Marathon Oil Seeks North Sea Buyer, Boosts Shale SpendingStephen Cunningham
Marathon Oil Corp., the U.S. energy explorer that spun off its refineries two years ago, is seeking a buyer for North Sea oilfields as it shrinks its asset base to focus on expanding onshore North American production.
The planned disposals will add to almost $3.5 billion of asset sales in the past three years, Houston-based Marathon said today in a statement. The company will divest sites off Britain and Norway that accounted for 25 percent of crude oil sales volumes in the third quarter, according to a Nov. 4 presentation that excluded Libyan output.
“Marathon had previously talked about conducting a strategic review of the declining asset base which we think simplifies the portfolio,” Scott Hanold, a Minneapolis-based analyst for RBC Capital Markets LLC, wrote in a note to clients today.
Marathon spun off its refining business into Marathon Petroleum Corp. in 2011 to create a “pure-play” production company. It has been selling assets in recent years to focus on high-margin, high-growth areas, including shale formations that have contributed to booming North American oil and natural gas production.
The company is accelerating drilling in the “highest-value” shale-resource plays -- the Eagle Ford, Bakken and Oklahoma Woodford, Chief Executive Officer Lee Tillman said in the statement today. Marathon announced $5.9 billion in planned spending for 2014, with 61 percent of that going to North American shale areas.
Divestments to date have exceeded the company’s $1.5 billion to $3 billion target, the CEO said. “We have no sacred assets,” Tillman said on an analyst day webcast today.
The company is more than doubling its planned share repurchases. It will buy back as much as $2.5 billion in stock, up from the $1 billion planned in September.
Marathon dropped 1.1 percent to $35.69 at the close in New York. The stock has gained 16 percent this year.
Marathon has operated in the U.K. for more than 20 years and its assets include the Brae Complex and the Foinaven field, its website shows. The company operated 10 licenses on Norway’s continental shelf at the end of 2012 and the country represented 46 percent of its non-U.S. liquid-hydrocarbon sales last year.