Marathon Oil Corp. has agreed to acquire 70,000 net surface acres in the Permian basin from BC Operating Inc., Midland, Tex., and other entities for $1.1 billion in cash.
The deal, effective Jan. 1 and expected to close in the second quarter, includes 51,500 acres in the northern Delaware basin of New Mexico and current production of 5,000 net boe/d.
Marathon will receive as many as 10 target benches within 5,000 ft of stacked pay and 900 million boe of total resource potential with 1,700 total upside locations from both tighter density and secondary targets.
Primary targets on the acreage are in Wolfcamp and Bone Spring areas. The leasehold has one operated rig drilling, and there are plans to add a second rig midyear. The firm also envisions further opportunities for growth from acquired acreage in the Northwest Shelf as well as further bolt-on acquisitions.
“The northern Delaware basin features outstanding well economics that compete at the top of our organic portfolio and is experiencing a positive rate of change in well performance unrivaled in US unconventional basins,” commented Lee Tillman, Marathon Oil president and chief executive officer.
Marathon also reported Mar. 9 that it has agreed to sell its Canadian subsidiary, which includes its 20% non-operated interest in the Athabasca Oil Sands Project (AOSP), to Royal Dutch Shell PLC and Canadian Natural Resources Ltd. for $2.5 billion in cash (OGJ Online, Mar. 9, 2017).
“Historically, our interest in the Canadian oil sands has represented about a third of our company’s other operating and production expenses yet only about 12% of our production volumes,” explained Tillman.
Contact Matt Zborowski at [email protected].
