Marathon Oil is looking for a buyer for its 80,000 acres in the Marcellus Shale formation, in a bid to trim its non-core assets – Marcellus Drilling News reported yesterday.
The land in West Virginia and Pennsylvania is reported to be put up for sale because the company does not consider them central to its growth plans. The specific price has not been set but it is believed that the company could realize up to $1,000 an acre.
A source close to the company said that the move is a part of Marathon’s re-evaluation of its portfolio in the wake of last year’s spin-off of its refining division.
Marathon Oil has been engaged in shale exploration in the Marcellus since 2009, entering into a JV with Triana Energy Investments LLC in 2011. Nevertheless, Marcellus operations have always been marginal for the company which explores oil-rich shales in South Texas.
Last month, when Marathon was upgraded by Fitch Ratings to ‘BBB+’ from ‘BBB’, it quoted the company’s strong performance in Eagle Ford. The company had significantly exceeded previous production guidance for the shale play from 80,000 boepd by 2016 to approximately 140,000 boepd by 2017.
Concentrating on Eagle Ford, Marathon has been busy shedding its other, less profitable, assets. In recent months, Marathon Oil pulled out of Poland. It also sold its North Sea oil business in Norway to the Norwegian company Det Norske Oljeselskap.
The divestment of Marathon’s Marcellus assets was not confirmed by the company’s spokeswoman Lee Warren who said that Marathon Oil would not comment “on rumours and speculation in the market”.
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