Marathon joins Permian race

Marathon Oil has agreed to purchase about 283 net square kilometres in the popular Permian Basin.

According to a company announcement on Thursday, the US independent will acquire the property for USD 1.1 billion in cash from BC Operating and other entities. The sale includes 51,500 net acres in the Northern Delaware Basin of New Mexico, a sub-basin of the prolific Permian Basin, which also stretches into west Texas.

The pivot to the Permian comes at the same time Marathon is divesting of USD 2.5 billion in assets in Canada’s oil sands. The Permian, and particularly its Delaware Basin that straddles the Texas-New Mexico border, has been a centre for land grabs in recent months. ExxonMobil, Halcón Resources and Noble Energy, among others, have all swallowed up acreage in the region since the beginning of the year.

Marathon’s new land will provide the company access to the Wolfcamp and Bone Spring shale formations. The property currently produces 5,000 boepd and operates one drilling rig, and Marathon plans to add a second later in the year.

Marathon Oil president and CEO Lee Tillman commented on the deal in a company statement. “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,” said Tillman.