Eagle Ford, Texas, sold to Marathon Oil

In Eagle Ford, Texas, Marathon Oil completes a €3 billion transaction and doubles the size of its basin.

Share:

Subscribe for unlimited access to all energy sector news.

Over 150 multisector articles and analyses every week.

Your 1st year at 99 €*

then 199 €/year

*renews at 199€/year, cancel anytime before renewal.

In Eagle Ford, Texas, Marathon Oil completes a $3 billion transaction and doubles the size of its basin .

A promising acquisition

At Eagle Ford, Marathon Oil is acquiring the Eagle Ford assets from Ensign Natural Resources. The company is expected to complete the transaction by the end of 2022. The Eagle Ford transaction results in a significant financial accumulation for the company.

Thus it allows an improvement of the return on capital. Finally, the company maintains a convincing industrial logic as well as a track record in investment quality. The transaction significantly and immediately improves Marathon Oil‘s key financial indicators .

As such, it is expected to result in a 17% increase in cash flow from operations in 2023. In addition, it would increase free cash flow by 15%. The company is making the transaction at approximately 3.4 times 2023 EBITDA.

As the transaction improves Marathon Oil’s cash flow profile, it immediately improves distributions to shareholders. The increase is carried out in accordance with the company’s capital repayment framework. Marathon Oil aims to return at least 40% of annual operating cash flow to shareholders.

In fact, the company expects to increase its distribution capacity to shareholders in 2023 by approximately 17%. In addition, the company plans to increase its quarterly base dividend by an additional 11% after the transaction. Marathon Oil still expects to achieve its goal of returning at least 50% of adjusted operating cash flow to shareholders.

A solid outlook

This transaction expands Marathon Oil’s position with the addition of 130,000 net acres, or approximately 526 square kilometers. This acquisition includes a 97% working interest located mainly in prolific condensate and wet gas areas. In addition, the company estimates that it is acquiring over 600 undrilled locations.

The acquisition of Marathon Oil represents an inventory life of over 15 years. These stocks immediately compete for capital in the company’s portfolio. The acreage is adjacent to the existing Eagle Ford position.

The situation allows the company to further leverage its experience and operational strengths in the basin. This increases the company’s basin area to 290,000 net acres, or approximately 1174 square kilometers. This increase contributes to optimize supply chain accessibility and cost control.

The company’s acquisition also includes 700 existing wells. Most were entering service before 2015 with first-generation designs. These existing locations have the potential for upward redevelopment. However, this has not been taken into account in the valuation of the assets or the inventory by the company.

Marathon Oil plans to finance the transaction with a combination of cash and debt. The company is taking out these loans on the company’s revolving credit facility and a new callable debt. The company does not expect the transaction to significantly affect its debt profile.

Commercial crude oil inventories fell more than expected in the United States, while gasoline demand crossed a key threshold, offering slight support to crude prices.
The United States extends a 30-day reprieve to NIS, controlled by Gazprom, as Serbia seeks to maintain energy security amid pressure on the Russian energy sector.
With net output reaching 384.6 million barrels of oil equivalent, CNOOC Limited continues its expansion, strengthening both domestic and international capacities despite volatile crude oil prices.
The Daenerys oil discovery could increase Talos Energy’s proved reserves by more than 25% and reach 65,000 barrels per day, marking a strategic shift in its Gulf of Mexico portfolio.
The United States will apply 50% tariffs on Indian exports in response to New Delhi’s purchases of Russian oil, further straining trade relations between the two partners.
Rising energy demand is driving investments in petrochemical filtration, a market growing at an average annual rate of 5.9% through 2030.
Chevron has opened talks with Libya’s National Oil Corporation on a possible return to exploration and production after leaving the country in 2010 due to unsuccessful drilling.
The Impact Assessment Agency of Canada opens public consultation on its 2024-2025 draft monitoring report for offshore oil and gas exploratory drilling off Newfoundland and Labrador.
Cenovus Energy announces the acquisition of MEG Energy through a mixed transaction aimed at strengthening its position in oil sands while optimizing cost structure and integrated production.
Vantage Drilling International Ltd. extends the validity of its conditional letter of award until August 29, without changes to the initial terms.
Libya is preparing to host an energy forum in partnership with American companies to boost investment in its oil and gas sectors.
Washington increases pressure on Iran’s oil sector by sanctioning a Greek shipper and its affiliates, accused of facilitating crude exports to Asia despite existing embargoes.
The Bureau of Ocean Energy Management formalizes a strategic environmental review, setting the framework for 30 oil sales in the Gulf of America by 2040, in line with a new federal law and current executive directives.
Amid repeated disruptions on the Druzhba pipeline, attributed to Ukrainian strikes, Hungary has requested U.S. support to secure its oil supply.
Norwegian producer Aker BP raises its oil potential forecast for the Omega Alfa well, part of the Yggdrasil project, with estimated resources reaching up to 134 million barrels of oil equivalent.
The gradual restart of BP’s Whiting refinery following severe flooding is driving price and logistics adjustments across several Midwestern U.S. states.
Bruno Moretti, current special secretary to the presidency, is in pole position to lead Petrobras’ board of directors after Pietro Mendes’ resignation for a regulatory role.
Next Bridge Hydrocarbons completes a $6 million private debt raise to support its involvement in the Panther project while restructuring part of its existing debt.
Sinopec Shanghai Petrochemical reported a net loss in the first half of 2025, impacted by reduced demand for fuels and chemical products, as well as declining sales volumes.
Zener International Holding takes over Petrogal’s assets in Guinea-Bissau, backed by a $24 million structured financing deal arranged with support from Ecobank and the West African Development Bank.

Log in to read this article

You'll also have access to a selection of our best content.

or

Go unlimited with our annual offer: €99 for the 1styear year, then € 199/year.