June 20, 2016 / 10:25 AM / 3 years ago

Marathon Oil to buy Oklahoma-based PayRock Energy

(Reuters) - Oil and natgas producer Marathon Oil Corp (MRO.N) said it agreed to buy PayRock Energy Holdings LLC for $888 million from venture capital firm EnCap Investments, boosting its presence in the Oklahoma basin.

Marathon Oil, which held about 265,000 net acres in Oklahoma, said in February it has allocated about 14 percent or $204 million of its 2016 capital spending to the basin.

PayRock, an Oklahoma and Kansas-focused portfolio company of EnCap Investments, has current production of about 9,000 net barrels of oil equivalent per day in the Anadarko Basin STACK play in Oklahoma.

A near 57 percent plunge in oil prices has pushed down the valuation of oil acreages, making acquisitions more attractive.

Marathon had agreed to sell non-core assets for $950 million in April, bringing its total sales through divestitures to about $1.3 billion since last August.

Last week, U.S. shale oil producer Devon Energy Corp (DVN.N) said it would sell its Texas acreage to Pioneer Natural Resources Co (PXD.N) and an undisclosed buyer for $858 million, as the pace of asset sales picks up on recovering oil prices.

Marathon Oil’s shares were up 3.3 percent at $13.58 in premarket trading. Up to Friday’s close, shares of the company had fallen more than 50 percent in the past 12 months.

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