Houston’s Marathon Oil Corp. (NYSE: MRO) said April 11 that it agreed to divest nearly $1 billion in assets with most of the value tied to a withdrawal from its Wyoming upstream and midstream operations.
Marathon’s Wyoming assets, which include the 570-mile Red Butte pipeline, will be sold for $870 million, excluding closing costs. The Red Butte is the only export line in the area. The company’s waterflood developments in the state included developments in the Big Horn and Wind River basins, where it averaged 16,500 barrels of oil equivalent per day (boe/d) in first-quarter 2016.
The effective date of the transaction is Jan. 1, with the company saying it expects to close by mid-year 2016. In all, Marathon sold about $950 million in assets.
In separate transactions totaling $80 million, Marathon signed agreements for the sale of:
- 10% working interest in the Shenandoah discovery in the Gulf of Mexico;
- Operated natural gas assets in Colorado’s Piceance Basin; and
- Undeveloped acreage in West Texas.
As of March, the company had reported divestitures of $300 million in 2016 as part of its portfolio management. The company did not appear to have significant funds allocated to Wyoming or Colorado. About 69% of its $1.4 billion capex is devoted to the Eagle Ford, Scoop/Stack and Bakken.
“Since August 2015, we have now announced or closed noncore asset sales of approximately $1.3 billion, surpassing our targeted range of $750 million to $1 billion," said Lee Tillman, president and CEO. “Ongoing portfolio management continues to drive the simplification and concentration of our portfolio to lower risk, higher return U.S. resource plays and support our 2016 objective of balance sheet protection.”
Marathon Oil held net proved reserves at the end of 2015 of 2.2 Bboe in North America, Europe and Africa.
The company said in March it expects 2016 production to decline by up to 8% after adjusting for divestitures.
The company reported pro forma year-end 2015 liquidity of $5.7 billion.
Darren Barbee can be reached at dbarbee@hartenergy.com.
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