted for as a return of investment.

Operated Irish properties – On December 17, 2008, we agreed to sell our operated properties located in Ireland for proceeds of $180 million, before post-closing adjustments and cash on hand at closing. Closing is subject to completion of the necessary administrative processes.

As of December 31, 2008, operating assets and liabilities were classified as held for sale, as disclosed by major class in the following table:

8. Discontinued Operations

On June 2, 2006, we sold our Russian oil exploration and production businesses in the Khanty-Mansiysk region of western Siberia. Under the terms of the agreement, we received $787 million for these businesses, plus preliminary working capital and other closing adjustments of $56 million, for a total transaction value of $843 million. Proceeds net of transaction costs and cash held by the Russian businesses at the transaction date totaled $832 million. A gain on the sale of $243 million ($342 million before income taxes) was reported in discontinued operations for 2006. Income taxes on this gain were reduced by the utilization of a capital loss carryforward. Exploration and Production segment goodwill of $21 million was allocated to the Russian assets and reduced the reported gain. Adjustments to the sales price were completed in 2007 and an additional gain on the sale of $8 million ($13 million before income taxes) was recognized.

The activities of the Russian businesses have been reported as discontinued operations in the consolidated statements of income and the consolidated statements of cash flows for 2006. Revenues applicable to discontinued operations were $173 million and pretax income from discontinued operations was $45 million for 2006.

90

Table of Contents

Index to Financial Statements

MARATHON OIL CORPORATION

Notes to Consolidated Financial Statements

7. Dispositions

SIZE="2">Outside-operated Norwegian properties – On October 31, 2008, we closed the sale of our Norwegian outside-operated properties and undeveloped offshore acreage in the Heimdal area of the Norwegian North Sea for net
proceeds of $301 million, with a pretax gain of $254 million as of December 31, 2008.

Pilot Travel Centers – On
October 8, 2008, we completed the sale of our 50 percent ownership interest in PTC. Sale proceeds were $625 million, with a pretax gain on the sale of $126 million. Immediately preceding the sale, we received a $75 million partial redemption of
our ownership interest from PTC that was accounted for as a return of investment.

Operated Irish properties – On
December 17, 2008, we agreed to sell our operated properties located in Ireland for proceeds of $180 million, before post-closing adjustments and cash on hand at closing. Closing is subject to completion of the necessary administrative
processes.

As of December 31, 2008, operating assets and liabilities were classified as held for sale, as disclosed by major class in
the following table:

8. Discontinued Operations

FACE="Times New Roman" SIZE="2">On June 2, 2006, we sold our Russian oil exploration and production businesses in the Khanty-Mansiysk region of western Siberia. Under the terms of the agreement, we received $787 million for these businesses,
plus preliminary working capital and other closing adjustments of $56 million, for a total transaction value of $843 million. Proceeds net of transaction costs and cash held by the Russian businesses at the transaction date totaled $832 million. A
gain on the sale of $243 million ($342 million before income taxes) was reported in discontinued operations for 2006. Income taxes on this gain were reduced by the utilization of a capital loss carryforward. Exploration and Production segment
goodwill of $21 million was allocated to the Russian assets and reduced the reported gain. Adjustments to the sales price were completed in 2007 and an additional gain on the sale of $8 million ($13 million before income taxes) was recognized.

The activities of the Russian businesses have been reported as discontinued operations in the consolidated statements of income and the
consolidated statements of cash flows for 2006. Revenues applicable to discontinued operations were $173 million and pretax income from discontinued operations was $45 million for 2006.

SIZE="1"> 

90

Table of Contents

Index to Financial Statements

MARATHON OIL CORPORATION

ALIGN="center">Notes to Consolidated Financial Statements