Page 7 - NorthAmOil Week 01 2023

NorthAmOil INVESTMENT NorthAmOil

Hilcorp nets one federal, six state

gas tracts in Cook Inlet sale

ALASKA HILCORP Alaska, a unit of privately owned gas production in state waters.
Hilcorp Energy, has won a federal exploration Economist Roger Marks told Alaska public
lease and six state leases in Cook Inlet, an area of radio that he was not surprised by the tepid
natural gas production for the domestic Alaska interest. “This was the market speaking, and
market. the market is pretty knowledgeable. And I
The US Bureau of Ocean Energy Manage- think it just indicates that the federal outer
ment (BOEM) received only one bid in its auc- continental shelf is just a poor place to think
tion, from Hilcorp for $63,983 for Lease Sale about developing oil and gas because of the
258’s Block 6255. The 2,304-acre (9 square km) geology.”
tract does not border with the company’s existing However, on the same day, Hilcorp won six
14 leases. exploration tracts in state waters in the inlet. The
In the December 30 auction, the BOEM Houston-based company was again the only bid-
offered 193 blocks, spanning 958,202 acres der in the auction, held by the Alaska Depart-
(3,878 square km). The auction – mandated by ment of Natural Resources (DNR).
US President Joe Biden’s Inflation Reduction Act The six winning bids drew in more than
– was the first federal lease sale to be held in the $359,000 for Alaska. In May 2022, Hilcorp won
area since 2017. two tracts for $100,000.
The auction was previously set to be held in In May, the last lease state sale in the state
2022, but had been cancelled in May because of waters of Cook Inlet drew only two bids total-
a lack of interest. Environmental groups recently ling more than $100,000 from Furie Operating
launched a lawsuit, citing risks to endangered Alaska.
species such as whales and potential impacts on Hilcorp provides south and central Alaska
the climate. with most of its supply of gas, which is used for
No oil or gas production has yet taken place home heating and to generate electricity. Sup-
in federal waters in Cook Inlet, though there is plies have been dwindling, however.™

Marathon closes $3bn Eagle Ford purchase

TEXAS MARATHON Oil has closed its acquisition “This acquisition in the core of the Eagle Ford
of Eagle Ford shale acreage for $3bn in cash satisfies every element of our exacting acquisi-
from Ensign Natural Resources. The deal was tion criteria, uniquely striking the right balance
announced in early November. between immediate cash flow accretion and
The assets nearly double Marathon’s Eagle future development opportunity,” said Mara-
Ford position to 290,000 net acres (1,174 square thon’s chairman, president and CEO, Lee Till-
km). They are located adjacent to Marathon’s man, when the acquisition was first announced.
existing Eagle Ford wells. “The transaction … offers compelling indus-
The acreage was expected to produce 67,000 trial logic by nearly doubling our position in a
barrels of oil equivalent per day (boepd) in the basin where we have a tremendous track record
fourth quarter of 2022. of execution excellence,” he said.
The purchase consisted of more than 600 “Over the past four years, Ensign has become
undrilled locations, representing an inventory one of the largest producers in the Eagle Ford
life of greater than 15 years, and 700 existing Basin, operating more high-quality drilling
wells. Most of the existing wells were drilled inventory than nearly all other private operations
before 2015 and are thought to offer redevelop- in the basin, with strong drilling results,” said
ment potential. Ensign’s president and CEO, Brett Pennington.
The acreage is located primarily in the pro- The inventory purchased immediately com-
lific condensate and wet gas phase windows of petes for capital in Marathon’s portfolio, the
the Eagle Ford. company said. But the immediate double-digit
Marathon said the purchase of acreage accretion to key financial metrics and share-
adjacent to its existing assets would contrib- holder distributions will be consistent with Mar-
ute to optimised supply chain accessibility and athon’s return of capital plans and is expected to
cost control. This comes as the service market raise its base dividend by 11% after the transac-
remains tight. tion closes.™

Week 01 05•January•2023 www. NEWSBASE .com P7