Marathon Signs Agreement to Sell Interest in Heimdal Area Offshore Norway for $416 Million

abarrelfullabarrelfull wrote on 04 Jun 2012 09:23

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Wednesday, July 9, 2008

Marathon Oil Corporation (NYSE: MRO) announced today that it has entered into a definitive agreement with Centrica plc, the parent company of British Gas, under which Centrica will purchase Marathon's non-operated interests in the Heimdal infrastructure, related producing fields and associated undeveloped acreage offshore Norway. The transaction, which has a total value of $416 million and an effective date of January 1, 2008, includes a $375 million purchase price plus $41 million in associated Norwegian asset tax pools, but excludes any purchase price adjustments due at closing. The companies anticipate closing the transaction, which is subject to Norwegian regulatory approval, during the late third quarter or early fourth quarter of 2008.

Under the terms of the agreement, Centrica will acquire Marathon's 23.8 percent interest in the Heimdal field, as well as its 46.9 percent interest in the Vale field; a 20 percent interest in the Byggve field; a 20 percent interest in the Skirne field; and a 50 and 20 percent interest in the Peik and Heimdal East discoveries, respectively. Marathon's net proved reserves associated with these assets as of year end 2007 were 4.8 million barrels of oil equivalent (mmboe), and total net risked resources of approximately 17.5 mmboe. Current net production from these operations averages approximately 7,000 barrels of oil equivalent per day. None of the assets involved in this agreement are associated with Marathon's Alvheim/Vilje development or related operations on the Norwegian Continental Shelf.

"Marathon's decision to sell its interest in Heimdal and related assets is part of our ongoing efforts to actively manage the Company's global asset portfolio to ensure alignment with our business strategy and to generate sustainable value growth," said David E. Roberts, Jr., Marathon executive vice president, Upstream. "This business approach demands that we continually evaluate the value of existing operations against the value of new or emerging opportunities."

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