TX-based upstream energy firm Marathon Oil Corp. (MRO - Free Report) is all set to acquire 21,000 net acres from Black Mountain Oil & Gas and other private sellers in the lucrative Permian Basin. The deal is valued at $700 million and is expected to close in the second quarter of 2017.
This is the company’s second deal in this region in less than two weeks. Earlier, this month, the company had divested the Canadian oil assets and bought 70,000 net acres in the Permian Basin for $1.1 billion. The current deal will allow Marathon Oil to expand its footprint in the oil-rich shale play to more than 90,000 net acres. The company anticipates a production rate of 400 barrels of oil equivalent per day. The deal will likely help the company to generate substantial cash flows.
Energy firms like Parsley Energy, Inc. (PE - Free Report) , Exxon Mobil Corporation (XOM - Free Report) and Chevron Corporation (CVX - Free Report) have been buying land on the booming Permian Basin lately at eye-popping prices. This is due to the region’s extensive pipeline network and abundant labor and supplies which will enable the companies to gain greater margins at the current crude prices.
Headquartered in Houston, Marathon Oil is a leading oil and natural gas exploration and production company. The company’s business is organized into three segments – North America Exploration and Production, International Exploration and Production and Oil Sands Mining.
The company has outperformed the Zacks categorized US Oil & Gas Exploration and Production industry over the last six months. During the aforesaid period, shares of Marathon Oil rallied almost 4% while the broader industry gained just 1%.
The company currently carries a Zacks Rank 3 (Hold). You can see the complete list of today’s Zacks #1(Strong Buy) Rank stocks here.
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