Marathon oil signs agreement for divestiture of UK business

HOUSTON -- Marathon Oil Corporation has announced the company has entered into a share purchase agreement through its subsidiaries for the sale of its UK businesses Marathon Oil U.K. LLC (MOUK) and Marathon Oil West of Shetland Limited (MOWOS). The transaction represents a complete country exit for Marathon Oil.

MOUK holds a 37% to 40% operated interest in fields in the Greater Brae Area, and MOWOS holds a 28% interest in the outside-operated Foinaven Field unit and 47% in Foinaven East. The buyer, RockRose Energy PLC, will assume all obligations associated with MOUK and MOWOS operations in the U.K, including decommissioning liability.

Subject to customary adjustments, the closing consideration payable to Marathon Oil will be approximately $140 million, which reflects the assumption by the buyer of MOUK and MOWOS working capital and cash equivalent balances, which were approximately $350 million on Dec 31, 2018.

"Today's announcement to divest our U.K. business represents our continued commitment to portfolio management and further concentrates our portfolio on high margin, high return U.S. resource plays," said Lee Tillman, Marathon Oil chairman, president and CEO. "I'd like to recognize the significant contributions of our U.K. employees – both current and past – who built and have operated the Brae Field for more than 30 years."

Though there remain certain contractual requirements that must be satisfied, the transaction is expected to close in the second half of 2019, with an effective date of Jan. 1, 2019. At year-end 2018, the company carried 21.4 MMboe of proved reserves in the U.K., and 2018 production averaged approximately 13,000 boed.