NorthAmOil: Marathon to purchase Ensign’s Eagle Ford assets for $3bn

Marathon Oil has agreed to acquire the Eagle Ford shale assets of Ensign Natural Resources for $3bn cash. The assets – in the core of the play – nearly double Marathon’s Eagle Ford position and are adjacent to Marathon’s existing Eagle Ford wells.

The transaction, expected to close by the end of the year, will add 526.1 net square km with a 97% working interest. The acreage is expected to produce 67,000 barrels of oil equivalent per day (boepd) in the fourth quarter of 2022.

The assets being acquired include more than 600 undrilled locations, representing an inventory life greater than 15 years, and 700 existing wells. Most of the existing wells were drilled before 2015 and offer redevelopment potential, said Marathon.

The acreage is located primarily in the prolific condensate and wet gas phase windows of the play, said Marathon.

In total, the purchase raises Marathon's Eagle Ford assets to 1,173.6 sq km and will contribute to optimised supply chain accessibility and cost control. The service market is tight.

The inventory purchased immediately competes for capital in Marathon’s portfolio, the company said. But the immediate double-digit accretion to key financial metrics and shareholder distributions will be consistent with Marathon’s return of capital plans and is expected to raise its base dividend by 11% after the transaction closes.

"This acquisition in the core of the Eagle Ford satisfies every element of our exacting acquisition criteria, uniquely striking the right balance between immediate cash flow accretion and future development opportunity," said Marathon’s chairman, president and CEO, Lee Tillman.