Det Norske to buy Marathon Oil’s Norway business for $2.7 billion
Det Norske Oljeselskap ASA has entered into a definitive agreement to acquire Marathon Oil Norge AS, a wholly owned subsidiary of Marathon Oil, for $2.7 billion, effective Jan. 1, 2014.
The deal, expected to close in the fourth quarter, includes the Marathon-operated Alvheim floating production, storage and offloading (FPSO) vessel, 10 company-operated licenses, and several non-operated licenses in the Norwegian North Sea. In 2013, the company’s net production in Norway averaged 80,000 boe/d.
This is the latest move executed by Marathon in a series of divestitures and acquisitions. The company in September 2013 agreed to sell 10% interest in offshore Angola Block 32 for $590 million, and then reported plans to buy 4,800 net acres in the South Texas Eagle Ford shale for $97 million (OGJ Online, Sept. 10, 2013).
Last month, Marathon subsidiary Speedway agreed to acquire Hess Retail Holdings LLC from Hess Corp. for $2.87 billion (OGJ Online, May 22, 2014).
"Since becoming an independent E&P company in 2011, Marathon Oil has executed $6.2 billion of strategic divestitures, repositioning the portfolio for future growth and profitability,” said Lee M. Tillman, Marathon Oil president and chief executive officer.
"Marathon Oil has a deep inventory across three high-quality US resource plays with expanding opportunities to further accelerate activity. Such organic growth will be our first priority for additional capital allocation,” he added.
Entering the year, the company reported that more than $3.6 billion of its 2014 $5.9 billion capital, investment, and exploration budget would be allocated to resource plays as the company expects more than 30% growth from 2013 in production in the Eagle Ford, Bakken, and Oklahoma Woodford (OGJ Online, Dec. 11, 2013).
Marathon also has elected to retain its UK North Sea business after receiving “no acceptable offer.”