Marathon Oil To Sell Norway Assets For $2.7 Bln

(RTTNews) - Marathon Oil Corp. (MRO) Monday said it has entered into a definitive agreement with Det norske oljeselskap ASA under which Det norske would purchase its wholly-owned subsidiary, Marathon Oil Norge AS, for $2.7 billion.

After adjustment for debt, net working capital and interest on the net purchase price, Marathon Oil expects net proceeds of $2.1 billion at closing. The effective date of the transaction is January 1.

The companies expect to close the transaction in the fourth quarter of this year.

The sale includes the Marathon Oil-operated Alvheim floating production, storage and offloading vessel, 10 company-operated licenses and a number of non-operated licenses on the Norwegian Continental Shelf in the North Sea.

Marathon's full-year 2013 net production in Norway averaged around 80,000 barrels of oil equivalent or BOE per day.

Since becoming an independent E&P company in 2011, Marathon has executed $6.2 billion of strategic divestitures.

Regarding re-deployment of proceeds, Lee Tillman, president and CEO, said, "Marathon Oil has a deep inventory across three high-quality U.S. resource plays with expanding opportunities to further accelerate activity. Such organic growth will be our first priority for additional capital allocation...''

The balance will be available for share repurchases under the company's remaining $1.5 billion board authorization and general corporate purposes.

Scotia Waterous served as financial advisor to Marathon Oil in this deal.

Upon not receiving any acceptable offer for its U.K. North Sea business, Marathon Oil chose to retain those assets.

MRO settled on Friday at $36.66.