Deal insight

Marathon adds to recent Permian entry with US$700m Delaware bolt-on acquisition

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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.

What's included

This report contains

  • Document

    Marathon adds to recent Permian entry with US$700m Delaware bolt-on acquisition

    PDF 1.20 MB

Table of contents

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

Tables and charts

This report includes 11 images and tables including:

Images

  • Marathon's Delaware acreage and industry-operated wells drilled since 2015
  • Adjusted acreage pricing for Northern Delaware M&A deals

Tables

  • Executive summary: Table 1
  • Upstream assets: Table 1
  • Upstream assets: Table 2
  • Upstream assets: Table 3
  • 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

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