Karl Johnny Hersvik, Chief Executive Officer of Det norske

Marathon Oil Corporation has entered into a definitive agreement with Det norske oljeselskap ASA under which Det norske will purchase Marathon Oil's wholly owned subsidiary, Marathon Oil Norge AS, for a total transaction value of $2.7 billion.

After adjustment for debt, net working capital and interest on the net purchase price, Marathon Oil expects net proceeds of approximately $2.1 billion at closing. The effective date of the transaction is Jan. 1, 2014.

"The sale of our Norway assets advances one of our key 2014 priorities and further demonstrates our commitment to rigorous portfolio management to simplify and concentrate our business," said Lee M. Tillman, Marathon Oil's president and CEO. "Since becoming an independent E&P company in 2011, Marathon Oil has executed $6.2 billion of strategic divestitures repositioning the portfolio for future growth and profitability. The disciplined allocation of capital to opportunities that can deliver long-term growth at higher returns and improved margins is a strategic imperative.

 Karl Johnny Hersvik, Chief Executive Officer of Det norske.“Marathon Norway is an excellent fit for Det norske, given the operational expertise, access to cash flow and the production profile it brings. The acquisition is important when it comes to meeting our funding requirements for Ivar Aasen and Johan Sverdrup, and to reducing Det norske’s overall risk profile”.

"With respect to our plans for the re-deployment of proceeds, we remain resolute in our commitment to capital discipline," Tillman emphasized. "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, with the balance available for share repurchases under our remaining $1.5 billion board authorization and general corporate purposes.

"I'd also like to recognize the professionalism and dedication of our Norway employees for their significant contributions over the years in building a world-class operation on the Norwegian Continental Shelf. Det norske recognizes the value of not only the assets, but also the competencies and capabilities of the people who have driven Marathon Oil's success in Norway," Tillman said.

The sale includes the Marathon Oil-operated Alvheim floating production, storage and offloading (FPSO) vessel, 10 Company-operated licenses and a number of non-operated licenses on the Norwegian Continental Shelf in the North Sea. Full-year 2013 net production in Norway averaged approximately 80,000 barrels of oil equivalent (BOE) per day.

Tags: Marathon Oil Corporation