Marathon, Hess Parlay Assets to Invest in Bakken

By The Bakken magazine staff | July 22, 2014

The month of June saw sales of well-known companies in the Bakken. Oil production assets, retail business, and working interest were all exchanged, which could have a significant long-term impact on the Williston Basin.
Marathon Oil Corp. sold its Norway oil production assets for $2.7 billion to Det norske oljeselaskap ASA in order to simplify and concentrate its business, according to the company.

“Since becoming an independent exploration and production company in 2011, Marathon Oil has executed $6.2 billion of strategic divestitures repositioning the portfolio for future growth and profitability,” said Lee Tillman, president and CEO of Marathon.

Before the sale of Marathon Oil Norge AS, the Norwegian asset represented 17 percent of the company’s total global production. The Bakken, in both North Dakota and Montana, represents 8 percent of Marathon’s global production.
Other companies doing business in the Bakken and following that trend are Hess Corp. and WPX Energy, which both recently announced asset sales.

Hess Corp. sold its retail business to Marathon Petroleum Corp. for $2.6 billion. Marathon Oil and Marathon Petroleum are two separate companies. According to Hess, proceeds from the sale will be used for additional share repurchases. John Hess, CEO, said the sale of the retail business marks the culmination of the company’s transformation into a strategic pure play exploration and production firm.

The sale includes 1,342 gas stations and convenience stores along the East Coast.

WPX Energy completed the sale of working interests in some of its historical Piceance Basin wells to Legacy Reserves LP for $355 million. The agreement provides WPX with 10 percent ownership in a newly created class of incentive distribution rights with Legacy.

“We will use the proceeds from the sale to build on the successes we’re seeing in our growth basins, particularly our oil plays where we grew domestic volumes by 40 percent in the first quarter versus a year ago,” said Rick Muncrief, WPX president and CEO.

WPX had a near $1.5 billion capital budget this year and plans to gear that toward growing the company’s domestic oil properties in the Williston and San Juan Basins, where WPX currently has seven rigs deployed.