Marathon Oil buys Texas oil fields for $3.5B

By the Associated Press | June 1, 2011 | 8:29 AM EDT

NEW YORK (AP) — Marathon Oil is spending $3.5 billion in cash to snap up oil and natural gas fields in Texas as the energy company tries to boost exploration and production.

Marathon said Wednesday it has reached an agreement with the owner, Hilcorp Resources Holdings, a partnership that includes Kohlberg Kravis Roberts & Co.

Marathon gets about 141,000 net acres within the Eagle Ford shale formation. The region overlaps Atascosa, Karnes, Gonzales and DeWitt counties the southern part of the state. As of May 1 the land was producing 7,000 barrels of oil equivalent per day.

The deal is expected to close on Nov. 1. Combined with other acquisitions, Marathon Oil Corp. says its position in the Eagle Ford should double this year to 285,000 net acres.