Deal Insight
Marathon adds to recent Permian entry with US$700m Delaware bolt-on acquisition
Report summary
On 21 March 2017 Marathon bought 21,000 net acres in the Delaware Basin for US$700 million from Black Mountain Oil & Gas and other private sellers. The deal comes soon after Marathon entered the Permian through a US$1.1 billion deal with BC Operating. Marathon has quickly amassed a position of scale in the play – it now holds 91,000 net Permian acres. After adjusting for production at US$40,000 / flowing barrel, the purchase price equates to US$32,571 per net acre. This is significantly higher than the US$17,475 per net acre that Marathon paid for the Delaware acreage in the earlier deal. Our valuation indicates a similar picture. But the new acreage helps to fill in the fragmented position that Marathon acquired from BC Operating and is more concentrated in core Delaware areas.
Table of contents
- Executive summary
- Transaction details
- Upstream assets
- Deal analysis
- Upsides and risks
-
Strategic rationale
- Marathon
- Black Mountain Oil & Gas
- Oil & gas pricing and assumptions
Tables and charts
This report includes 11 images and tables including:
- Executive summary: Table 1
- Marathon's Delaware acreage and industry-operated wells drilled since 2015
- Upstream assets: Table 1
- Upstream assets: Table 2
- Upstream assets: Table 3
- Adjusted acreage pricing for Northern Delaware M&A deals
- Deal analysis: Table 1
- Deal analysis: Table 2
- Deal analysis: Table 3
- Oil & gas pricing and assumptions: Table 1
- Oil & gas pricing and assumptions: Table 2
What's included
This report contains:
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