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Wednesday, March 30, 2011

Marathon to divest non-core Marcellus acreage, where the metrics run at $7,000 per acre































Scotia Waterous (USA) Inc has been retained as exclusive financial advisor by Marathon Oil Corporation for sale of the company’s non-core Marcellus Shale assets in West Virginia and Pennsylvania. The offering has been organized into two packages: the operated leasehold and the non-operated leasehold. The total acreage for the offering is 81,397 gross (51,679 net) acres.


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Investment Highlights:
-- Operated leasehold: This package is comprised of 21,961 gross (net) acres with 100% WI in West Virginia, primarily in Randolph, Preston and Tucker Counties.
-- Non-operated leasehold: This package is comprised of 59,436 gross (29,718 net) acres with 50% WI in West Virginia and Pennsylvania. The acreage is operated by Triana Energy LLC, a Morgan Stanley backed private company, and is located primarily in Fayette County, Pennsylvania and Preston and Randolph Counties, West Virginia.
-- Joint Venture with Triana in which the leasehold is included within an Area of Mutual Interest to be developed by Triana on behalf of both parties. Triana has committed to $45 million drilling carry to earn 50% of AMI leasehold. Minimum drilling commitment in 2011 to drill 4 wells.
-- Encouraging results from Marathon’s drilling activity provides valuable technical data to partnership. Nine wells drilled to date with a focus on data collection and delineation of acreage. Seven operated, frac’d vertical wells with core and fluid efficiency test data. Two OBO horizontal wells providing production data and conventional core data.
-- Additional assets enhance ability of buyer to develop the asset base. Full compliment of regional geological and engineering analysis used to define the play. 100 square miles of 3D seismic currently being acquired over core leasehold. Company owned, buried 3D micro seismic array for stimulation monitoring. Two taps on major interstate pipelines.



Metrics for recent deals in Marcellus



Year
Heading
Deal Value ($MM)
$/Acre
2010
Epsilon Energy and Chesapeake form Marcellus JV
100
17,391
2010
Atlas Energy  and Reliance to form Marcellus JV
1,699
14,158
2010
Anadarko and Mitsui form Marcellus JV
1,400
14,000
2010
Williams acquires Marcellus acreage from Alta Resources
501
11,928
2010
BG and  EXCO form Marcellus JV
950
10,215
2010
EXCO and BG acquire Marcellus assets from Chief Oil & Gas
459.4
9,188
2010
Rex Energy and Sumitomo form Marcellus JV
140.4
8,595
2010
Shell acquires Marcellus acreage from East Resources
4,700
7,230
2010
Reliance enters into Marcellus JV with Carrizo
392
6,257
2010
EQT Corp acquires additional Marcellus acreage
280
4,827
2010
Trans Energy and Republic Energy form Marcellus JV
18
4,736
2010
Magnum Hunter acquires additional Marcellus assets
39.75
4,594
2010
Atlas Energy and Reliance jointly acquire Marcellus assets
191.9
4,531
2010
Antero Resources acquires Bluestone Energy Partners
180
4,500
2010
Statoil acquires Chesapeake’s additional Marcellus acreage
253
4,325
2010
Gastar and Atinum Partners form Marcellus JV
70
4,093
2010
Williams acquires additional acreage in Marcellus Shale
31
3,875
2010
EXCO Resources acquires additional Marcellus properties
95
3,392



Source: Derrick E&P Transactions Database

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