UK RockRose Doubles Output with Marathon Deal

Independent producer RockRose is to buy all of US Marathon Oil's UK assets in a reverse takeover for about $140mn subject to customary adjustments, it said February 25. RockRose expects to pay for it from its existing resources and facilities.

Marathon holds 37%-40% operated interests in fields in the late-life Greater Brae Area, including a share of the St Fergus gas terminal and other revenue-generating assets; 28% of the BP-operated Foinaven Field unit; and a 47% interest in Foinaven East. The deal is backdated to January 1, 2019 and Marathon's onshore and offshore staff will transfer to RockRose on completion.

The deal is expected to add some 35mn barrels of oil equivalent (boe) of proven plus probable reserves  or 21mn boe of proven reserves. RockRose said: "This gives the company a net 2P position on completion in excess of 70mn and 2P+2C of 86mn boe." With output from the assets expected at 13,000 boe/d in 2019, RockRose should produce about 24,000 boe/d this year in total. 

RockRose executive chairman Andrew Austin said the deal marks "a major step change in the group's reserves and production profile. Given the quality of these assets the board's view is this is a good opportunity to make the transition to the role of operator." Before founding RockRose, Austin was the CEO of Igas from 2007-15.

Offshore lobby group Oil & Gas UK said the deal was "a further signal of confidence in the industry – new entrants bring fresh ambition for investment, reinvigorating activity in existing fields and pursuing new opportunities. The multi-million pound transaction is a fitting illustration of how the hard work to improve the attractiveness of the UK Continental Shelf is enabling a diverse range of investors to play into the basin.

“While we cannot comment on the commercial decisions of our members, we commend the contribution Marathon Oil has made to the success story of the UK North Sea. The sale, and indeed purchase of assets, is a natural part of the commercial life of the UKCS and presents new opportunities to maximise recovery," said upstream policy director Mike Tholen.