uploads/2017/03/MRO-Bolt-On-ProForma-Details-1.jpg

Analyzing Marathon Oil’s Pro Forma Permian Details

By

Updated

Pro forma Permian acreage

On March 9, 2017, Marathon Oil (MRO) acquired ~70,000 Permian net acres from BC Operating. The recent Black Mountain transaction involves ~21,000 Permian acres. On a pro forma basis, Marathon Oil’s Permian acreage will be ~91,000.

Other upstream companies that are also active in the Permian Basin are Devon Energy (DVN), Pioneer Natural Resources (PXD), and Diamondback Energy (FANG). Diamondback Energy has ~182,000 Permian acres.

Article continues below advertisement

Pro forma risked resource

Recently, Marathon Oil acquired risked resource of 350 MMboe (million barrels of oil equivalent) from BC Operating, while the Black Mountain transaction involves risked resource of 230 MMboe. On a pro forma basis, Marathon Oil’s risked resource will grow by 580 MMboe.

Resource potential upside estimates

According to Marathon Oil’s estimates, its newly acquired Permian acreage from BC Operating and Black Mountain has a total resource potential upside up to ~1,450 MMboe from down spacing and secondary targets.

Advertisement

More From Market Realist