Murphy Oil Corporation has signed a deal to sell its assets in Malaysia, becoming the latest U.S. company to exit projects abroad as it focuses on high-margin opportunities in U.S. shale.
Murphy Oil will exit Malaysia after 20 years after it signed a deal with a subsidiary of PTT Exploration and Production Public Company Limited to sell its two primary Malaysian subsidiaries for US$2.127 billion in cash, payable upon closing and subject to customary closing adjustments, the U.S. firm said on Thursday.
Murphy Oil will use the proceeds to return cash to shareholders through share buybacks and to cut debt, while it will be focusing primarily on the Eagle Ford shale play and on its operations in the U.S. Gulf of Mexico.
A total of US$750 million of the remaining proceeds will be “earmarked for U.S. oil-weighted opportunities through potential acquisitions and/or the funding of both deep water projects and U.S. onshore opportunities,” the company said.
“We will continue with our plans of investing in our high margin, oil-weighted Western Hemisphere opportunities, especially the Eagle Ford Shale and the Gulf of Mexico while maintaining our focused low-cost exploration program,” said Roger W. Jenkins, President and CEO.
Last month, Marathon Oil said that it would be exiting the UK North Sea as it continues to focus on high-return U.S. shale oil operations. Houston-based Marathon Oil has signed an agreement with independent UK company RockRose Energy to sell its UK businesses, which held interests in several fields in the UK part of the North Sea.
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“Today’s announcement to divest our U.K. business represents our continued commitment to portfolio management and further concentrates our portfolio on high margin, high return U.S. resource plays,” Marathon Oil chairman, president, and CEO Lee Tillman said in a statement in February.
In March last year, Marathon Oil sold its 16.33 percent non-operated interest in the Waha concessions in Libya to France’s Total for US$450 million, exiting Libya.
Last month, Marathon Oil said that it would be spending US$2.4 billion in 2019, with more than 95 percent of that capital budget being allocated to its four key U.S. resource plays—the Eagle Ford, the Bakken, STACK/SCOOP in Oklahoma, and Northern Delaware in the Permian.