Deal Insight
Marathon adds to recent Permian entry with US$700m Delaware bolt-on acquisition
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*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
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 the following images and tables:
- 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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