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Marathon Oil announces $3.5 billion acquisition of Eagle Ford Shale assets
Jun 09, 2011 | 3255 views | 1 1 comments | 14 14 recommendations | email to a friend | print
This map shows the combined Eagle Ford Shale acreage owned or under lease by Marathon Oil after the $3.5 billion purchase of Hilcorp Resources.
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HOUSTON, June 1, 2011 - Marathon Oil Corporation (NYSE: MRO) announced on June 1 it has reached a definitive agreement with Hilcorp Resources Holdings, LP to purchase its assets in the core of the Eagle Ford shale formation in Texas in a transaction valued at $3.5 billion subject to closing adjustments, customary terms and conditions, and Hart-Scott-Rodino approval. Hilcorp Resources Holdings is a partnership between affiliates of Hilcorp Energy Company and Kohlberg Kravis Roberts & Co. LP. Along with other transactions expected to close by the end of 2011, Marathon’s Eagle Ford acreage position is expected to more than double to 285,000 net acres. The Hilcorp transaction is expected to close Nov. 1, 2011 with an effective date of May 1, 2011.

Hilcorp acreage acquisition highlights:

•Approximately 141,000 net acres (217,000 gross) primarily in Atascosa, Karnes, Gonzales and DeWitt counties in Texas

• Potential opportunity to acquire approximately 14,000 additional net acres through tag-along rights and other leasing

• Approximately 90 percent operated with 65 percent average working interest

• As of May 1 there were 36 wells producing approximately 7,000 net (17,000 gross) barrels of oil equivalent (boe) per day, of which 80 percent is liquids (three-fourths of which is crude oil and condensate)

• 10 additional wells drilled and awaiting completion

• Six rigs currently operating and two dedicated hydraulic fracturing crews

• Year-end production expected to be approximately 12,000 net boe per day

• Total net risked resource potential of 400 - 500 million boe with upside potential from additional downspacing and other stacked pay potential

• Potential to book up to 100 million boe of proved reserves by the end of 2011

• Production expected to increase to approximately 80,000 net boe per day by 2016

“Marathon has captured a top-five acreage position in the core of the premier resource play in the U.S. since first entering the Eagle Ford in November 2010. This transaction enhances our already strong North America position focused on unconventional, liquids-rich resource plays that provide low-risk, scalable and profitable growth,” said Clarence P. Cazalot Jr., Marathon president and CEO. “This and other projects under development serve as a catalyst for Marathon to increase our projected Upstream production growth to 5 - 7 percent on a compound average annual growth rate (CAGR) during the period 2010 - 2016.

“In addition to establishing our position in the highest value oil and condensate core area of the Eagle Ford shale, these assets will deliver immediate production and reserve additions, an active Company-operated drilling program, significant resource potential, as well as solid economic returns and profitability that are immediately accretive to earnings and operating cash flow, and expected to be self-funding by 2014.

“With our technical expertise and best-in-class drilling, along with our project execution skills, we are poised to maximize profitable reserve and production growth across our liquids-rich resource plays, particularly in the Eagle Ford. Importantly, our financial flexibility enables us to pursue this growth while maintaining a strong balance sheet,” Cazalot said.

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wheat8744
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September 14, 2011
I live in the extream norther part of Karnes County, Forest Oil has two wells in production just past our residence, currently they are hauling two to three loads of salt water per hour around the clock seven days a week. Needless to say, there a few trucks that slow down but not most! Does anyone know how I can send a complaint to Forest Oil so maybe thay will talk to their trucking contractor, and maybe come fix / work on the county roads, it is their turcks taht are tearing it up?