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

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27 March 2017

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
    • 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:

  • Document

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

    PDF 1.20 MB

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