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Marathon acquires 70 000 net Delaware Basin acres in the Permian for US$1.1 billion


Marathon acquires 70 000 net Delaware Basin acres in the Permian for US$1.1 billion

Report summary

Marathon announced the US$1.1 billion acquisition of 70,000 net acres in the Delaware Basin and Northwest Shelf from private equity-backed BC Operating alongside the US$2.5 billion sale of its stake in the Athabasca Oil Sands Project in Canada. The US$1.1 billion purchase price is on par with our base case valuation. Marathon's Delaware Basin entry cost is on the low end of recent deals in the basin, largely due to the fragmented acreage position and large concentration of acreage on the fringe of the play. However, the deal includes considerable upside from downspacing and developing additional prospective intervals, as well as extending the core of the play. A key risk to the valuation is the potential for service cost inflation. Marathon's entry into the Permian elevates the company to a unique standing amongst its peers: the company is now the only operator with material positions in the top four oil plays in the Lower 48.

What's included?

This report includes 1 file(s)

  • Marathon acquires 70 000 net Delaware Basin acres in the Permian for US$1.1 billion PDF - 409.88 KB 7 Pages, 9 Tables, 1 Figures

Description

The upstream oil and gas industry conducts activities against a backdrop of growing energy and environmental challenges. Political instabilities, international conflicts and government and environmental regulation have all impacted the production process.

This has forced companies to re-examine their corporate strategy, moving away from high-risk exploratory drilling to lower-risk exploration in mature basins as they search for increased returns.

This Upstream Oil and Gas Deal Insight report provides an in-depth analysis of this deal. You will also find information about upstream assets and the strategic rationale behind the deal.

For investors and businesses, this deal insight report provides an understanding of the effect this deal will have on the market, including oil and gas pricing and assumptions. Use it to keep up to date with deal announcements, gain expert insights and analyse potential developments that might affect your strategy.

Wood Mackenzie goes beyond company-reported data and announcements to give you an independent and informed view. Our unique valuation metrics are underpinned by our deep understanding of upstream assets and companies. We help you objectively benchmark and evaluate asset and corporate deals so you can compare deal economics around the world.

  • Executive summary
  • Transaction details
  • Upstream assets
  • Deal analysis
  • Upsides and risks
  • Strategic rationale
  • Oil & gas pricing and assumptions

In this report there are 10 tables or charts, including:

  • Executive summary
    • Executive summary: Table 1
  • Transaction details
  • Upstream assets
    • Delaware Basin wells since 2015
    • Upstream assets: Table 1
    • Upstream assets: Table 2
    • Upstream assets: Table 3
  • Deal analysis
    • Deal analysis: Table 1
    • Deal analysis: Table 2
    • Deal analysis: Table 3
  • Upsides and risks
  • Strategic rationale
  • Oil & gas pricing and assumptions
    • Oil & gas pricing and assumptions: Table 1
    • Oil & gas pricing and assumptions: Table 2
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