Marathon Oil Corp., Houston, has agreed to acquire PayRock Energy Holdings LLC, an Oklahoma City-based portfolio company of EnCap Investments LP, for $888 million. The deal, to be funded with cash-on-hand, is expected to close in the third quarter.
PayRock holds 61,000 net surface acres and 9,000 net boe/d of current production in the oil window of the Anadarko basin STACK play in Oklahoma.
The acreage features 2P resource of 330 million boe with 490 gross company operated locations, and 700 million boe total resource potential from increased well density in Meramec and Woodford.
“We expect the 2016 capital program on the acquired acreage will be covered within our current $1.4-billion budget,” said Lee Tillman, Marathon Oil president and chief executive officer. “As we look into 2017, we would anticipate a minimum four-rig drilling program in our pro forma STACK position, which will achieve leasehold drilling requirements while accelerating delineation work.”