Marathon Oil Getting Out of the North Sea

Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Marathon Oil Corporation (NYSE:MRO) (Houston, Texas) has become the latest in a growing line of U.S. oil and gas majors to start divesting its assets in the U.K. North Sea.

The company is looking for buyers as it refocuses on onshore shale production in the U.S. According to a sale document seen by Reuters, the company has chosen investment bank Jefferies to oversee the sale process. Competitive bids have to be in by December, and the sale is expected to raise up to $200 million for Marathon. The company has refused to comment. Assets going under the hammer include the BP (NYSE:BP)-operated Foinaven fields, located in the West of Shetland area, as well as shares in the Brae complex, northeast of Aberdeen. The document stated that Marathon produces 15,000 barrels of oil equivalent (boe) per day in the North Sea and has an estimated resource of 31 million barrels. The assets will produce $85 million of cash flow in 2019.

The company declined to confirm or deny that the sales process was underway, but spokesperson Lee Warren told Reuters: "Portfolio management is an ongoing and integral element of our successful business model as we continue to simplify and concentrate our portfolio to our highest return opportunities with a focus on our differentiated position in the U.S. resource plays."

Marathon controls a 40% stake in the Brae Area complex as well as stakes in pipelines. The Foinaven area has two producing fields: Foinaven and Foinaven East, with the company having a 28% and 47% stake, respectively.

Earlier this week, Industrial Info reported that Norway's Equinor (NYSE:EQNR) (Stavanger, Norway), agreed to purchase Chevron's (NYSE:CVX) (San Ramon, California) 40% stake in the Rosebank oilfield west of Scotland's Shetland Islands for an undisclosed sum as the company continues its exit from the North Sea. In July, Chevron announced plans to sell its U.K. Central North Sea fields, including the Alba, Alder, Britannia (and satellites), Captain, Elgin/Franklin, Erskine, and Jade fields. For additional information, see October 9, 2018, article--Equinor Buys Chevron's 40% Stake in Major U.K. Oil Field.

In May, it was reported that fellow U.S. producer ConocoPhillips (NYSE:COP) was looking to sell its North Sea fields as part of its plan to focus on U.S. shale operations. In September, EOG Resources Incorporated (NYSE:EOG) sold its U.K. offshore oil and gas field assets to Tailwind Energy (London, England) in a deal reputedly worth around $300 million. The assets include 100% of the producing Conwy oilfield, a 25% non-operated interest in the Columbus gas development project and other minor asset interests in the North Sea.

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