Det Norske to Buy Marathon’s assets in Norway

Recent market consolidations as seen in the United Kingdom are also set to happen in Norway, with Det norske oljeselskap ASA increasing its clout in the Scandinavian country by buying assets from Houston-based Marathon Oil. 

The Trondheim-based company, which produced first oil as operator in May 2013, entered into an agreement to acquire Marathon Oil Norge for a cash consideration of USD 2.1 billion (NOK 12.6 billion).

“Marathon Norway is an excellent fit for Det norske, given the operational expertise, access to cash flow and the production profile it brings. The acquisition is important when it comes to meeting our funding requirements for Ivar Aasen and Johan Sverdrup, and to reducing Det norske’s overall risk profile,” Karl Johnny Hersvik, Chief Executive Officer of Det norske, commented in a note released on Monday.

Marathon’s decision is part of its strategy to increase capital spending, while selling its North Sea operations to focus on North American fields. 

The deal is worth USD2.7 billion, with USD 2.1 billion net proceeds adding to adjustments for debt, net working capital and interest.