Marathon Oil to sell interest in Angola block, buy Eagle Ford acreage


Marathon Oil to sell interest in Angola block, buy Eagle Ford acreage


HOUSTON -- Marathon Oil Corp. has unveiled plans to sell its interest in an offshore Angola block for about $590 million and to buy acreage in south Texas' Eagle Ford for about $97 million.

Marathon is selling its 10% stake in Block 32 offshore Angola to Sonangol E.P. The deal is expected to close in the fourth quarter and to have a retroactive effective date of Jan 1.

Also Tuesday, Marathon said it is moving forward with plans to buy back $1 billion of its stock under its existing outstanding share buyback program. The company said the share repurchases will be completed in two phases and the initial phase of $500 million in buybacks is mostly completed.

Marathon expects the second phase to be completed after closing a previously disclosed sale of its 10% working interest in another block in offshore Angola. That transaction, worth about $1.5 billion, is expected to close in the fourth quarter.

"With the anticipated sale of our interest in Angola Block 32, we have now completed or agreed to divestitures totaling approximately $3.5 billion, surpassing the $3 billion upper end of our stated three-year target," Chief Executive Lee M. Tillman said.

Following the $1 billion of share repurchases, Marathon Oil will have about $800 million remaining in its repurchase program.

Marathon Oil's profits from oil and gas operations have risen in recent quarters as a result of higher production. Marathon has boosted its investments in oil-bearing shale formations like the Bakken in North Dakota, and production growth in its U.S. oil plays has led to a more bullish view by ratings firms.

The company has focused on drilling oil-rich unconventional fields in the U.S., a narrower business strategy since the company spun off its downstream and petroleum assets in 2011 to form Marathon Petroleum Corp.

Last month, Marathon Oil reported its second-quarter profit grew 8.4% as the energy company reported higher revenue and a sharp drop in marketing expenses.

Shares rose by 26 cents to $36.50 in recent premarket trading. The stock has risen 4.4% in the past three months.

Dow Jones Newswires

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