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Marathon Oil divests Libya assets to Total for $450M

Marathon Oil Corp. completed a $450 million sale of its subsidiary, Marathon Oil Libya Ltd., to Total SA subsidiary Elf Aquitaine SAS, marking the Texas oil and gas producer's exit from Libya.

Marathon Oil Libya holds a 16.33% nonoperated interest in the Waha Concessions, an oil field in the Sirte Basin of Libya, according to a March 2 news release from Marathon Oil. The sale is part of Marathon Oil's efforts to simplify and streamline its portfolio, focusing on "high margin, high return" U.S. resource plays, according to President and CEO Lee Tillman.

The assets have proved reserves of 199 million barrels of oil equivalent as of the end of 2017, according to Marathon Oil. Through the deal, Total acquired access to about 500 MMboe, along with about 50,000 boe/d of immediate production and exploration potential of about 53,000 square kilometers, according to a separate news release from Total. Current production at the Waha Concessions is at around 300,000 boe/d, which is expected to ramp up to over 400,000 boe/d by the end of the decade due to increased development drilling.

The deal consideration represents nine times Marathon Oil's estimated free cash flow from Libya for 2018 at strip pricing. Waha Concessions is now jointly owned by Libya's national oil company at 59.18%, Total and ConocoPhillips at 16.33% each and Hess Corp. at 8.16%. It is operated by Waha Oil Co., which is 100% owned by Libya's national oil company.

The deal closed on March 1 and has an effective date of Jan. 1.