Marathon Oil Pays $888 Million to Acquire Payrock Energy

Marathon Oil announced they will pay $888MM to acquire Payrock Energy's position in the STACK, covering roughly 61,000 net acres and current net production of 9,000 barrels of oil equivalent per day (Boe/d).

Marathon Oil's Investor Relations Webcast Highlights:

  • The deal implies $11,800 per net undeveloped acre after backing out PDP production value.

  • Initial production rates on a few of their 1-mile lateral wells exceeded 1,300 Boe/d.

  • 330 MMBOE 2P Resource with 490 gross operated locations ($2.20 / Boe implied value)

  • 6 well Meramec density per section assumed in their valuation

  • 940 MBoe EUR per well type curve

  • 790 Boe/d average IP30

Marathon's shares surged since the announcement was made.

Payrock Energy is a private oil and gas portfolio company of EnCap Investments and was advised by Jefferies, Inc. on the transaction.