Marathon Oil (MRO) said Monday it agreed to sell its Norwegian assets to Det Norske Oljeselskap in a $2.7 billion deal, as the energy firm continues to strengthen its focus on U.S. production.
Det Norske, a Norway-based exploration and production company, will pay about $2.1 billion in cash. Marathon expects net proceeds to match that amount, adjusting for debt, net working capital and interest.
The transaction is slated to close in the fourth quarter. Scotia Waterous served as Marathon’s financial adviser. J.P. Morgan advised Det Norske.
“The sale of our Norway assets advances one of our key 2014 priorities and further demonstrates our commitment to rigorous portfolio management to simplify and concentrate our business,” Marathon chief executive Lee M. Tillman said in a statement.
Houston-based Marathon has shed more than $6 billion in assets since 2011, seeking to concentrate on more profitable areas.
On Monday, the company announced it stopped exploring a sale of its U.K. North Sea business. Tillman reiterated Marathon’s plans to sell the unit only if the oil producer “received an offer that appropriately valued these assets.”
“Accordingly, we will continue to operate this business as we always have -- with a focus on our company’s long-held values and commitment to safe and responsible operations, and in a manner that maximizes shareholder value,” he added.
Marathon expects to use cash from the Norway sale to promote organic growth and fund share buybacks.
In December, Marathon detailed plans for a $2.5 billion buyback program. Marathon also said it would hike capital spending to increase output.
Marathon Petroleum (MPC), which was spun off by Marathon Oil in June 2011, recently agreed to buy Hess’ (HES) gas stations and convenience stores for $2.6 billion.
Shares ticked seven cents higher to $36.73 in pre-market trading.