Marathon Oil Corporation announced today the signing of a definitive agreement to acquire approximately 21,000 net surface acres largely in the Permian's Northern Delaware basin of New Mexico from Black Mountain Oil & Gas and other private sellers for $700 million in cash, excluding closing adjustments.

"Today's 21,000 acre bolt-on in the Northern Delaware is an excellent fit with the basin entry acquisition we announced earlier this month. The combined deals provide us more than 90,000 acres in the Permian, over 70,000 of which is concentrated in the Northern Delaware," Marathon Oil President and CEO Lee Tillman said. "While we expect to pursue additional trades and grassroots leasing, this bolt-on achieves the scale necessary for efficient long-term development in the basin."

Black Mountain Acreage Highlights:

- Up to 10 target benches within approximately 5,000 feet of stacked pay; base case assumes up to 6 target benches
- Approximately 21,000 net acres with 20,000 net acres in the Northern Delaware basin; primary targets in world-class Wolfcamp and Bone Spring; roughly 400 boed of current production
- Approximately 230 million BOE of risked resource with 440 gross Company operated locations
- Approximately 550 million BOE of total resource potential with 950 total gross Company operated locations
- High quality Northern Delaware inventory produces greater than 90% before-tax IRRs at $55 WTI flat and competes for capital allocation at top of Marathon Oil's portfolio

Combined Permian Acreage Highlights:

- Approximately 91,000 net Permian acres including 71,500 in the Northern Delaware
- Implied total acreage cost of $18,400 per acre, or $23,400 per Northern Delaware acre, adjusting for existing production
- Approximately 580 million BOE of risked resource with 1,070 gross Company operated locations
- Approximately 1.45 billion BOE of total resource potential with 2,650 total gross Company operated locations from both tighter density and secondary targets
- Further upside opportunities from 18,500 net acres in Northwest Shelf
- One operated rig drilling with plans to add two more rigs mid-year

The Black Mountain acquisition is expected to close in second quarter 2017 with an effective date of March 1, 2017.

About Marathon Oil

Marathon Oil Corporation (NYSE: MRO) is an independent global exploration and production company. Based in Houston, Texas, the Company operates in North America, Europe and Africa. Each of the Company’s three reportable operating segments is organized based upon both geographic location and the nature of the products and services it offers.