Marathon Oil has agreed to buy an additional acreage of nearly 21,000 net surface acres in the Permian Basin for $700m from Black Mountain Oil & Gas and other private sellers.
The newly bought land by Marathon which is primarily located in the Northern Delaware Basin of New Mexico takes the company’s overall acreage in the Permian Basin to over 90,000 net acres.
The acquisition includes the Wolfcamp and Bone Spring formations with a combined current production of nearly 400 barrels of oil equivalent per day (boed).
Overall, the assets to be acquired include 950 total gross operated locations operated by Black Mountain that have about 550 million BOE of total resource potential.
Earlier, in the month, Marathon had announced its acquisition of nearly 70,000 net surface acres in the Permian Basin for $1.1bn from BC Operating and other entities. It included 51,500acres in the Northern Delaware basin of New Mexico with current production of nearly 5,000boed.
The Black Mountain deal will be a bolt-on acquisition for Marathon which is likely to be completed in the second quarter.
According to Marathon Oil president and CEO Lee Tillman said: “The combined deals provide us more than 90,000 acres in the Permian, over 70,000 of which is concentrated in the Northern Delaware.
"While we expect to pursue additional trades and grassroots leasing, this bolt-on achieves the scale necessary for efficient long-term development in the basin."
In another deal made this month, Marathon Oil had divested its Canadian subsidiary which includes a 20% non-operated stake in the Athabasca Oil Sands Project (AOSP) for $2.5bn to Shell and Canadian Natural Resources.