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Marathon Oil to sell assets for $2.5 billion, buy for $1.1 billion

Marathon Oil
Oil exploration   Canadian Oil Sands and Permian Basin

Marathon Oil announced it has signed an agreement to sell its Canadian subsidiary, which includes the company's 20 percent non-operated interest in the Athabasca Oil Sands Project (AOSP).


Buyers are Shell and Canadian Natural Resources Limited and the price is $2.5 billion in cash, excluding closing adjustments.

Marathon Oil also announced the signing of a definitive agreement to acquire approximately 70,000 net surface acres in the Permian basin from BC Operating, Inc. and other entities for $1.1 billion in cash, excluding closing adjustments.

The acquisition includes 51,500 acres in the Northern Delaware basin of New Mexico, and current production of approximately 5,000 net barrels of oil equivalent per day (boed).

"Divesting of our Oil Sands Mining business at an attractive value while also acquiring 70,000 net acres in the world-class Permian basin are transformative milestones that will further align our portfolio with our strategy," Marathon Oil President and CEO Lee Tillman said.

"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 percent of our production volumes.

"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 U.S. unconventional basins.

"This deal expands the quality and depth of our already robust inventory while securing a foundational footprint in the Delaware basin with 5,000 feet of oil-rich stacked pay.

"Today's announcements give us even greater focus and concentration on our diverse set of high-return opportunities in the U.S. resource plays, and strongly position us to generate long-term value for our shareholders for many years to come."


 

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