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article imagePermian shale oilfield experiencing billion dollar land grab

By Karen Graham     Mar 21, 2017 in Business
Houston - Marathon Oil is just the latest in a number of companies, big and small, rushing to snatch up huge amounts of land in the Permian Basin, a massive oil field that runs from Texas to New Mexico.
The gigantic Permian Basin oil field, the largest continuous oil and gas deposit ever found in the U.S. - three times larger than North Dakota's Bakken field - is the center of a beehive of wheeling and dealing, as oil companies both large and small seek to stake a claim in the rich shale formation.
The oil is located in four layers of shale and sits under land owned by several energy companies. The deposits can only be recovered using modern methods including fracking and horizontal drilling. And while the huge supply of oil and natural gas leads some people to wonder just how much farther we are willing to go with fracking, it doesn't seem to be on anyone's mind.
Midland Basin Map
Midland Basin Map
US Department of the Interior
Houston-based Marathon Oil said on Tuesday it has snapped up another 21,000 acres of oil-rich land from Black Mountain Oil & Gas and other private sellers for a cool $700 million in cash. Along with a deal made a week or two ago, this latest sale brings Marathon's total acreage to 91,000 net Permian acres after paying $1.1 billion to buy land from a group of privately owned companies.
Oil wells currently on the property Marathon acquired are pumping about 400 barrels equivalent a day, while Marathon estimates there are some 550 million barrels just waiting to be brought up to the surface, a potentially profitable resource. The company also believes the oil is situated on at least six different target areas of oil-soaked rock and 5,000 feet of so-called stacked pay, an area where drillers target oil and gas.
Marathon Oil has also abandoned it's Canadian oilsands operations, according to Energy Voice, including a 20 percent non-operated interest in the Athabasca Oil Sands Project (AOSP) to Royal Dutch Shell and Canadian Natural Resources Limited for $2.5 billion in cash, excluding closing adjustments.
Untitled
Royal Dutch Shell
This is sort of a strange announcement because, on March 10, Shell CEO Ben van Beurden announced Royal Dutch Shell had agreed to sell most of its Canadian oil sands assets valued at $8.5 billion to Canadian Natural Resources, as well as cut its share in the Athabasca Oil Sands Project (AOSP) from 60 percent down to 10 percent, according to Digital Journal.
More about permian basin, shale oilfield, marathon Oil, ditching canada, land grab
 
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