Marathon Oil sells stake in Colorado oil shale project for $270 million

Marathon Oil Corp. has agreed to sell a 30 percent stake in a U.S.  oil shale project to a subsidiary of Japanese trading House Marubeni Corp., the Houston oil and gas company said today.

Under the deal, Marubeni will gain a working interest in Marathon’s roughly 180,000 acres in the Niobrara shale play, located in the DJ Basin of southeast Wyoming and northern Colorado. The deal, which works out to $5,000 per acre, is expected to close by the end of April, Marathon said.

“Marathon is pleased to partner with Marubeni as we prepare to explore and evaluate the full potential of this emerging, liquids-rich resource play,” Dave Roberts, Marathon’s executive vice president of upstream oil and gas exploration and production, said in a statement.  

U.S. oil production rose in 2010 for the second year in a row, following years of declines, due in part to rising output from emerging onshore oil fields like the Niobrara and North Dakota’s Bakken shale play.

The fields, once thought too expensive and difficult to tap, have been put in play with the help of advanced drilling and extraction techniques perfected in prolific natural gas shale plays like North Texas’ Barnett Shale. Higher oil prices in recent years have also provided incentive to explore.

Production gains from those fields are expected to help offset declines in the Gulf of Mexico in coming years after a post-spill ban on deep water drilling and continued permitting delays cut into offshore output.

Marathon said it is now collecting seismic data from the DJ Basin and has plans to participate in eight to 12 exploratory wells there this year, including those it will operate through the Marubeni partnership.