Marathon Oil said it was unloading more than $1 billion in assets in the United States as it streamlines its portfolio during the market downturn. File Photo by ekina/UPI
HOUSTON, April 12 (UPI) -- U.S. energy company Marathon Oil Corp. said new agreements put the total value of divestments at more than $1 billion since last year.
"Since August 2015, we have now announced or closed non-core asset sales of approximately $1.3 billion, surpassing our targeted range of $750 million to $1 billion," Marathon Oil President and CEO Lee Tillman said in a statement.
The largest of the latest sales includes the release of properties in Wyoming that were producing on average 16,500 barrels of oil equivalent per day during the first quarter of the year. For a combined divestment of $870 million, the sale to an undisclosed third party includes about 600 miles of export pipeline from the Big Horn and Wind River basins in the state.
A separate $80 million sale includes gas basins in Colorado, undeveloped property in the Western part of Texas and a 10 percent stake in Shenandoah discovery in the Gulf of Mexico.
Marathon last year sold off some of its acreage in the Gulf of Mexico for $205 million, but said it was keeping its interests in the emerging Shenandoah basin. Shareholder partner Anadarko Petroleum said in 2014 it encountered an oil layer measuring more than 1,000 feet thick while drilling into Shenandoah, quantifying it as a significant discovery.
Energy companies are trimming staff and unloading assets in an effort to streamline their operations during a market characterized by persistently low crude oil prices. In October, when crude oil prices were about 6 percent higher than current levels, British energy company BP said it was moving to divest about $10 billion in assets by the end of 2015.
Tillman is among those anticipating oil prices will remain low for a longer period of time. This, he said, means the time is right to make portfolio adjustments.
"Ongoing portfolio management continues to drive the simplification and concentration of our portfolio to lower risk, higher return U.S. resource plays and support our 2016 objective of balance sheet protection," he said.