Marathon Oil: U.S. Trade Regulators Reviewing Alaska Deal With Hilcorp
07/31/2012| 09:19pm US/Eastern
(Adds background in paragraphs five through nine and notes efforts to reach FTC and Hilcorp in paragraph three.)
By Angel Gonzalez and Ryan Dezember
Marathon Oil Corp. (>> Marathon Oil Corporation) said Tuesday that the U.S. Federal Trade Commission is reviewing its deal to sell Alaska oil and gas assets to Hilcorp Energy Corp.
A company spokeswoman said Marathon has received a "civil investigative demand and subpoena" from the FTC, and that it has been working with the agency in the matter. "We remain confident that we will close the transaction, subject to completion of the necessary Government and regulatory approvals, during the fall of this year."
An FTC spokesman couldn't be reached for comment. Nor could representatives of Hilcorp, which is based in Houston.
Marathon announced the deal in April, and said then it expected the deal to close by the fall.
The sale includes 17 million barrels of oil equivalent of net proved reserves across 10 fields in Alaska's Cook Inlet, as well as natural gas storage and stakes in natural gas pipelines.
In January, Hilcorp closed a deal with Chevron Corp. (>> Chevron Corporation) to buy its oil-and-gas-producing fields around Alaska's Cook Inlet. Those assets were producing 3,900 barrels of oil and 85 million cubic feet of natural gas daily when the deal closed.
Financial terms of both transaction have been withheld by the companies.
Alaska's natural gas market is disconnected from that of the lower 48 states, which have seen prices for the fuel fall as producers unleashed new supplies from shale formations.
Alaskan prices, meanwhile, track closer to global prices, which are much higher than those in the lower 48 states.
The natural gas that provides fuel for much of Alaska's population comes from the Cook Inlet on the state's southern coast.
Drilling declined in the inlet in recent decades as energy producers turned their attention to Alaska's prolific North Slope oil fields.
Much of the gas mined there, however, is reinjected into the ground because there is no means to transport it to the state's population centers to the south.
In the last year, however, producers including Hilcorp, Apache Corp. (>> Apache Corporation) and Buccaneer Energy Ltd. (>> Buccaneer Energy Limited.) have made new investments in Cook Inlet.
Write to Angel Gonzalez at firstname.lastname@example.org
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