Divestiture — Eagle Ford Shale News

Statoil and Talisman Eagle Ford Acreage Map

Talisman Energy Inc. and Statoil ASA have tabled plans to to sell their joint venture in the Eagle Ford Shale after offers came in lower than expected, Bloomberg reported in early July of 2014.

The companies were seeking around $4-billion for a 50-50 partnership, according to Bloomberg, which cited unidentified sources knowledgeable on the matter. Bids fell short in part because the venture produces especially light condensate, rather than crude oil, which commands more money, the article noted.

In June of 2013, our site reported (via Reuters) that Talisman Energy had retained the Royal Bank of Canada to determine if buyers were interested in the company’s Eagle Ford acreage. Talisman has approximately 70,000 net acres in the play according to a company spokesman.

Talisman said in March it plans to sell $2-billion of assets in 18 months to re-direct its focus on a smaller number of areas. In July of 2014, the company announced plans to unload its Australian operations.

Talisman and Statoil entered their joint venture in 2010. Last year, Statoil took over operations of the eastern portion of the JV. Statoil has approximately 73,000 net acres in the play.

Recent Eagle Ford Deal Closings

Recently, several other notable deals have closed as early Eagle Ford players cashed out on their investments in South Texas. Encana closed its acquisition of ~45,000 net Eagle Ford acres from Freeport McMoran on June 20, 2014 for $3.1 billion. Sanchez Energy also closed its $639 million deal with Shell for 106,000 net Eagle Ford acres on June 30th. Earlier this year, Devon Energy closed on its $6 billion Eagle Ford acreage acquisition with Geo Southern.

Read more: Eagle Ford Deal Closings

Houston-based Marathon Oil Corporation announced in June of 2014 that it is selling its Norway business for $2.7 billion to re-focus capital investments in the Eagle Ford Shale and other U.S. domestic assets.

The buyer, Norwegian-based Det Norske Oljeselskap ASA, will take on ~700-million of Marathon's debt from the deal, leaving Marathon with approximately $2.1 billion in proceeds at closing.

According to Marathon CEO Lee M. Tillman, the company is focused on simplifying and concentrating its business, with a primary focus on its U.S. resource plays, including the Eagle Ford. This divestiture is one of several deals Marathon has made in the past few years. Since 2011, the company has divested $6.2 billion in assets.

“Marathon Oil has a deep inventory across three high-quality U.S. resource plays with expanding opportunities to further accelerate activity. Such organic growth will be our first priority for additional capital allocation.”

— Lee M. Tillman

Currently, Marathon has 211,000 net Eagle Ford acres. During the first-quarter of 2014, the company averaged 96,000 net boe/d, which was an increase of 7% over the previous quarter.