US-based Marathon Oil has agreed to acquire natural gas assets from private equity-backed Ensign Natural Resources for a cash consideration of $3bn.

The acquisition is expected to double Marathon Oil’s position in the Eagle Ford shale basin in South Texas.

Under the deal terms, Marathon Oil will acquire 130,000 net acres, located adjacent to its existing Eagle Ford position, from Ensign Natural Resources.

The assets are located in Live Oak, Bee, Karnes, and Dewitt Counties across the condensate, wet gas, and dry gas phase windows of the Eagle Ford.

The acreage is expected to materially increase Marathon Oil’s basin scale to 290,000 net acres.

Marathon Oil chairman, president, and CEO Lee Tillman said: “This acquisition in the core of the Eagle Ford satisfies every element of our exacting acquisition criteria, uniquely striking the right balance between immediate cash flow accretion and future development opportunity.

“The transaction is immediately accretive to our key financial metrics; it will drive higher distributions to our shareholders consistent with our operating cash flow driven Return of Capital Framework; it’s accretive to our inventory life with high rate-of-return locations that immediately compete for capital; and it offers compelling industrial logic by nearly doubling our position in a basin where we have a tremendous track record of execution excellence.”

Marathon Oil anticipates the acquisition to cover over 600 undrilled locations, representing more than 15 years of inventory life.

The acquisition also includes 700 existing wells with upside redevelopment potential.

Subject to customary terms and conditions, including closing adjustments, the transaction is planned to be closed by the end of 2022.

The agreement comes as several energy producers look to benefit from surging global oil and gas prices due to market disruption as a result of Russia’s military incursion on Ukraine, reported Reuters.