Marathon Oil Corp., an Alaska operator for more than 55 years, late Monday agreed to sell nearly all of its natural gas properties in the state for an undisclosed sum to a unit of privately held heavyweight Hilcorp Energy Co.
The sale to Hilcorp Alaska LLC includes an estimated 17 million boe net of proved reserves in 10 fields in which Marathon holds interests in the Cook Inlet. Gas operations include the McArthur River, Ninilchik, Cannery Loop and Kenai Gas units, as well as Beaver Creek, which is an oil and gas development within the Kenai National Wildlife Refuge. The sales package also includes natural gas storage and gas pipeline transmission systems.
Last year Marathon’s Alaska net production averaged 93 MMcf/d of gas and 112 b/d of oil. The company also had about 12.5 Bcf in storage at the end of 2011.
The transaction, with an effective date of Jan. 1, 2012, is set to be completed this fall. Not to be sold is Marathon’s onshore drilling rig, which is being marketed separately.
Hilcorp’s Alaska operations are run by former Marathon manager John Barnes, who joined the company last October after it purchased Chevron Corp.’s Cook Inlet assets (see Daily GPI, July 21, 2011). The amount of the Chevron purchase also was not disclosed.
When the Chevron transaction closed in early January, Hilcorp acquired 700 employees, as well as Union Oil contracts and interest in the Swanson River, Granite Point, Middle Ground shoals, Trading Bay and McArthur fields; interests in 10 offshore platforms; stakes in 10 onshore gas fields including the Ninilchik and the Beluga River units; and two gas storage facilities.
Houston-based Hilcorp was listed last year as the third largest privately held gas explorer in the United States by researcher IHS Herold Inc. Hilcorp Resources Holdings LP, a partnership formed in 2010 by the corporation and equity investor Kohlberg Kravis Roberts & Co. LLP, in 2011 sold 141,000 net acres in the Eagle Ford Shale to Marathon for $3.5 billion (see Daily GPI, June 2, 2011; June 15, 2010).
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