Marathon Oil today confirmed it will sell off its Norwegian units for $2.1billion.
Marathon Oil’s net production in Norway last year averaged approximately 80,000 barrels of oil equivalent (BOE) per day.
Det norske oljeselskap ASA will purchase Marathon Oil Norge AS for the billion dollar price tag. The transaction is expected to close in the fourth quarter of this year.
The Norwegian sale is one of two big announcements the firm made today.
Marathon Oil also confirmed it will retain its UK North Sea assets after failing to receive an attractive bid.
Chief executive Lee Tillman said: “From the beginning of this marketing process, we stated we would only sell our UK North Sea business if we received an offer that appropriately valued these assets.
“Accordingly, we will continue to operate this business as we always have – with a focus on our company’s long-held values and commitment to safe and responsible operations, and in a manner that maximizes shareholder value. We have an outstanding team in the U.K., and I’m proud of their continued contributions during this marketing period. Moving forward, I have confidence they will continue to drive value for the company.”
Mr Tillman said the Norwegian sale was part of a strategic approach to divest and re-position Marathon Oil within the marketplace.
He said: “The sale of our Norway assets advances one of our key 2014 priorities and further demonstrates our commitment to rigorous portfolio management to simplify and concentrate our business.
“Since becoming an independent E&P company in 2011, Marathon Oil has executed $6.2 billion of strategic divestitures re-positioning the portfolio for future growth and profitability. The disciplined allocation of capital to opportunities that can deliver long-term growth at higher returns and improved margins is a strategic imperative.
“With respect to our plans for the re-deployment of proceeds, we remain resolute in our commitment to capital discipline.
“Marathon Oil has a deep inventory across three high-quality U.S. resource plays with expanding opportunities to further accelerate activity. Such organic growth will be our first priority for additional capital allocation, with the balance available for share repurchases under our remaining $1.5 billion board authorization and general corporate purposes.
“I’d also like to recognize the professionalism and dedication of our Norway employees for their significant contributions over the years in building a world-class operation on the Norwegian Continental Shelf. Det norske recognizes the value of not only the assets, but also the competencies and capabilities of the people who have driven Marathon Oil’s success in Norway.”
The sale includes the Marathon Oil-operated Alvheim floating production, storage and offloading (FPSO) vessel, 10 Company-operated licenses and a number of non-operated licenses on the Norwegian Continental Shelf in the North Sea.
Recommended for you
