Marathon Oil has signed a definitive agreement to acquire nearly 21,000 net surface acres located primarily in the Permian’s Northern Delaware basin of New Mexico from Black Mountain Oil & Gas and other private sellers for $700m, subject to closing adjustments.
With this all-cash transaction, Marathon Oil increases its acreage at Permian to more than 90,000 net acres.
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Marathon Oil president and CEO Lee Tillman said: “Today’s 21,000 acre bolt-on in the Northern Delaware is an excellent fit with the basin entry acquisition we announced earlier this month.
“The combined deals provide us with more than 90,000 acres in the Permian, more than 70,000 of which is concentrated in the Northern Delaware.
“While we expect to pursue additional trades and grassroots leasing, this bolt-on achieves the scale necessary for efficient long-term development in the basin.”
Under the deal with Black Mountain, the acquisition includes up to ten target benches within approximately 5,000ft of stacked pay.
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By GlobalDataAround 20,000 net acres from the acquired 21,000 net acres are situated in the Northern Delaware basin, including the primary targets in Wolfcamp and Bone Spring.
The area currently produces around 400 barrels of oil equivalent per day.
The acreage includes approximately 230 million barrels of oil equivalent (boe) of risked resource with 440 gross company operated locations, as well as the potentiality of nearly 550 million boe with 950 total gross company-operated locations.
After the completion of this acquisition, Marathon Oil will hold around 91,000 net Permian acres, 71,500 of which are located in the Northern Delaware.
The company estimates further upside opportunities from 18,500 net acres in Northwest Shelf.
The Black Mountain acquisition carries an effective date of 1 March and is expected to close in the second quarter of this year.
