Apache Corp., Houston, (NYSE, Nasdaq: APA) and another undisclosed buyer plan to acquire all of the operated assets and a portion of the outside-operated assets in the Permian Basin of New Mexico and West Texas from Marathon Oil Corp., Houston, (NYSE: MRO)for a combined $301 million.

Together, the assets include 100% of Marathon's interests in Indian Basin Field and the Indian Basin gas plant, as well as Marathon's company-operated properties in Burton Flats and Travis fields in Eddy County, New Mexico; 100% of Marathon's interests in company-operated Permian Basin assets in Lea County, New Mexico, and in Reagan, Howard and Sterling counties in Texas; and all of Marathon's interests in the Chenot/Putnam area in Pecos County, Texas.

Total net production of the assets being sold averaged 8,150 barrels of oil equivalent per day in first-quarter 2009.

Apache plans to acquire nine Permian Basin oil and gas fields for $187.4 million, including operated production in Lea County, New Mexico, and Reagan, Howard and Sterling counties in Texas, as well as Marathon's interests in the Chenot/Putnam area in Pecos County, Texas. Current net production is 10 million cubic feet of gas, 1,332 barrels of oil, and 524 barrels of gas liquids per day for a total 3,500 barrels of oil equivalent per day.

“These fields are a great fit with Apache's existing properties in the Permian Basin, particularly in Lea County, New Mexico,” says John Crum, Apache co-chief operating officer and president – North America. “Properties with approximately 75% of the proved reserves and 61% of the current production offset Apache-operated units in Lea County. Based on our experience with well-spacing in the area, we have identified more than 200 possible drilling locations on the Marathon acreage.”

When Apache started downsizing well-spacing at the Northeast Drinkard Unit from 16 wells per square-mile section to 32 wells per section, field production grew from 700 barrels per day to 2,000 barrels per day, the company reports. Marathon's fields currently have 16 wells per section.

“Although this is a modest transaction, it is an opportunity to add to our substantial position in the area,” Crum says.

Apache holds 914,226 gross acres (447,760 net) in the basin and current net production of 34,500 barrels of oil and 86 million cubic feet of gas per day.

G. Steven Farris, Apache’s chairman and chief executive, says, “With nearly $4 billion in available cash and credit and debt at 25% of capitalization, we are in a good position to take advantage of opportunities as they emerge in today’s low commodity-price environment.”

Marathon president and chief executive Clarence P. Cazalot Jr. says, “We have announced asset sales with transaction values totaling approximately $1.6 billion since launching our asset review and divestiture program in March 2008. It's anticipated this program will generate $2 billion to $4 billion on a pretax basis, with additional announcements expected by mid-2009.”

In April, Marathon completed the sale of subsidiary Marathon Oil Ireland Ltd. to PSE Ireland Ltd., a subsidiary of Petroliam Nasional Berhad (Petronas) for $180 million.

Closings of the Permian transactions are expected in the second quarter. The effective date is Jan. 1.

The outside-operated assets retained by Marathon in the Permian Basin produced approximately 7,150 barrels equivalent per day during the first quarter.

As of March 31, Marathon reported it had $1.9 billion of cash equivalents and its full capacity under its $3 billion committed revolving credit facility for total liquidity of $4.9 billion.