Marathon Oil Corporation announced it has signed a definite purchase and sale agreement to acquire PayRock Energy Holdings LLC for a total of approximately US$888 million (£606 million).
Through this agreement, Marathon Oil is set to gain Payrock Energy’s portfolio in the Anadarko Basin STACK play, in Oklahoma, US.
“Acquiring PayRock’s STACK position will meaningfully expand the quality and scale of Marathon Oil’s existing portfolio in one of the best unconventional oil plays in the US”, Marathon Oil president and CEO Lee Tillman, said.
Marathon Oil Buys PayRock For Reserves
Payrock Energy holds approximately 61,000 net surface acres (95.31 square miles) and a current production of 9,000 barrels of oil equivalent per day (boepd).
Overall, the company has a resource potential of 700 million boepd from increased well density in Meramec and Woodfard, as well as the Osage development, according to a statement by Marathon Oil.
“They’ve built a material position in the high margin oil window of the STACK and have consistently delivered industry-leading well results. The recent moves we’ve taken to strengthen the Company’s balance sheet, including the successful execution above the top end of our non-core asset divestiture target, have positioned us to be opportunistic to acquire what is an excellent strategic fit”, Tillman added.
Marathon Oil Increases 2017 Operations
According to the CEO, the company anticipates a drilling programme that will include four rigs in its STACK position “which will achieve leasehold drilling requirements while accelerating delineation work”.
Payrock Energy is a portfolio company of Encap Investments.
The transaction, which is still subject to customary closing conditions, is expected to be closed in the third quarter of this year and will be funded with cash on hand.Last updated on 05:21PM - 21/06/16