HOUSTON (AP) — Marathon Oil Corp. of Houston is selling its Norwegian business to Det Norske Oljeselskap ASA in a deal valued at about $2.7 billion as it streamlines operations and hones its focus on the U.S.
Det Norske is buying the subsidiary Marathon Oil Norge AS, which comes with the Alvheim floating production, storage and offloading vessel, 10 company-run licenses and some non-operated licenses on the Norwegian Continental Shelf in the North Sea. Last year’s net production in Norway averaged approximately 80,000 barrels of oil equivalent per day.
Marathon anticipates approximately $2.1 billion in net proceeds from the sale, after adjusting for debt, net working capital and interest.
In 2011, Marathon spun off its refining operations, effectively splitting the company in two. Since then, CEO Lee Tillman said the company has conducted $6.2 billion of strategic divestitures, ramped up share buybacks, and increased activity in lucrative U.S. oil and gas plays.
The Houston company recently sold off assets in Angola, while accelerated rig activity in Eagle Ford, Bakken and Oklahoma Woodford formations in the U.S., areas that have boomed due to new drilling techniques.
Marathon had been shopping its U.K. North Sea business as well, but said Monday that it had not receive an acceptable offer, and would hold on to those assets.
The company plans to use proceeds from Norwegian sale to accelerate activity in the U.S. and for additional stock buybacks, Tillman said Monday.
The sale of the Norwegian assets is expected to close in the fourth quarter.
Shares of Marathon Oil are up almost 4 percent over the last year and at Friday’s closing price of $36.66, they are approaching all-time highs reached in 2007, when energy prices were streaking toward record levels.