Marathon Oil offloads Norway business for $2.7 Billion cash

Published at 11:46AM - 02/06/14

Huston based oil and gas company, Marathon Oil Corporation (NYSE: MRO) has announced the sale of its entire Norwegian oil and gas business to the Norwegian firm Det norske oljeselskap ASA.  The sale includes all operated (10) and non-operated licences within the Norwegian sector of the North Sea, as well as the Alvheim floating production, storage and offloading vessel (FPSO).

The deal worth US$ 2.7 billion, has an effective date of 1st Jan 2014, and is expected to go through in the fourth quarter of 2014, subject to all government approvals.

After all adjustments have been made for the debts and net working capital, the sale of Marathon Oil Norge is expected to net Marathon Oil Corporation US$ 2.1 billion in cash.

The sale of the entire Marathon Oil UK oil and gas business has been called off due to what Marathon sited as ‘no acceptable bids’.

“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,” said Lee M. Tillman, Marathon Oil’s president and CEO. “Since becoming an independent E&P company in 2011, Marathon Oil has executed $6.2 billion of strategic divestitures repositioning 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.

“From the beginning of this marketing process, we stated we would only sell our U.K. North Sea business if we received an offer that appropriately valued these assets,” Tillman said. “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.”

Last updated on 02:51PM - 22/07/14